Every PE firm I've worked with has a version of the same value-creation-plan template. Pricing. Procurement. Working capital. Commercial ops. Tech enablement. Add-on pipeline. You've seen it. You've probably built it. What you probably don't have on it is energy — and that's a miss.

Energy doesn't usually show up on the VCP because it doesn't feel strategic. It's a utility line item. Lights turn on, bills get paid, end of story. But spend 30 minutes with a portco's utility bills and you'll find an EBITDA opportunity that's lower-risk and faster to realize than most of the items on the plan. Here's how to actually capture it.

What Goes on the Plan

The portco energy playbook has five workstreams. Not all five apply to every portco, but at least three usually do. Treat this as a menu — pick the ones that move the number for each company.

1. Supply-Side Procurement

This is the big one and the obvious one. If the portco is in a deregulated state — Texas, Pennsylvania, Ohio, Illinois, New York, New Jersey, Massachusetts, Maryland, Connecticut, Michigan, and the rest — you can competitively bid the electricity and natural gas supply portion of their utility bills. This is typically 40-60% of the total bill, and it's the portion where a good procurement process generates savings of 15-30%.

Non-negotiables for this workstream:

• Solicit 10-20 competitive bids per portco per commodity, not 2-3.
• Normalize the terms before comparing price. A "cheaper" contract with a bad bandwidth clause or a punitive early-termination fee isn't cheaper.
• Align the contract term with the portco's hold thesis. A three-year contract signed 12 months before exit is usually a mistake — you're handing the next owner a contract you signed for your own timing.
• Time the lock. Forward markets move. A lock during a gas spike is a very different outcome than a lock during a shoulder-season lull. A good advisor watches the curve daily.

2. Bill Auditing and Tariff Optimization

This is the one most operating teams ignore, and it's usually where we find money in the first 30 days. Utility bills are wrong more often than anyone wants to admit — and almost nobody audits them.

What to look for:

• Rate schedule misclassification: The portco is on the general service tariff when they should be on the medium or large commercial tariff. The utility isn't going to move them voluntarily. 5-15% savings just from the reclassification.
• Demand ratchet errors: A single bad demand reading from three years ago is still inflating the portco's monthly capacity charges. This happens constantly. Nobody checks.
• Sales tax on exempt usage: Manufacturing portcos in most states get a sales-tax exemption on electricity used in production. Every year we find portcos that qualify and aren't claiming it. The back-refund is often six figures.
• Misapplied riders and surcharges: Unregulated charges, cancelled riders still being billed, incorrect capacity tags. This is the part where a facilities manager's eyes glaze over and a trained bill auditor finds four line items of recurring overcharges.

3. Demand and Capacity Management

In PJM, ISO-NE, and NYISO markets, capacity charges can run 20-35% of a portco's total electric bill. They're calculated based on the portco's usage during a small number of peak hours each year — usually five. Reduce consumption during those five hours and you can reduce the following year's capacity cost by 15-25%.

Implementing this isn't rocket science. It's a combination of load forecasting, advance notice on likely peak days, and a portco-level protocol for curtailing non-critical load when called. For manufacturing, cold storage, and large commercial portcos, the EBITDA impact can be $50-300K per site annually. No capex required — just a protocol.

4. Demand Response Revenue

Related but different. Demand response programs pay portcos to reduce load when the grid is stressed. ERCOT's ERS program, PJM's Emergency Load Response, ISO-NE's Day-Ahead Capacity program — these are real revenue streams that most portcos never enroll in. For a portco with curtailable load (industrial, cold storage, multi-site retail with backup generators), enrollment can generate $100K-$500K annually. Pure new revenue against no cost.

5. Bandwidth and Usage Management

Fixed-rate contracts usually include a "bandwidth" — a range around the portco's forecasted usage, typically ±10%. Go outside the band and the supplier either swings the delta at unfavorable rates or charges explicit penalties. For portcos undergoing facility expansion, consolidation, or operational change (which is basically every portco), bandwidth management is a real cost category that never gets flagged until the pain hits.

On the front end: negotiate realistic bandwidths during the original contract. On the back end: monitor usage monthly so you see a bandwidth break coming three months out, not at the true-up invoice.

Who Owns This at the Portco Level

The dirty secret is that most portcos don't have a natural owner for energy. Facilities handles the meter. Finance pays the bill. Procurement never touches it because it's "utilities." So nobody runs the process.

The cleanest model we see at well-run PE portfolios:

• CFO is the decision authority. Any energy contract over $500K in annual spend requires CFO signoff. This single rule kills the facilities-manager-signs-whatever-the-broker-brings pattern.
• Facilities remains the operational contact. Meter data, outage coordination, curtailment execution — this stays with ops. Facilities doesn't need to own contracts; they need to own execution.
• An external energy advisor runs procurement. This is us or someone like us. We run the RFPs, normalize the bids, manage the bill audits, monitor the market, flag renewal windows. We sit on top of every portco in the portfolio, which means the CFO at any given portco gets the benefit of portfolio-wide pricing and intelligence.
• The operating partner at the fund has visibility. Quarterly report: current contracts, upcoming renewals, recent savings, pipeline opportunities. This takes 15 minutes a quarter and keeps energy on the value-creation dashboard where it belongs.

Timing It to the Hold

One of the subtler things about energy procurement in a PE context is that the right contract depends on where you are in the hold.

• Years 1-2 (value creation): Aggressive. Lock in favorable rates, audit every bill, enroll in demand response, optimize tariffs. This is where you build the EBITDA bridge.
• Years 3-4 (run rate): Maintain. Watch markets, renew thoughtfully, standardize contracts across portcos for consistency and clean reporting.
• Year 5 (pre-exit): Position. A documented, competitively bid energy cost structure is a diligence asset. Don't sign a five-year contract six months before exit — you're pricing the next owner's hold, not yours. Match contract term to expected close date.

What Good Looks Like

A well-run portco energy program at a mid-market PE firm typically delivers:

• 15-25% reduction in supply costs on competitively bid portcos
• 3-8% additional savings from bill audits and tariff optimization
• $50-500K of demand response revenue per eligible industrial portco
• Five to seven figures of cumulative annual EBITDA impact across a typical portfolio
• Clean, documented contract files ready for diligence at exit

None of this is exotic. None of it requires new technology, new hires, or a change to the core business. It's a procurement function that most PE firms have never thought to professionalize. The firms that do it well quietly run up meaningful numbers across the portfolio. The firms that don't leave the money for their LPs to wonder about later.