CASE STUDY
Boston Scientific
Natural Gas Procurement

Competitive Energy Services was retained by Boston Scientific Corporation (BSCI) to assist in the procurement of natural gas supplies for its facilities in Massachusetts.  CES helped BSCI procure natural gas supply for eleven facilities located in the towns of Quincy, Watertown and Natick, MA.

Prior to obtaining pricing, CES helped BSCI evaluate the current natural gas market, develop a load profile of existing and new proposed buildings, and develop a strategy for securing the natural gas commodity.  This process included the compilation of existing data and working with the engineering staff on future usage for newer buildings, provision of historical NYMEX future and spot price information, regular market updates and an analysis of the risks associated with possible future price movements.  CES worked with ten natural gas suppliers to obtain the best combination of contract terms and price availability in the market.

CES obtained pricing from suppliers in a competitive bid process and aggregated the results for BSCI.  The bid process ensured that the lowest prices available in then the market were obtained.  As is often the case with energy procurement, a direct comparison of suppliers based on price was not sufficient.  Suppliers offered several different products including: full requirements fixed price; fixed prices with variable market components based on monthly usage and an allowable variance; and fixed price with a variable market component on usage outside the requirements of the variance or usage band.   Each of these products had varying levels of risk for BSCI, and a complete understanding of these risks was essential prior to choosing a particular product or supplier.

Supplier contracts also contained significant differences in non-price terms and conditions.  These differences are often overlooked but can result in a transfer in risk from the seller to the buyer.  CES reviewed each contract and alerted BSCI of potential issues.   Once a supplier and product was selected that best fit BSCI's needs and risk tolerance, CES helped negotiate changes to the contract terms and conditions.  These changes reduced the risk to BSCI in the event of a contract default or dispute.

CES continues to assist BSCI with current natural gas supply needs and is helping to plan future changes in facility loads.