Energy as a Controllable Cost

Author: Lanie Petersen

A transcript from a recent Focus on Suppliers interview with Greg Pool of Edison Energy.

Why are corporations are adding renewable energy to their energy portfolios?

Greg: It went from companies seeking out renewable energy or sustainability claims to serve some outlier group to being part of the core business.  They’re treating their energy as controllable.  They’re finding that increases in energy can affect their profitability as well as decreases in energy costs.  An increase in energy of 5%, for a retail example that we were working with recently, they would have to increase their sales by 12% to make up that impact on the profitability.  A decrease of 5%, if they were able to achieve that through some mechanism, they could increase their profitability by .35% after taxes.  Now those sound like small numbers to us, but if you’re the CFO they don’t.

What are these projects and commitments doing to the renewable energy market?

Greg:  It’s driving our business of course.  Companies are finding that they want to follow the peer leaders in their group.  They see what companies like VF Wrangler or Proctor and Gamble are doing and they respect these companies as leaders in their industry.  They, they want to follow that trend.  But they’re finding that it’s very complex.  The market is overwhelming, overwhelmed with offers.  How to sort through the best deal, how to set the best goal, how to run the full analytics and get a clear picture of the risk, and then how to move that for the support through the approval process and the contracting within a company.

So, Edison Energy comes in and assists the companies when they’re trying to meet their goals?

Greg: Generally, within a company, we’ll see a driver either by the stakeholders with some internal champion, a lot of times from the sustainability team, sometimes from the energy team. They’ll build the internal consensus or the internal momentum.  But rarely do they get additional resources – headcount, additional training or expertise. That’s where we come in.  We, my team is made up of members from industry, from retail – they’ve been on the other side of the table – project developers, finance folks, data engineers.  We do the heavy lifting for you. Everything from helping you develop a feasible and achievable goal that’s peer-reviewed to selling the idea internally, evaluating the market, running the deep analytics and getting a clear risk picture of how this sets up for your company to the more common things like contracting and the approval process.

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