Illinois Educational Institutions First to Benefit From New Electric Procurement Opportunity
ARAMARK, a world leader in professional services, and Amerex Energy Services have introduced an innovative electric procurement product to the State of Illinois designed to assist educational institutions in managing their utility costs. Loyola University, Saint Xavier University, Rockford College and Indian Prairie School District, are the State’s first consumers to contract for deregulated electric power using a Heat Rate pricing model. This unique model is designed to help customers secure lower electric rates and maintain flexibility in a volatile market.
“We are excited about the utility cost reduction opportunity afforded by the Heat Rate procurement strategy,” said Mike Leone, Senior Vice President, ARAMARK Higher Education. “It increases ARAMARK’s ability to offer truly customized supply and demand-side energy management strategies to educational institutions.”
This procurement strategy, called “Managed Heat Rate,” capitalizes on deregulation, placing more control with the consumer by unbundling and separately managing the primary components that comprise the price of electricity. Amerex Energy Services has successfully unbundled the electric price components in Illinois, allowing ARAMARK to introduce this innovative approach to educational institution as a means to manage escalating utility budgets.
“These colleges, universities and school districts are innovators in the State of Illinois,” said Vince Martinez, National Director, Amerex Energy Services. “They have taken the time to understand the new landscape of electric procurement and are leading the way for other institutions to benefit from electric deregulation.”
Heat Rate contracts can offer long-term cost savings over traditional fixed-priced contracts. They provide price stability and budget certainty, which are features particularly desired by educational institutions.
“The managed approach is an excellent alternative to fixed rate pricing,” said Paul Matthews, Assistant Vice President for Facilities, Saint Xavier University. “Our multi-year contract protects the integrity of our budget this year. It also provides greater price predictability in future years than we could obtain with a fixed rate agreement. We have great confidence in this product. The numbers speak for themselves.”
“The Managed Heat Rate is one of the most innovative electric procurement strategies I have seen,” said Bill Laird, Chief Financial Officer at Loyola University. “It truly provides us with flexibility, budget predictability and the opportunity to reduce our electric costs.”
ARAMARK and Amerex began offering innovative power procurement contracts to the Higher Education industry in 2006. The companies partnered with Baylor University in Texas to secure a 10-year discounted Heat Rate contract that resulted in a unit price reduction of 35% and savings in excess of $20 million. The National Association of College and University Business Officers (NACUBO) honored Baylor with its Innovation of the Year Award in 2007. In addition, Energy Risk magazine recognized the Baylor contract as one of the Top Deals globally in 2007.
Amerex Energy Services is a division of Amerex Brokers LLC. Amerex Energy Services is a national energy consultant that provides industrial, commercial and institutional clients with a wide array of sophisticated energy and energy-related financial tools designed to provide a stable platform to manage risk. Founded in 1978, Amerex is a leading over-the-counter energy brokerage offering services in electricity, natural gas, emission credits and allowances, renewable energy credits, retail energy procurement and energy data services. From its office in Houston, Amerex offers liquidity and timely execution to meet the needs of a global client network of more than 1,000 firms including thousands of traders and risk management professionals. For additional information, please visit www.amerexenergy.com. Amerex Brokers LLC is a wholly-owned subsidiary of GFI Group Inc. (Nasdaq:GFIG), a leading inter-dealer broker specializing in over-the-counter derivatives products and related securities. GFI provides brokerage services, market data and analytics software products for a range of credit, financial, equity and commodity instruments. GFI operates one of the largest OTC energy brokerage businesses in North America both directly and through its Amerex and StarSupply businesses.
ARAMARK is a leader in professional services, providing award-winning food services, facilities management, and uniform and career apparel to health care institutions, universities and school districts, stadiums and arenas, and businesses around the world. In FORTUNE magazine’s 2008 list of “America’s Most Admired Companies,” ARAMARK was ranked number one in its industry, consistently ranking since 1998 as one of the top three most admired companies in its industry as evaluated by peers and analysts. ARAMARK also ranked first in its industry in the 2007 FORTUNE 500 survey. ARAMARK seeks to responsibly address issues that matter to its clients, customers, employees and communities by focusing on employee advocacy, environmental stewardship, health and wellness, and community involvement. Headquartered in Philadelphia, ARAMARK has approximately 250,000 employees serving clients in 19 countries. Learn more at the company’s Web site, www.aramark.com.