The Kansas Joint Utility Management Program (KJUMP) is a natural gas purchasing cooperative sponsored by the Kansas Association of School Boards. It is not a supplier of natural gas but “pools” the natural gas needs of its members to realize savings in energy costs. We provide the following services:
- Competitively bids the natural gas requirements of the member districts;
- Selects low cost providers;
- Provides price risk management;
- Provides single, consolidated statements including supplier and utility costs;
- Audits utility bills for accuracy; and
- Provides monthly savings reports.
How does KJUMP select suppliers?
KJUMP solicits gas supply proposals from all suppliers in this region. KJUMP selects the best supplier based on price and service criteria. KJUMP’s administrator,CenterPoint Energy, handles all contracting arrangements with suppliers.
To maintain credibility among competing suppliers, KJUMP periodically solicits proposals from all known reputable suppliers. Solicitations are for a market-based price. Because natural gas market prices are constantly changing, similar to the stock market but with much greater volatility, suppliers will not hold a fixed price. A “market” based bid says the supplier will sell at a margin over market. This allows KJUMP members to benefit from lower market add-ons because of the size of the KJUMP pool. KJUMP contracts with the low bidder(s) with the right to convert to a fixed price at any time prior to the start of any month.
All KJUMP members pay the same price for gas but total costs per unit may differ because of add-ons such as pipeline charges or transportation costs. Further differences may exist because of local utility tariffs.
KJUMP maximizes savings by:
- Managing portfolio purchasing under bulk contracts;
- Sharing administrative costs with lower management fees; and
- Maximizing the number of participants in terms of natural gas volume purchased.
The KJUMP purchasing pool is managed by CenterPoint Energy, one of the largest independent suppliers of natural gas. The duties of the administrator include:
Auditing and Bill Payment Services
Audits and pays all supply, transportation and distribution invoices and provides one consolidated billing statement for schools.
Manages the price risk of members in the pool by utilizing hedging and risk management tools and strategies to reduce volatility and price risk.
- Nominating and Balancing Service
Actively manages supply and demand requirements to ensure adequate supply and keep members penalty free.
Pays all utility and supply invoices. Provides each member district with a single aggregated invoice that tracks savings monthly and cumulatively versus the utility cost of gas.
- Customized Reporting and Budget Forecasting
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Customized natural gas reports for members, including budget forecasts on expected natural gas expenditures