1 min read

Spotlight – Financial Institution’s New Approach to Energy Risk Management

November 12, 2020

Financial Institution 3

A large financial institution with multiple facilities across the country began to work with 5 in 2016 to create a more substantive approach to managing its electricity costs. Prior to hiring 5, this Fortune 500 company waited until the end of its current electricity agreements before considering renewal opportunities.

5 partnered with the client to improve their electricity procurement process and to also support their other energy-related needs. This client was quick to understand the need to adopt a purchasing strategy that was based on managing price risk given their experience with loans, interest rates, and other financial instruments. 5’s energy advisory team reviewed the operating profile of their current facilities, in addition to examining their electricity budgets and price risk tolerance. This baseline assessment formed the foundation of this client’s new procurement strategy.

The new purchasing plan adopted by this financial institution relied heavily on market insights from 5’s proprietary energy market platform, Level5, to make better buying decisions. These buying decisions were based on market technical and fundamental analyses as opposed to waiting until the end of a given contract to make those purchases. 5 was also instrumental in adding and negotiating favorable language to this client’s new electricity agreements. Additionally, this client looked to 5 for support services beyond commodity procurement. These services include electricity bill audits and identifying power factor correction opportunities to lower their demand charges.

5 is privileged to work with this client, applying similar risk management principles for energy procurement that this institution uses for managing its exposure to volatile financial markets.


Written by 5

Founded in 2011, 5 comprises a team of energy innovators, commodity traders, analysts, engineers, and former energy supplier executives. Together, they serve a broad array of private and public sector clients throughout the United States and Mexico, providing strategic advice on energy-related matters including procurement, demand-side management, rate optimization, regulatory intervention, benchmarking, bill auditing, RFP management, sustainability planning services, renewable power, and distributed generation. With an eye on growth, 5 has initiated a number of strategic partnerships and acquisitions, including the 2019 acquisition of Luthin Associates. 5 has been named to the Inc. 5000 list of fastest-growing companies in the U.S. for five consecutive years. The firm has also received numerous accolades and national awards for its corporate culture, leadership and innovation, including 5 consecutive years as a top 10 Best Company to Work for in Texas according to Texas Monthly Magazine.