CLIENT LOGIN
Contact Us

Find Us

5 Headerquarters

4545 Fuller Dr. Suite 412
Irving, TX 75038
Phone: (972) 445-9584
Toll Free: (855) 275-3483
Fax: (855) 329-3493
email5@energyby5.com

5- Northeast

865 State Route 33
Ste 3 PMB 1077
Freehold, NJ 07728
Phone: (732) 774-0005
Fax: (855) 329-3483
email5@energyby5.com

5- Mexico

CP 11000, Miguel Hidalgo
CDMX, Mexico
Phone: +5595287982
mexico@energyby5.com

PROCUREMENT & RISK MANAGEMENT

ELECTRICITY
NATURAL GAS
Product
Structuring
Strategic
Hedging Advice
Renewable
Energy Credits

ELECTRICITY
PROCUREMENT

Our clients are busy and rarely have the time, tools, or expertise to create, execute and manage a forward-looking electricity procurement strategy. Without a strong working knowledge of every facet of the deregulated energy industry, clients are often blind to the inherent risks and opportunities embedded in their procurement process as well.

That’s where 5 comes in. We are uniquely positioned to design and implement effective energy strategies that ultimately become a competitive advantage for our clients. Our comprehensive procurement strategy always starts with data. We take the time to analyze our client’s energy usage patterns, peak demand, coincidental peaks, operations, controls, utility costs, weather sensitivity, and potential product options by gathering the following:

• Monthly usage data and 15-minute usage data when available
• Current contract terms, end dates, and product details
• Utility invoices and rate code details
• Operational schedules
• Building automation control details

In addition to collecting client data, we also leverage our proprietary market analytics platform, Level5, to review prices and energy market trends including:

• Historical and forward market prices
• Regional costs for congestion, capacity, transmission, ancillary services, and more

5’s approach to electricity procurement balances each client’s desire to reduce and control energy costs while also considering their decarbonization goals, resiliency needs, operational constraints, optimization opportunities, and their potential appetite to reduce cost within acceptable risk tolerance. After working with 5, clients begin to see their electricity procurement strategy as an asset worth developing, instead of merely an expense to be minimized. No company is better situated than 5 to help clients manage their exposure to volatile energy prices in an ever-changing market.

procurement-image1
“A swing one way or another could cost you $20,000 or gain you $20,000, we went through that game for many years before we met 5. We have now completed four contracts with 5. Over that time, we are going to save the district over $4.7M through the year 2031.”
- Jeff Bright, CFO, San Angelo ISD
Calendar_Strips_ERCOT_North_All_Hours-2-1

NATURAL GAS
PROCUREMENT

Natural gas purchasing is a major expense for many commercial and industrial clients. The complexity of contracting options and the lack of good resources leave many clients wondering what to do next. It is critical to create a proactive and comprehensive natural gas procurement strategy to successfully reduce and control energy costs over time. It is also important to understand how natural gas purchasing might impact other client needs including resiliency, risk exposure across multiple commodities, and price risk during extreme weather events.

As with all procurement, 5’s proven process for helping clients begins by collecting data about the client and the market. When clients work with 5, they gain valuable access to the information and visualizations needed to understand their options while also working with a team that takes the time to understand the client’s operational and corporate goals. The result is a natural gas procurement strategy that is customized for the client, appropriately balancing risk and opportunity, while providing flexibility when there is a shift in the client’s needs or market dynamics.

Our energy advisors and pricing analysts work together with our clients to determine the best natural gas procurement strategy including:

• Futures market timing, term length, and multi-tranche hedging strategies
• Fixing versus floating locational basis risk
• Monthly versus daily index settlement risks and risk premiums 
• Firm versus interruptible capacity
• Balancing and swing contract provisions
• Best suppliers to include in RFP for specific load types and geographies

procurement-image3
“We get requests from energy service providers all the time, wanting our business, wanting to tell us how they can save us money. 5 is more about who are you as a customer and how can we get to know you.” 
- Brian Webb, Sustainability Director, Houghton College

PRODUCT
STRUCTURING

There is no such thing as a one-size-fits-all energy contract. The goal of any client product development exercise is to optimize the client’s unique usage profile, decarbonization targets, financial goals, and resiliency needs in conjunction with market price and regulatory risk to determine the most favorable strategy. In addition to establishing contract timing and term length, the best procurement strategy also involves a complex review of many variables to determine the optimal product structure.

