November 2021 Volume 3

OPERATIONS & MANAGEMENT

4. LNG export volumes (and prices) continue to set new records. 5. Natural gas producers are continuing to hold the reins tight on production. 6. Natural gas is being promoted as the world’s “bridge fuel” of the energy transition. So, What Can You Do About It? Given these market conditions, the real question becomes how best to proceed in this high-priced environment. At Transparent Energy, we’ve helped clients procure energy for their businesses for more than a dozen years in good markets and bad. Given this experience, here’s what we suggest you do: 1. Act now.: When energy gets expensive, it’s human nature to try to ignore the problem. Resist this temptation. Natural gas prices are predicted to continue to rise, so waiting is your worst option. There are two key ways you can act now. First, engage with your energy procurement professional and let them see your existing contract, understand your load, and evaluate your options. Second, given the market forecast, think seriously about transacting now , ensuring you are hedged well into the future. When you work with a professional energy procurement firm, one that is transacting in the market every day on behalf of clients, you gain a buying advantage. The advantage we can share with you right now is that there is still price relief available in the outer years of a long-term contract. You are not going to “save” money over a contract you entered into in 2019 or 2020, because energy commodity costs have skyrocketed, but by “going long” now you can hedge your risk and gain a financial benefit. 2. UnderstandThat Energy Prices Are Volatile. The last couple of years have lulled many businesses into complacency about energy prices, giving them the false impression that energy prices are always low. They aren’t. The fact is energy prices change all the time . By working with a professional energy procurement firm, you will ally yourself with someone familiar with market swings and who can help you time your buys to windows of opportunity in the market. If you are doing this yourself, or working with a broker that doesn’t bring process and technology to their offering, you are at a disadvantage, especially when markets surge as they are doing now. 3. StayProactive. Whilemy first recommendationwas “act now,” that advice is specific to the limited window of opportunity in the market right at this moment. Typically, we counsel clients to engage with us a year or more in advance of their current energy supply contract expiration. Why? Because when you wait until the last minute, you become an “order taker,” a business that just has to take whatever price is available – and that’s rarely good. As I mentioned earlier, when you have an expert on your side watching out for you in the market, they can take advantage of market drops and help you lock in savings

when they are available. If you just go to market every 1, 2, or 3 years when your contract is expiring, you lose that flexibility and savings opportunity. 4. Use an Auction Process to Procure Energy. When energy markets are low, everyone can buy and feel like a winner. When energy markets are high, how you buy energy becomes paramount. Unless your energy team or current broker uses a competitive online auction process, one that doubles supplier participation and drives margins down to the bare minimum, you are leaving money on the table. As an added benefit, this technology supplements the efforts of your internal energy procurement team, giving your specialists the ability to gain price discovery and compress supplier margins across all product types and terms, so you can transact with confidence. Think of the online-auction platform as an extension of your team, one that will help you reap the best of the market every time. The forging industry is poised for steady growth. With the FIA’s new partnership with Transparent Energy, the time is right to explore how strategic energy procurement – combining expert energy advisory and market intelligence with proven, cost-saving technology – can provide a critical advantage to your business today and in the future. ■ Jane Seagraves VP, Association & Partner Development Transparent Energy Phone: 443-614-2846 Email: jseagraves@transparentedge.com

FIA is pleased to announce a new Affinity Partner Program with Transparent Energy. For more details please contact: Keri Kichurchak Membership Programs & Sales Manager Forging Industry Association Phone: 216-781-6260 Email: keri@forging.org

FIA MAGAZINE | NOVEMBER 2021 47