Step forward to match supplier delivery, customer usage
Michael K. McShane is the Manager of Energy Supplier Services, Gas Choice Programs, for Baltimore Gas and Electric Company. BGE is an Exelon company.
At Baltimore Gas and Electric Company, BGE, the goal of forecasting an Energy Choice gas supplier delivery requirement follows a basic business tenet. The amount of gas delivered by a supplier each day should match the amount of gas used by their customers.
When the two pieces of this transaction match, then supplier costs for energy correlate closely with the revenue received from customers. However, when delivery volumes do not match usage billed on a consistent basis, and require future transactions to true-up the mismatches, then a level of risk has been introduced into the process. The risk resides in both the commodity side and cost side of the supplier operations.
The typical charges billed by the supplier are for gas used by the customer, as metered by the utility. For a variety of reasons, gas used by Choice customers will rarely equal gas delivered to the customer by the supplier in a given month.