The Challenge

Orange sunset in low clouds over railroadThe railroad retained another firm to create a historical database of energy costs, including usage and cost data. The firm would also capture usage and cost data going forward. It wasn’t long before the railroad realized their contractor had missed a significant number of accounts, and many of the captured accounts contained incomplete or inaccurate data. The resulting reports lacked the meaningful data needed to perform effective rate analyses. To make matters worse, it turned out that the vendor was not proficient in doing that type of work.

The main goal of the railroad’s energy management program was to create an energy database and use it to put a mechanism in place to manage costs, recognize opportunities and react to them. This included procuring electricity supply for their largest facilities in Illinois.

The railroad’s energy team had neither the specialized knowledge nor adequate internal resources to perform a review of past bills for errors and savings. They also didn’t have the skills to analyze rates to ensure all accounts were on the most beneficial rate. Last but not least, they had no direct experience in procuring alternate supplies of electricity.

The Solution

The railroad turned to Cost Control Associates to perform a review of past bills looking for errors and rate opportunities. But first, Cost Control had to work with the prior vendor to identify critical errors and shortcomings in the existing database. Then they developed meaningful analytical reports to assist in the review. To reconstruct missing data, Cost Control Associates obtained billing histories from the utility companies.

Due to the size and scope of the project, Cost Control divided the project by state and, based on expected results, assigned each state to one of three distinct phases. They simultaneously issued a Request for Proposal on electricity supplies for the Illinois locations and negotiated a successful and beneficial contract.

The additional effort made by Cost Control Associates was well worth it. Their work resulted in more than $868,000 in annual cost savings. With all the records in proper order, much of the analysis can now be handled by the railroad’s in-house staff. Cost Control Associates continues to help with procurement services.

“We were impressed by Cost Control Associates’ thoroughness. Their efforts freed me to focus on the other aspects of my job, and their work resulted in more than $868,000 in annual cost savings.”

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