From Reuters Environmental Forum:
December 16, 2010- The California Public Utilities Commission on Thursday approved a uniquereverse auction market to let renewable energy developers bid on small-scale projects under a program that would generate up to 1,000 megawatts for the state’s three big investor-owned utilities and further spur the solar industry.
Think of it as the eBay approach to ramping up production of carbon-free electricity.
The idea is to avoid problems with so-called feed-in-tariffs that set rates artificially high for renewable energy production. In Spain, for example, high rates spurred a solar building boom that was followed by a crash when a cap on renewable energy production was reached and rates fell.
Under the plan approved by California regulators, the onus would be on developers to calculate the cost of their projects and then offer a bid high enough to generate a profit yet low enough to beat out competitors. The 1,000 megawatts to be developed would be split between Pacific Gas & Electric, Southern California Edison and San Diego Gas & Electric.
At peak output, 1,000 megawatts would power about 750,000 homes.
“This mechanism would also allow the state to pay developers a price that is sufficient to bring projects online but that does not provide surplus profits at ratepayers’ expense,” utilities commission staff wrote in their original proposal. “Providing a clear and steady long-term investment signal rather than providing a pre-determined price can create a competitive market.”
Dubbed a reverse action mechanism by the utilities commission, the program applies to renewable energy projects that generate up to 20 megawatts of electricity. The hope is to encourage development of small-scale solar power plants that can be built relatively fast and plugged into the grid without major – and expensive – transmission upgrades.
Developers much complete their projects within 18 months and deploy commercially proven technology, according to the decision adopted Thursday.
Adam Browning, executive director of The Vote Solar Initiative, a non-profit San Francisco advocacy group, said the new program fills a gap in California’s renewable energy program.
The state offers incentives for homeowners and businesses to install solar systems that generate up to 1.5 megawatts and utilities have signed contracts with developers to build big projects that will produce hundreds of megawatts each. Lost in the middle were mid-sized projects.
“The decision will help expedite solar development,” said Browning. “This is a way of harnessing the power of distributed generation to deliver a more robust grid and renewable energy development in a much more timely fashion.”
To view the original article, click here.
A Kentucky utility recently partnered with eBridge to purchase water treatment chemicals. Thirteen suppliers participated in the bid for a variety of chemicals.
Throughout the course of the reverse auction bidding event, 640 bids were placed and first place changed hands 105 times, showing the suppliers were actively competing for the business.
The estimated savings on the thirteen chemicals at the conclusion of the event was 11% versus least year’s budget.
Check out this recent post from Tim Taft’s blog, The Strategic Sourcer.
I was emailed the following story a few days ago that made me think about how Procurement Services Providers (PSP’s) should be regarded:” A blind boy sat on the steps of a building with a hat by his feet. He held up a sign which said: “I am blind, please help.” There were only a few coins in the hat.
A man was walking by. He took a few coins from his pocket and dropped them into the hat. He then took the sign, turned it around, and wrote some words. He put the sign back so that everyone who walked by would see the new words.
Soon the hat began to fill up. A lot more people were giving money to the blind boy.
That afternoon the man who changed the sign came to see how things were going. The boy recognized his footsteps and asked, “Were you the one who changed my sign this morning? What did you write?”
The man said, “I only wrote the truth. I said what you said but in a different way. I wrote, Today is a beautiful day but I cannot see it.”
The goal of a Procurement Service Provider is not to point out the mistakes of business owners, but to assist them in increasing productivity and profitability by exploring ways of doing it better, faster, and effectively.
PSP’s should be considered an extension of one’s internal procurement department bring to the table areas of expertise and innovative ideas to ensure best prices and high quality products & services are received. Business owners should feel like they are part of the process by being involved in decision making and by encouraging employees to be participate in any sourcing initiatives in place.
Moral of the Story: “When life gives you 100 reasons to cry, show life that you have 1000 reasons to smile.”
Be creative. Be innovative. Think differently and positively
To read more from The Strategic Sorcerer, click here.
A Midwestern city partnered with eBridge to purchase water treatment chemicals a total of 12 suppliers participated in the event, placing a total of 231 consecutive bids.
In a reverse auction, suppliers have the opportunity to place subsequent lowering bids for a product or service. In this case, several different water treatment chemicals. First place changed hands 29 times, with the clock extending 94 times.
Because the price of chemicals is volatile, it’s important to note that first and second place suppliers were less than .2% apart, indicating true market value had been achieved for the purchase.
The city was very pleased with the bid and will run several more items through the process in the future.
It’s no surprise that a company that prides itself in being an “innovator in the production and marketing of premium, value-added chicken products”, partnered with eBridge to purchase their stretch film for meat packaging.
The reverse auction is becoming the industry standard for purchasing professionals and this poultry company knew the reverse auction process fit with their company values to be “at the forefront of many of the industry’s top production and packaging solutions” by partnering with eBridge on this purchase.
Not only did eBridge help the organization save nearly 13% on the purchase of stretch film for their meat packaging, but eBridge brought more suppliers to the bid, ensuring this company achieved true market value for their purchase.
In a traditional paper bid process, the company would have only received 9 bids, which was the total number of suppliers. But with the reverse auction, the company received 72 bids from the nine suppliers.
