About cooperation with the Żuławy Central Waterworks, which has the longest water supply network in rural areas in Europe

The power of water and energy, or how the Żuławy Central Waterworks turned the tap on energy prices

- The numbers speak for themselves. If I were to sign a contract for 2022 now, the company would probably pay over a million zlotys more for energy next year - says Tomasz Szczepański, president of the Central Waterworks Żuławski. And he continues: The current situation on the energy market is so dynamic that only a well-prepared purchasing strategy as well as quick, decisive and well-thought-out actions can secure the company's interests. That is why I believe that I have made the right decision by establishing cooperation with Enfree, which has prepared a strategy for us for the next two years. Arkadiusz Somnicki and Adam Wlizło from Enfree presented to us the product and price solutions available on the market, and then supported us in the negotiations of energy prices for 2022 and prepared a recommendation of activities for 2023 adapted to the market situation.

Centralny Wodociąg Żuławski Sp. z o.o. (CWŻ), which has the longest water supply network in rural Europe, consumes 3GWh of energy annually. The company has about 100 energy consumption points, four of which consume more than 80% of the energy received (loads in B23 tariff groups). Due to the amount of energy consumption (CWŻ consumes 1500 times more energy than a typical household), the entity is classified by sellers to the so-called strategic customer segment.

The president of CWŻ, when asked about the reasons why he decided to cooperate with Enfree this year, mentions two. Firstly, it is aware that when managing a large enterprise, it should always have access to reliable, specialist knowledge. Secondly, it states that the current situation on the energy market is so dynamic (more than three quarters of price increase y / y), difficult or even impossible to predict that it is worth entrusting this topic to experts who monitor the energy market every day and are able to help making decisions. And he adds: Taking care of the company's costs, it is therefore profitable to use professional consulting services.

Enfree's cooperation with the Central Waterworks Żuławski assumed the following tasks:

• conducting an audit of existing contracts and settlements with the current electricity supplier,
• applying on behalf of CWŻ to electricity sellers for sale offers for 2022 and preparation of recommendations for activities for 2023,
• supporting CWŻ in negotiating electricity prices, commercial fees and other terms of the energy purchase agreement.

- We started the first talks with CWŻ at the beginning of October 2021 - says Arkadiusz Somnicki, Member of the Management Board of Enfree. - The energy price rally has been going on for at least a few months. This year's (2021) energy prices of PLN 350 / MWh have long been unavailable for the following years. Customers who decided to purchase energy in the second half of the year had to face new rates, well exceeding PLN 500 / MWh. CWŻ, as well as thousands of other entities, knew that it would be hit by a wave of increases, but it was looking for ways to make them as low as possible.

The first step was to audit the existing contracts and settlements with the current electricity supplier by Enfree. This is the basis for the preparation of the Energy Purchase Strategy for 2022-2023. The analysis of the documents showed that CWŻ, due to the termination period of the current contract, was associated with the current electricity supplier until the end of 2022. Therefore, the energy purchase strategy for 2022 assumed the achievement of the lowest possible energy selling price at the seller, both in terms of the variable rate (PLN / MWh) and the trade fee (PLN / month).

Enfree, after obtaining the power of attorney from CWŻ, applied on its behalf to major energy suppliers for offers for 2022. The purpose of obtaining bids from competitors was to influence the current seller in terms of the maximum reduction in the price and the rate of the commercial fee. The tactic adopted by Enfree turned out to be right. Finally, the rates agreed in the price negotiation process turned out to be satisfactory. The president of CWŻ, in line with the adopted strategy, decided to purchase energy in the last week of October, and the following days showed (the situation lasts until the publication of the article, i.e. 16.12.2021) that the purchase was made in the so-called low price point and the achieved prices would be impossible to obtain at a later date. If you were to contract energy now, a month and a half later, the likely price would be approx. 80% higher (at that time, the prices of the band product for 2022 increased from approx. 435 to 775 PLN / MWh).

When preparing the energy purchase strategy for 2023, Enfree recommended CWŻ to change the energy supplier, provided that the offer from the current supplier would be less attractive than the offers of competing companies. At the same time, Enfree experts recommended the purchase of energy under the so-called indexed offer, usually offered to the largest entities.

- Companies using indexed offers can make decisions to purchase energy in several tranches, reducing the risk of buying in the so-called price peak - says Adam Wlizło, Member of the Management Board of Enfree. And he adds: - Together with Arkadiusz Somnicki, we know such offers inside out - we are co-authors of solutions that are widely available and offered on the market. We encourage entrepreneurs to be well prepared to take advantage of this type of offer: they can expect many benefits, at the same time they should know and be able to manage the risks associated with purchasing energy in the price indexation model. Therefore, we have prepared workshops for the employees of Centralny Wodociągi Żuławski, during which we discussed in detail the indexed offer, both its mechanism and the risk accompanying the offer.

When asked for a short summary, Tomasz Szczepański replies: - I am satisfied with the cooperation with Enfree so far. I already know that the price secured for 2022, while still high compared to the rates from this year, is currently not achievable on the market. I am also interested in the possibility of purchasing energy in the indexed model for 2023. Therefore, I decided to extend the cooperation agreement with Enfree - I already have real evidence that the ongoing access to reliable knowledge allows the company to save significant amounts.