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There is a great story by MarketWatch about how Safeway – possibly the largest consumer of electricity in California – hired an energy industry executive, Joseph Pettus, to help it find new ways of buying electricity, saving money, and being more environmentally aware.

“Pettus immediately went to work finding ways for Safeway to cut costs by directly purchasing energy from electricity providers,” MarketWatch writes. “That effort then snowballed into Safeway making increased purchases from ‘green’ energy generators, catapulting the California-based company into the realm of being one of the nation's biggest buyers of clean energy.”

According to the story, “It all started for Safeway when Pettus began navigating his way through the minefield left in the wake of the energy crisis that rocked California. A former employee of ExxonMobil and Fluor Engineering, Pettus recognized that businesses could negotiate directly with power wholesalers, but there were really only the big utilities available since the market liquidity for electricity had dried up after California's power debacle.

“So Pettus started trading natural gas futures. Once Safeway had accumulated enough of a stake in that form of energy, he sought out idle power plants that were state-of-the art but had been shuttered after the industry scaled back operations. With those power plants, Safeway forged what are known as ‘tolling’ agreements in which they brought the ingredients to the power marketer and asked them to produce electricity that it could buy.”

The story continues, “By employing generators that were both more modern and more efficient, he said, Safeway was able to cut the carbon dioxide produced in creating the amount of electricity needed to run its 1,800 stores nationwide. Initially that was just a pleasant side effect for Safeway…But now the company has embarked on a variety of green initiatives.

“Safeway now can generate its own energy if it wants. It went to the Federal Energy Regulatory Commission and obtained a wholesale energy marketing license. While Safeway doesn't produce its own energy, it can get creative about where it gets it, Pettus said…(Safeway) also pays wind-based producers to generate a supply equivalent to what it needs to power 18 stores, the company's corporate headquarters in Pleasanton, Calif., and all of the 280 retail gas-pumping stations that it owns.”
KC's View:
What we like about this story, and Safeway’s focus on energy, is that it isn’t accepting the status quo, but rather is looking for new angles to take in approaching old problems.

As we’ll note below in “OffBeat,” this sort of aggressiveness is needed in dealing with the national energy issue. Timidity gets you nowhere.