CCA Helps Multi-Site Restaurant Chain Save $700,000 on Utilities
Client
Restaurant operator with 40 sit-down stores and stadium concession stands.
Challenge
Keeping the sandwiches hot and the beers cold takes energy. With increasing electricity
and natural gas costs, our client sought to validate the rates their existing energy broker had procured.
After assessing their accounts and contracts, Cost Control Associates’ (CCA) Energy Procurement Team found significant opportunities for better pricing. The project lead, Joe Scicutella, worked directly with the CFO, identifying several major gaps in their energy portfolio and three primary ways their energy broker was letting them down.
Contracts for many locations expired and converted to month-to-month, leaving them at the mercy of volatile energy marketplace pricing.
Unexpired contracts contained punitive language and contractual pitfalls that allowed incumbent carriers to assess large fees if they didn’t meet certain usage thresholds.
Contracts were to end in January 2023, a historically bad time to negotiate pricing.
In addition, based on our industry benchmarks and understanding of marketplace trends, the client had not achieved best-in-class pricing, leaving room for CCA to negotiate improved rates.
Solution
After identifying several gaps in their buying plan, CCA took over management of their entire portfolio.CCA performed a deeper analysis of their invoices and agreements, connect with stakeholders from accounting and finance, and engaged four suppliers via RFP for both electricity and natural gas pricing. Once CCA received pricing from each supplier, we modeled the financial impact of each supplier’s proposal based on historical volumes and presented our analysis and recommendations to their team.
Result
The client accepted CCA’s recommendation for fixed, all-in pricing with a single supplier for natural gas and multiple suppliers for electricity, with 36-month agreements to lock in best-in-class pricing long-term. CCA Analyst, Joe Scicutella, pitched a strategic plan to delay contract start dates to May 2023 based on the value of futures pricing.
CCA Services
Energy Procurement
Joe Scicutella is an energy procurement analyst for Cost Control Associates. He helps his clients obtain energy supply at the optimal price. He keeps his thumb on the pulse of the energy marketplace by monitoring supply, providing insights, working with suppliers to obtain pricing and negotiate contracts. Joe currently manages more than $2.5 billion in total client annual spend and has saved his clients more than $2.8mm on costs since July 2019. Learn more.