BAI filed testimony on behalf of the Association of Businesses Advocating Tariff Equity (ABATE) in a Michigan case concerning gas delivery rates. The Michigan Public Service Commission issued a precedent-setting order eliminating all interclass subsidies for the gas delivery rates of Consumers Energy Company. Transportation rates for large users decreased by 25%. This is even more remarkable because Consumers was awarded an 11.5% overall rate increase. The Commission's order firmly established that cost-based price signals should enhance today's competitive gas energy markets.

BAI participated in a fuel adjustment clause reconciliation proceeding and subsequent settlement negotiations involving Central Illinois Light Company (CILCO). BAI argued that CILCO acted imprudently by choosing to enter into market-based purchased power contracts to replace a below-market contract with another utility. The Illinois Commerce Commission (ICC) concluded that it had the authority to examine the prudence of CILCO's FERC-approved purchased power contracts that resulted in higher costs to consumers. After a fifteen-month struggle, the ICC approved a settlement that will return $70 million to consumers over five years. The ICC also dismissed CILCO's proposal to roll fuel costs into base rates and eliminate the fuel adjustment clause.

A client came to BAI with an on-site cogeneration proposal from a national developer. The client thought the proposal was attractive, but requested BAI’s input. BAI advised the client to issue a RFP to test the competitiveness of the proposal against other developers. The results: the client chose the original developer, but the original proposal was modified to reduce the client’s cost by approximately $1.9 million per year.

During a routine cost reduction assessment for a client, we analyzed electricity invoices, and concluded that the manufacturing facility was paying a little below average price at the time -- about four cents per kilowatthour. However, as we continued our research including interviews with company personnel, we found that purchased electricity was not the only energy used. The plant generated more than half of its own power, and also purchased process steam from an outside source. The real cost of their energy was more than fourteen cents! The estimated savings are in the millions of dollars.

We worked with a multi-facility company with a large plant in the Southeast and issued and evaluated a formal RFP for the purchase of delivered natural gas. We were able to obtain gas transportation on the LDC and the interstate pipeline at a significant discount from the published tariff rate through capacity release. Our efforts saved the client over $200,000 on the company’s annual gas cost.

A mining company in Arizona asked us to do a cost reduction analysis, and during the review of the twelve months of invoices, we found one error on an invoice that saved the company more than $1 million.

An industrial manufacturing company arranged a third-party procurement and management agreement for electricity and natural gas. Their prices were based on various indexes. The company asked us to review the agreement. We found that the indexes, which applied to all of their plants throughout the U.S., were skewed in favor of the third party. We identified the biases, educated the client, and helped them negotiate contract terms that substantially reduced their energy costs.

We were recently asked by a group of 10 industrial companies to help them negotiate a real time pricing (RTP) contract with the utility. The companies were in the same state and serviced by the same utility. As a result of our negotiations, the group saved $11 million collectively.

For most it isn’t easy to negotiate with a monopoly supplier. For BAI it is routine. Our leverage is our knowledge and understanding of how the utility works.