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NATURAL GAS PROCUREMENT (formerly known as GASAMO)
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The LAS Program provides budgetable natural gas rates as well as
longer-term cost savings - between 2001 and 2006 collective savings were
$17 million for program members. Additionally, member rebates
through the LAS program have totaled $32 million since 2008.
LAS purchases natural gas for 165 Ontario municipalities and
organizations from the broader Ontario public sector (i.e. school
boards, DSSABs, etc.)
The program represents an impressive daily purchase volume of
255,000m3 of natural gas, for over 3,200 enrolled accounts.
Leveraging the expertise of Energy Advantage as program
administrator, LAS is able to offer many valuable benefits to program
members. In addition to strategic natural gas hedging, members
also receive annual consumption reports at both the organization and
facility level that can assist members in budgeting and conservation
planning.
The program seeks to provide low gas prices to program members and
annual budgetability. With natural gas being a commodity that is
heavily influenced by market conditions, it is hard to predict where gas
prices will fall, but LAS offers a consistent price from year to year
for all program participants through aggregated program tenders and a
combination of fixed and indexed pricing contracts.
Over the longer term the LAS program price has been equal to or lower
than utility gas prices, and has provided significant budgetability in
the process.
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The LAS Procurement Program strategy is simple:
- Budgetability– an annual program price allows
members to confidently budget for current year commodity costs (price is
announced in advanced of the current year)
- Prices below Market Value– program member
pricing has historically been competitive with utility gas rates, and
has provided significant savings in periods of fluctuating supply (i.e.
hurricanes, etc.)
- Maximize Purchasing Power– leveraging
economies-of-scale, program hedges 80-90% of required gas for each year
through aggregated purchases
Price stability is an important part of the Natural Gas Procurement
Program. The program provides members with a blended price that
reflects the cost of natural gas for an entire one-year period.
The LAS program year runs from November 1st -October 31st annually.
The utilization of a defined purchasing strategy allows LAS to
confidently secure supply up to four years into the future. LAS
purchases smaller gas contracts at points throughout the year with a
goal of incrementally building a total hedge portfolio of 80-90% of
program requirements. This approach ensures that LAS can
confidently provide members with long-term price predictability.
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Oversight of the LAS
Natural Gas Program is provided by staff and Energy Advantage, as well
as by the LAS Energy Advisory Committee and the LAS Board of Directors,
both of which are comprised of municipal representatives with a broad
range of expertise. The Advisory Committee has a mandate to advise
on the direction of the program, monitor performance, ensure
accountability, and provide advice regarding the future supply and price
of natural gas.
For more information
about LAS programs, please contact Jason Hagan,
LAS Program Coordinator at: 416 971-9856 ext. 320 | 1-877-426-6527
| jhagan@amo.on.ca
Updated January 21, 2011
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