How Utilities are Leveraging Technology to Increase Competition and Transparency in Their Energy Procurement Processes
Amid the evolving energy landscape bringing about new technologies, market mechanisms, and regulations, utilities in North America face increased pressure to transact faster and become more transparent. To do so, more and more utilities are enhancing their decades-old, paper-based RFP processes with software-based energy procurement tools, like Enel X’s Energy Exchange.
Technology-enabled procurement tools drive competition in online environments where large groups of suppliers gather to compete in real time. Suppliers get the visibility they need to refine their bids to win the RFP. Utilities get the hyper-competitive environment they need to secure the most favorable prices for their customers. Utilities get a transparent, fully documented record of their transactions, proving the integrity of their process.
One utility that is leveraging the advantages of technology-enabled procurement is the Upper Peninsula Power Company (UPPCO), a regulated utility that serves electric customers in Michigan. UPPCO first began leveraging Enel X’s Energy Exchange in 2014 to enhance its on-peak energy procurement process. Over the past three years, UPPCO has collaborated with Enel X to develop a sophisticated buying program and expand the use of the Exchange to include a variety of energy products. In recent months, UPPCO has leveraged Enel X’s ability to streamline the approval and enablement of new suppliers seeking to bid on energy contracts, ultimately tripling the number of suppliers competing for UPPCO’s business.
"Our partnership with Enel X has helped us grow our base of enabled suppliers and maximize the competition we receive for our energy contracts," said Aaron Wallin, Manager of Power Supply and Resource Planning at UPPCO. "By running dynamic, live reverse auctions on the Enel X Energy Exchange, we are confident that we are getting the most competitive rates for our energy contracts, enabling us to keep costs as low as possible for our customers."
Regulators and other stakeholders charged with protecting consumer interests embrace the increased liquidity and transparency that Enel X's solution provides.
"Utilities like UPPCO are increasingly aware that traditional paper-based RFP processes impede the ability to transact quickly and efficiently, whereas our software allows utilities to maximize competition while ensuring total transparency before, during, and after an auction," said David Brewster, President of Enel X.
To learn more about how Enel X helps utilities like UPPCO source their wholesale energy transactions, watch this brief video to see the software in action.