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Structured buying: Active strategy can manage electricity and natural-gas price risk

Knowing your risk tolerance is vital, given volatile energy markets. Fixed contracts are not the only answer.

Seek a better way

Prices for oil, gas and other energy sources have always been subject to sudden, unpredictable swings due to forces nobody can control.

Some believe locking in a fully fixed price will eliminate risk exposure. However, this can be the riskiest strategy of all, considering the lost opportunity if prices move lower.

We see a better way. Our Energy Team is proud to introduce Structured Buying, an innovative active management strategy for electricity and natural gas.

Our Structured Buying system draws from lessons learned over decades of energy management experience, helping clients navigate supply contracts for multiple market cycles. There are a few reasons it works.

“Some believe locking in fully fixed energy prices will eliminate risk exposure. However, this can be the riskiest strategy of all.”


Distributing risk or Custom-made

Every organization needs to understand its price risk tolerance and employ an energy procurement strategy that delivers the lowest total cost while matching risk appetite.

Structured Buying is a customized price risk strategy that uses a proprietary, but customizable, algorithm that’s configured by region and season and is actively adjusted and reported upon.

As opposed to a fixed-price strategy, Structured Buying aims to spread purchasing risk over multiple buys, rather than a single purchase. Structured Buying addresses both the upside and downside risks associated with locking in energy prices.

If you are interested in learning more about how Structured Buying can improve your organization’s energy management strategy and results, please contact Cobb Pearson or Ashley Cline.


Authors                                                                                                                                                                     
Cobb Pearson

Cobb Pearson


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Ashley Cline

Ashley Cline


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