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Should You Time the Energy Markets?

March 2, 2018

Warren Buffett and other successful investors hold fast to a basic core belief when it comes to investing in equities:

Never try to time the market.

At Stanwich Energy Advisors, we agree with Mr. Buffett’s advice, but supplement it with our own respectful addition:

Always try to time the commodities market!

This distinction is an important one. Energy is a commodity, not an equity, and we have found that you actually want to time the commodity market, as it can fluctuate dramatically based on supply and demand.

According to the efficient market theory, an asset’s price fully reflects all available information. However, despite the increasing use of computers in all areas of investing, most decision making is still done by human beings, and is therefore subject to human error. Between these errors, seasonal weather patterns, and disruptive events like hurricanes and blizzards, the energy market has price dislocation that can be taken advantage of – If you know where to look. At Stanwich Energy, our business is predicated upon spotting these price anomalies.

Depending on your risk tolerance level, there are different strategies we can offer when purchasing energy in order to take advantage of the market. Keep in mind that the goal is not to buy at the absolute lowest price possible, but to secure favorable pricing within the context of all relevant data. Think of it as buying real estate at below replacement cost or buying real estate opportunistically knowing that your basis will protect your downside.

Essentially, we coach you to wait for a “pitch” that falls in your sweet spot. When it comes to energy procurement, nobody’s going to call you out on strikes. Our goal is to wait for a pitch down the middle of the plate. When you buy energy, Stanwich makes sure that you only lock in when all the information, all the data, computes in your favor.

Should You Time the Energy Markets?

March 2, 2018 Warren Buffett and other successful investors hold fast to a basic core belief when it comes to investing in equities: Never try to time the market. At.

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Clean Energy Is Now Cheaper than Traditional Energy

February 8, 2018

A recent bidding process conducted by Xcel Energy has shocked the industry as clean energy bids including wind and solar with battery storage came in cheaper than bids from traditional fuel sources.

Seeking to replace two of their existing coal power plants with renewable energy sources, Xcel received over 430 individual bids. Comparatively, a similar bidding process in 2013 received 55 bids. This boom in growth, coupled with the low prices of the bids, highlights how quickly renewable energy has advanced in the last 4 years. For more in-depth information about the results of Xcel’s solicitation, please read this article from Vox.

Energy purchasing strategies involving renewable energy have been analyzed and implemented by Stanwich Energy when advising clients on their best option. The results from Xcel’s solicitation give further credence to Stanwich’s holistic approach to the energy markets. Sometimes it can pay to look at all available options instead of only the most common ones.

For more information on incorporating renewable energy into your portfolio, contact your Stanwich Energy representative.

Clean Energy Is Now Cheaper than Traditional Energy

February 8, 2018 A recent bidding process conducted by Xcel Energy has shocked the industry as clean energy bids including wind and solar with battery storage came in cheaper than.

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Welcome to Stanwich Energy Advisors

Welcome to our newly designed website.  Please check out our services and our approach to get a better understanding of the capabilities of Stanwich.

Welcome to Stanwich Energy Advisors

Welcome to our newly designed website.  Please check out our services and our approach to get a better understanding of the capabilities of Stanwich.

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Manufacturing Case Study

State: Connecticut
Industry: Manufacturing
Service: Risk Management & Energy Procurement

Client: A large metals manufacturing company engaged Stanwich Energy to help manage their risk exposure while shopping for a managed variable electricity contract.

Result: Stanwich reduced the client’s risk and also achieved significant savings of 17 percent.

Summary: The client owns a number of large manufacturing facilities throughout the country.  The company turned to Stanwich to gain better visibility into, and control over, energy spend and procurement.

After studying the client’s demand profile, Stanwich recommended a new approach to buying power.  By shifting their heavy manufacturing to off-peak hours, there was a tremendous opportunity to capture cost savings due to low wholesale power prices.  Since the client was on a fully fixed rate in the past, Stanwich secured a favorable on-peak block and structured the contract to allow the off-peak hours to float on the index market. The result: A year-over-year cost savings of 17%.

Manufacturing Case Study

State: Connecticut Industry: Manufacturing Service: Risk Management & Energy Procurement Client: A large metals manufacturing company engaged Stanwich Energy to help manage their risk exposure while shopping for a managed.

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Data Center Case Study

State:  New York
Industry: Data Center
Service: Energy Procurement

Client: A large publicly traded financial institution with data centers in New York

Result: Stanwich Energy reduced energy costs 14% via trigger price fixed option

Summary:  This particular client has always had a low appetite for risk and finds that fixed pricing is very helpful when projecting costs for the fiscal year. The engagement with this customer underscores the client centric approach Stanwich takes to energy procurement.

Stanwich helped this customer mitigate risk in this high-spend area by taking advantage of low market conditions to secure favorable fixed rates. Stanwich worked closely with suppliers to provide this client with sophisticated products that were tailored to fit the company’s unique risk management approach.  Initially, prices weren’t competitive.  Stanwich recommended an index with a trigger price that was approved by the customer to automatically lock in a low rate when the market began to trend lower.  Advising this customer means that Stanwich must continuously monitor the energy markets to meet budgetary goals and objectives, identify opportunities to reduce spend, and manage the customer’s exposure to risk.

Stanwich Energy’s robust reporting and analytical tools have proved useful in measuring the success of implemented energy supply contracts. Customized reports deliver visibility into the customer’s energy spend through a summary view of all managed energy supply contracts that include cost avoidance figures.  Stanwich manages the data needed to assess the performance and ongoing status of the overall procurement strategy.

Data Center Case Study

State:  New York Industry: Data Center Service: Energy Procurement Client: A large publicly traded financial institution with data centers in New York Result: Stanwich Energy reduced energy costs 14% via.

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