Project Description

Radiant Energy provides energy solutions to restaurants looking to reduce energy expenses

Energy Management Based On Client’s Overarching Objectives

Radiant Energy led a large dine-in restaurant chain through the process of devising an energy management strategy and restaurant energy solutions aligned with the company’s main goals and objectives. Radiant Energy used this customized strategy to guide energy procurement and energy risk management activities, resulting in restaurant energy solutions of more than $500,000 in savings.

Market Intelligence Influences Results: A centralized, strategic approach to managing energy is critical for companies seeking to mitigate energy volatility and manage price risk. The requirements for such a strategy include a disciplined process, adequate resources and timely market intelligence. In extremely volatile energy markets, an in-depth understanding of pricing options also are crucial for developing the most effective strategy.

SITUATION

A restaurant company operating 240 locations with five different “concepts” in North America, was unsure about its corporate risk tolerance and the relationship to overall corporate goals and objectives. To complicate matters, the company had a large concentration of new concepts and sites coming on within the next few months. The new brands and locations with deregulated power regions resulted in numerous different pricing options for the restaurant company.

Before partnering with Radiant Energy, the restaurant company had entered into a power market agreement that put them at risk in a volatile, interval-settled market. In the stir of weather conditions and market changes, the energy index settled extremely high, making the rising energy costs a critical issue for the Florida-based restaurant group.

LEADERSHIP

Radiant Energy began by leading the large restaurant group through the process of determining its energy goals and objectives and defining the company’s risk tolerance level. Radiant also helped the chain articulate the corporate goal as it applied to specific energy markets: Limit the restaurants’ exposure to price volatility, yet maintain a competitive price advantage in the marketplace.

Based on the defined risk profile, it became apparent that the restaurant chain’s contracts assumed more risk than the company believed appropriate. Radiant negotiated a more conservative energy pricing approach for the remainder of the term of the original contract while preparing for a more energy purchase after the original expired.

RESULTS

The recommended strategy allowed the restaurant company to lower energy costs throughout each location by strategically procuring energy rates and a risk profile that aligned with the company’s goals. This customized restaurant energy solution played a critical role in the overall corporate strategy.

Through its focus on the restaurant company’s objectives, Radiant was able to secure energy contracts that resulted in both a significant cost reduction and an effective risk management strategy. As a result of these and other efforts, Radiant Energy guided the chain to more than $1.25 million in hard dollar savings in a two-year period.