Customer Overview
Client: Mid-Sized Manufacturing Facility
Industry: Industrial Manufacturing
Annual Natural Gas Usage: ~50,000 DTH
Service: Structured Natural Gas Procurement Strategy
This engagement involved evaluating and restructuring the natural gas procurement approach for an industrial manufacturing facility in North Carolina. The objective was to transition from full market exposure to a disciplined, risk-managed structure better aligned with operational predictability and financial planning requirements.
The Challenge
A North Carolina manufacturing facility was purchasing natural gas under a fully variable market structure through an independent supplier. While flexible, the arrangement exposed the organization to significant year-to-year cost volatility, particularly during winter pricing spikes in Transco Zone 5.
Annual natural gas expenditures fluctuated materially, creating budget uncertainty and increased financial exposure during peak demand periods.
Leadership sought a procurement structure aligned with operational load characteristics and financial planning objectives.
Assessment
BREA Energy conducted a comprehensive review that included:
- Invoice and contract analysis
- Seasonal load and winter exposure modeling
- Swing tolerance evaluation
- Competitive pricing analysis across multiple independent suppliers
The assessment determined that full market exposure was inconsistent with the facility’s operational predictability and risk tolerance.
Strategy Implemented
BREA Energy structured a multi-year fixed-price agreement with 100% swing flexibility, designed to:
- Stabilize commodity pricing
- Preserve operational flexibility
- Reduce exposure to winter market volatility
- Mitigate risk associated with regional pricing events
The objective was to align procurement structure with operational realities rather than pursue short-term market timing.
Business Impact
In the first year of the agreement, the facility realized nearly $90,000 in cost savings relative to maintaining full market exposure.
In addition to direct cost reduction, the strategy delivered:
Reduced winter volatility risk
Improved annual budget predictability
A defined and repeatable procurement framework
The facility transitioned from reactive market exposure to a structured, risk-managed energy procurement approach.
Key Insight
Procurement structure — not short-term market timing — was the primary driver of improved financial performance and cost stability.
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