Harvard learns how to buy power at wholesale

Retail competition has brought countless benefits to large customers — even Harvard University — but what if you can't get a retail marketer to make an attractive offer? Harvard energy buyer, Mary Smith, tried to buy at wholesale and got a quick education in a different way of life. Scott Bryant, top power buyer from the paper firm Mead Westvaco, told why his firm prefers the risks and gain from buying direct from generators.

Scott Helm, president of American PowerNet, a pioneer of direct buying at wholesale, joined a Restructuring Today audio conference yesterday exploring the value and process of buying power from the wholesale market. Mead Westvaco just couldn't find a retail marketer that met the firm's needs, Bryant said.

The company's unusual load profile didn't entice much savings from retailers, so Bryant explored the wholesale market, with Scott Helm's guidance. What he found was a range of benefits, including more willing suppliers and greater flexibility and a lot more offers. It's easier to buy at retail, Helm admitted, but the "name of the game now is flexibility."

Wholesale buying best positions customers to take advantage of all the benefits of open markets, he added. Wholesale buying gives customers greater opportunity to take advantage of market prices, Helm noted. The wholesale market lets customers buy in portfolios to hedge against market timing.

Reproduced from the September 20, 2005 issue of Restructuring Today with the permission of the publisher, GHI LLC
(+1-202-351-6880, www.restructuringtoday.com).