Because if the efficiency and financial success of this bid, the company is poised to have a long relationship with the reverse auction process, allowing them to operate more efficiently and profitably, still producing the same quality product as they always have.
A Midwestern city partnered with eBridge to purchase water treatment chemicals a total of 12 suppliers participated in the event, placing a total of 231 consecutive bids.
In a reverse aucution, suppliers have the opportunity to place subsequent lowering bids for a product or service. In this case, several different water treatment chemicals. First place changed hands 29 times, with the clock extending 94 times.
Because the price of chemicals is volatile, it’s important to note that first and second place suppliers were less than .2% apart, indicating true market value had been achieved for the purchase.
The city was very pleased with the bid and will run several more items through the process in the future.
The Associated Press
October 17, 2010
DANVILLE, Ky. — A central Kentucky city has turned to online auctions to buy supplies such as road salt, water treatment chemicals and a new city fire truck.
Danville city commissioners and an official with the company running the sales say the method appears to be saving the city money.
Jock Kinnett, a representative of Louisville-based eBridge, told the Danville Advocate-Messenger that the city saved 16 percent on chemical purchases over the previous year.
The company organizes auctions for public procurement in a timed setting, much the same way an eBay auction is operated.
Kinnett said the company collects a percentage of the sale from the seller after the city has paid the vendor.
Read more: http://www.kentucky.com/2010/10/17/1483627/ky-city-turns-to-online-auctions.html#ixzz12iQDrDYo
A prominent south Florida city partnered with eBridge to purchase steel containers and roll off boxes. These items are used in waste management.
Four suppliers participated in the event, placing a total of 526 bids on the 26 different line items. The clock extended 110 times, allowing suppliers to continue to compete for business. First place changed hands 114 times, making the event outcome uncertain until the very last second.
Final pricing indicated a savings of 29%. It should be noted that the savings is based on a 2008 budget number for this bid- two years ago.
A Kentucky city partnered with eBridge to purchase their road salt in preparation for the winter months. eBridge ran this same bid last year and the city knew the reverse auction process was necessary for their city to purchase the salt at a competitive price point.
eBridge’s team of purchasing professionals sourced suppliers for this bid, with four being chosen by the city to participate.
During the bidding event, a total of 160 bids were placed among the four suppliers, resulting in 80 first place turnovers and 59 extension of the clock, indicating the suppliers were ready to compete for this business.
At the conclusion of the bid, the city had realized a 10% savings versus last year’s pricing, indicating that while they purchased competitively last year through the reverse auction, they achieved true market value for their purchase for both this year and last.
Brings Fortune 500 executive experience and innovation to leadership team
Louisville, KY- September 27, 2010– eBridge Business Solutions, a leader in fully managed business solutions and recently named one of American’s fastest growing companies by Inc Magazine for 2010, today announced the formation of the Board of Directors.
Members include James Headlee, Gregg Dedrick, Neil Ramsey and Miguel A. de Jesus. The formation of the board comes after the development of the eBridge brand and explosive growth through their cost reduction strategies including reverse auction solutions and the addition of two new services, managed merchant card processing and web based payroll.
“Forming a Board of Directors with this caliber of seasoned professionals ensures the company will continue to benefit from a diversity of knowledge and opinions. Because of their strong leadership skills, extensive management experience, and proven track records, they make an excellent team to lead eBridge,” said Steve Lewis, President.
About the Board
James Headlee is eBridge’s Chief Executive Officer. He is responsible for overseeing the strategy and direction of the company. Jim leverages 25 years of experience in procurement strategies, negotiation and consulting to bring foresight and depth to the eBridge Board of Directors. Prior to eBridge, as the founder and CEO of Summit Energy, Jim spent 17 years leading the organization’s explosive growth, developing energy solutions for Fortune 500 companies and employing more than 325 staff members across seven international offices.
Gregg Dedrick is co-founder of Whole Strategies, an organizational consulting firm. Prior to Whole Strategies, Gregg was President and Chief Concept Officer at KFC where he led the development of the company’s grilled chicken product. Gregg has held senior executive positions at KFC, Yum Brands, Pepsi-Cola and Pizza Hut and brings nearly 30 years of experience in operations and organizational resource planning.
Neil Ramsey is President and Chief Executive Officer of Ramsey Quantitative Systems, Inc. (RQSI), a Louisville, Kentucky-based private investment firm. Neil is primarily responsible for the leadership of quantitative strategies development and providing strategic direction for RQSI. Prior to forming RQSI, he was a consultant at the Boston Consulting Group where he worked with both domestic and foreign multi-nationals in developing corporate strategies.
Miguel A. de Jesus is a highly accomplished, results-oriented senior-level leader with more than 20 years experience leading business management and development, and global sales and marketing with two Fortune 500 companies. Miguel is a Certified Professional Coach (CPC)- an ICF accredited program from the College of Executive Coaching. He is also an MBA business consultant and executive level business and career coach, dedicated to helping others achieve greater traction in the direction of their dreams.
About eBridge
eBridge Business Solutions, LLC provides fully managed cost reduction strategies including reverse auction procurement, managed merchant card and web based payroll services. eBridge was recently named one of America’s fastest growing companies by Inc Magazine.