HNG's Energy Experience
Since the business environment is in constant change, a cost management solution routinely needs to be reassessed and altered should the circumstances call for it. Heartland Natural Gas representatives are trained to focus on their customer's business environment in three categories to maintain a successful relationship. It is standard policy to hold these meeting on a semi-annual basis
I. Strategy Development
Heartland Natural Gas sees a four step approach in helping thoughtful educational facility managers address their energy costs. In order:
- Identify the major pieces of hardware that drive natural gas consumption patterns and the variable factors that affect demand (business cycles, weather, current and planned energy measures etc.).
- State the overall goals of managing expense budgets (short term), i.e. budget certainty, price volatility, price to beat.
- State the overall goals of capital projects (long term), i.e. declining energy use/cost per a particular metric like conditioned square footage, cost of goods sold, greening of energy sources, minimizing capital costs in one facility while redesigning another.
- Outline tactics to accomplish the stated strategic goals, and define timelines and measurable benchmarks on at least a yearly basis for both the short and long term goals
II. Customer's Profile
Heartland Natural Gas's methodology to analyzing a natural gas management solution begins with the preferred method of communication which is a face-to-face meeting. The proven value of this method is to gain a deep knowledge of the client's unique energy needs and goals. The process starts by understanding a client's specific usage patterns. Keys to understanding what moves gas consumption is a mix of the following: gas hardware units (HVAC, boilers, ovens, NGV vehicles, co-generation), the facilities relation to temperature changes, business and sales cycles, etc.
This consumption understanding needs to be balanced with the client's specific risk appetite to manage and mitigate any potential situations. Elements crucial to diagnosing a client's risk appetite include but are not limited to the following: budgets, cash flow, contracts (price & term), raw material procurement strategies, market positioning, and public relations. As one can surmise, this is an extremely dynamic and volatile balance that needs to be maintained through high level of communication between Heartland Natural Gas and the client.
III. Market Education
Understanding energy market fundamentals also play a large part in determining an energy cost management strategy. Energy market costs fluctuate based upon numerous factors, including but not limited to, weather, economic conditions, environmental legislation, and the world's equity markets. With year over year price changes of 20% or more, coupled with changes within the organization's energy consumption makes performing within the confines of budget nearly impossible. A long-term strategy that identifies all variables, along with a price based execution strategy, can provide the organization with the ability to set and beat their budget year after year.