A company that processes premium-quality fresh pork was experiencing fast growth, including a major expansion of their processing plant. Since natural gas is a core component in pork processing, GOenergy was hired to help.
There are three elements involved in the purchase of natural gas: delivery, gas and transportation. We offered to address all three issues.
Fast growth in recent years had caused the company’s gas consumption to double. Since they were contracted under the general delivery rate—the same rate paid by consumers—as their gas usage increased, they were paying more than was necessary.
In addition, they were buying all their natural gas in an annual block requiring them to forecast their expected consumption a year in advance. At the time, natural gas prices were falling—another factor contributing to their paying more than they had to.
Lastly, the company was buying directly from the transportation system; in this case, TransCanada Pipeline. They could’ve been getting better prices for natural gas transportation but were unaware of this due to lack of industry knowledge.
The company decided to partner with GOenergy for their natural gas needs. We first recommended they change their approach to natural gas delivery and advised moving to an annual contracted rate that would provide much better pricing.
Next, we helped them purchase approximately 80% of their forecasted usage and then, based on their daily forecasted needs, to buy blocks of gas monthly.
Finally, GOenergy shifted the company from dealing directly with TransCanada to buying from Ontario’s secondary natural gas market instead.
By shifting their method of natural gas delivery from general delivery (or M2) to contract delivery (or M4), the company was able to save $10,000 annually. They were now entitled to better rates because of their size and usage.
GOenergy’s flexible solution allowed them to commit to the annual contract required by the industry but also minimized the price they paid for their gas. By purchasing only the additional gas needed over their annual contract one month at a time, they ensured protection against falling gas prices and saved over $70,000 per year.
By moving to the secondary transportation market in Ontario, the company was able to get a more flexible price on transportation generally lower than the bulk commitment of buying directly from Alberta. As a result, they saved almost $50,000 annually on their TransCanada Pipeline rate.
GOenergy provided the company with the necessary knowledge and expertise to achieve huge savings in their natural gas purchasing.