Project Description

Radiant Energy provides energy expertise to the industrial sector

RADIANT ENERGY CONVERTS CONSEQUENCE INTO PAYOUT FOR ASPHALT PLANT

When one of the largest asphalt and concrete manufacturers in North America decided to shut down one of its facilities, it appeared as though the company would have to pay the utility $7,600 for outstanding energy contracts. Yet, when Radiant Energy provided energy expertise and researched the case, it turned out that the utility owed the asphalt group, not the other way around.

Market Volatility Involves Dynamic Energy Strategy: In today’s global economy, production requirements can shift quickly, causing some companies to close sites unexpectedly. When this occurs, companies often find that they are obligated to volumes of contracted, and unused, energy. Understanding the site’s procuring history in relation to the changing market enables companies to avoid unnecessary losses during liquidation.

SITUATION

One of the largest asphalt and concrete manufacturers in North America needed to shut down one of its sites in Florida. Since the site would close in the middle of the calendar year, the company’s strategic energy partner, Radiant Energy exercised its energy expertise, and requested a liquidation quote from the utility for the balance of the site’s contracted volumes. The utility indicated that the producer would owe approximately $7,600 at the time of closing. Radiant believed the amount to be excessive given the current market conditions.

LEADERSHIP

Radiant’s expert team researched the manufacturer’s buying history and confirmed that the site had contracted for the energy at a relatively low market price. Since the site closing would occur at a time when energy pricing was rising, the product would actually be more valuable at the time of liquidation than when it was originally purchased. Under these conditions, Radiant concluded that the manufacturer should receive a credit from the utility rather than pay for the “excess” contracted volume.

RESULTS

At Radiant’s request, the utility verified the basis price and reconsidered its position on the liquidation penalty. The utility agreed that the manufacturer should receive a $7,600 payout as opposed to paying a liquidation penalty. Due to Radiant’s market intelligence and diligence, the credit was in the manufacturer’s favor and it helped pay relocation fees for its employees. Win/Win/Win.