I remember during the 1990's when there was a tremendous shift in the way the business of IT occurred. Offices such as CIO use to report up to the CFO, because the primary function was the management of large accounting systems, with ERP or MRP packages (mostly green screen) attached to them. Then right around the time that dial up internet was becoming more readily available, I remember seeing the title of CIO transform into a CTO (Chief Technology Officer). CTO's would be reporting directly to CEO's instead of the CFO as had been done the previous 50 years. Clearly when structure is interrupted, there's also a shift in culture - and we certainly saw these changes in corporate culture happening in Corporate America. The driver was simple - information technology had gone from being viewed mostly as a necessary evil to a competitive advantage. The ability to harness the power of technology by integrating it into your day to day business processes was the constant task at hand and remains so to this day. One of the key things that I remember more than anything, is the phrase of a "Digital Roadmap", also referred to as an "IT Roadmap" and "e-Business Roadmap". Essentially every company needed to have an IT roadmap that would detail their strategic plan the next ten years. Of course this would include topics such as integration, automation, real-time fill-in-the-blank and it would also incorporate continuity and security. This became a strategic tool for all businesses... and rightfully so, in my humble opinion.
At North American Utility Partners (NAUP) we've applied this same concept to the procurement and planning of energy concepts. As it pertains to electricity, natural gas, fuels procurement, budget certainty, risk mitigation and as it applies to your company's sustainability goals - we've created the Energy Roadmap. The idea and concept first occurred to me a few years ago as I was interacting with the Mayor's office and with a School Board, both of a very well known, highly publicized American City. The region had just experienced the Polar Vortex and winter storms, which created a power loss that lasted an insurmountable amount of time (yes I am being a bit cryptic to protect the parties). The representative for the Mayor's office expressed to me how livid he was at the local utility. He was so livid that he wanted me to explore all possible options at being able to have certain buildings and service locations be able to function completely off of the grid whenever warranted. The discussion with the School Board was along the same lines.
As my mind began to go down this path, it became clear to me that businesses and/or municipalities in most cases would not have the resources to be able to implement a mass sweeping change that would or could accommodate this. However, it became very clear to me that for many businesses it was definitely appropriate that they should have an "Energy Roadmap"; for some this would be a 5 year plan and for others it would be a 10 year plan. In all cases, the goals should be about the same, but at varying degrees of course. Clearly procurement planning and strategy is one tenet, another is risk mitigation, a third is to incorporate respective sustainability goals (conservation, onsite generation) and the fourth tenet should the implementation of decentralized grid technologies. I would argue that the minimum annual energy spend should be at least $500,000. This may be stretching it, but in my humble opinion, it's at this level wherein you can't afford to just be a "rate payer" any more.
Over the past 10 years, we have experienced record volatility in the wholesale energy markets. Many experts predict, that we will continue to experience this type of volatility over the next 20 years. Businesses of all types and sizes will need budget certainty and reliability regarding their power and natural gas needs. If you're a business owner or executive with P&L responsibility over power and natural gas bills, then you owe it to yourself to have a second set of eyes on everything. Yes, I am biased, but you should consider allowing NAUP to develop and execute your energy buying strategy for the next 10 years.
In addition to uncertain economic times and record market volatility, the reality is that the North American energy grid is archaic in many ways - much of it being constructed throughout the 1960's and 1970's - all of these drivers mean only one thing; As a decision maker, you cannot afford to just resort to being a "rate payer" or worse, conducting an RFP process every year. These approaches are outdated and are costing your business much more than you realize. The idea or concept of looking to the utility company or even an energy provider/supplier as a solutions provider for you is by all means an irresponsible one. They are in the business of selling you as many kilowatt-hours of electricity or therms of natural gas possible - if you let them, they will.
In the case of IT the driver for change was that technology had become a potential competitive advantage, instead of a necessary evil. In the case of energy, I think the drivers are a bit different; a) people are tired of being treated like rate-payers instead of customers, b) businesses are becoming socially responsible and some would even argue that this becomes a competitive advantage, c) advances in technology are making more options readily available... and the final driver is more of an opportunistic anecdote on my part; but I think that the fragmented nature of the energy industry supply chain has created a smarter consumer, with a larger appetite for knowledge that they will seek out firms and consultants that can effectively connect all of the dots for them.
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