The robust backgrounds and experiences of the 5 team create a unique opportunity for clients at all levels to receive Fortune 100 product structuring advice. 5 takes the time to understand a client’s load profile and combines the insights from that data with the client’s goals, needs, and risk appetite as determined during the discovery process. Often, clients are not aware of the upside opportunities or inherent risks in the products they select. During major market events, including natural disasters and weather anomalies, clients can find themselves with more exposure to volatile commodities, like natural gas, than they had expected.

Unlike the transactional nature of most deregulated energy salespeople and brokers, 5’s process for product structuring and procurement is more customized and more comprehensive. 5 carefully listens to and works alongside clients to right-size opportunities and thoughtfully create managed products that capitalize on opportunities in the energy market. This strategy may include PPAs, VPPAs, hybrid products with open positions, time-of-use arbitrage, and a wide variety of customized solutions for the client.

Energy by 5- 3-4-25-9
“The Fort Worth Zoo is proud to partner with 5. Their team continues to make meaningful impacts on the zoo’s bottom line through their comprehensive approach to energy management.”
- Megan Deen, FCO, Fort Worth Zoo

Strategic
Hedging Advice

There is a wide array of product options available to clients in deregulated energy markets and while fixed-price products have traditionally been the most popular option, there are also times when clients should consider a more customized approach. Many of these procurement options are considered “managed products” including load-following blocks, fixed quantity block and index products, fixed heat rates, and layered purchases over time to strategically limit portions of the client’s price exposure. Successful execution of a managed product depends on the quality of the hedging advice a client receives.

The analysts at 5 use the company’s internal market intelligence tool, Level5, along with a clear understanding of the client’s operations, goals, and constraints to create a customized hedging strategy. 5 recruits and retains the industry’s smartest (and most helpful) analysts to work alongside clients with managed products, ensuring successful execution throughout the contract term. Furthermore, 5 regularly meets with these clients to provide continued product education, evaluate open market positions considering both market and regulatory conditions, and update energy budgets and financial forecasts when necessary. Energy advising on this level is a game-changer and the analysts at 5 are providing industry-leading advice to clients.

Energy by 5- 3-4-25-59 (1)
“The demands of a fast-growing school district are very real. We will add new elementary schools and a new high school in the coming years, and we need to be prepared from an infrastructure perspective to handle that growth responsibly and cost-effectively. 5 is helping us do just that.”
- Oscar Perez, CFO, Fort Bend ISD

Renewable
Energy Credits

Renewable Energy Credits (RECs) are financial instruments used to offset the indirect greenhouse gas emissions of an organization while funding the development and operation of renewable energy resources. The story of RECs in the US begins in Texas, the first state to implement a Renewable Portfolio Standard (RPS) back in 1999. Texas law required that a certain amount of the electricity consumed within the state come from a renewable energy source at a future date, driving the local utility companies to purchase RECs from renewable power plants to comply. Since then, dozens of US states and many countries around the world have established their own RPS and purchase RECs to comply with those standards.

Soon a voluntary market emerged for purchasing RECs in the context of corporate sustainability. Today, the demand for RECs is as high as the number of companies establishing their own internal targets for renewable energy continues to increase. RECs are a simple and cost-effective way for most companies to meet their sustainability goals. RECs also provide transparency and credibility to a company’s environmental claims as certifying agencies, such as Green-e, track the ownership trail and eventual retirement of each REC.

The US has multiple, independent electricity grids that are interconnected to some degree. This allows RECs to be sourced from one part of the country and applied and claimed against electricity consumed anywhere else in the country. There is also an established, over-the-counter market for RECs where banks, brokers, traders, and end-users such as utilities and competitive suppliers, transact with one another.

The team at 5 works closely with clients to determine the most important factors for any environmental sustainability effort including the geographic location of the facilities, the size of the annual electricity requirements, and the specific sustainability targets established by the client. For most clients, REC purchases are the starting point on their path toward more sustainable operations. RECs have a long track record of decarbonizing electricity generation through a market mechanism for energy buyers to make environmental claims that support renewable power projects.

RECs are also growing and rapidly changing. New attributes are being assigned to RECs at the request of large corporate buyers, like those in the RE100 (a global group of businesses committed to 100% renewable electricity). There are also emerging markets for other types of environmental commodities beyond RECs, such as Carbon Offset Credits, which generate their own set of unique environmental claims related to “net zero emissions”.

RECs are an exciting and evolving aspect of the energy industry that 5 is well-equipped to navigate for clients.

procurement-image6
“The speed at which 5 was able to provide feedback I’ve found to be a good marker of a real quality partner.”
- Brian Webb, Sustainability Director, Houghton College