Digital Realty Leveraging Scale and Expertise to Lower Customers' Energy Costs
Sign-Up for Free Energy, Facility, Power Newsletter (EFPN) newsletter
Digital Realty (NYSE: DLR), a leading global provider of data center, colocation and interconnection solutions, is capitalizing on its scale, sophisticated procurement processes and investment-grade credit ratings to benefit customers by contracting electricity supply in bulk to achieve lower prices throughout the year, while simultaneously providing protection against escalating prices during seasonal spikes. Digital Realty aggregates customer demand and collaborates with energy suppliers to negotiate discounted prices, which are then passed on to customers in the deregulated markets of Connecticut, Illinois, Massachusetts, New Jersey, New Yorkand Texas.
"Aggregating cumulative customer load demand across multiple Digital Realty facilities within a given metropolitan area enables us to obtain substantial discounts on our projected utility load for extended periods of time," said Erich Sanchack, Executive Vice President of Operations at Digital Realty. "These agreements represent some of the lowest-cost pricing within our portfolio. As a result, we are able to help insulate our customers from financial risk and cost volatility, leading to competitive advantage and greater customer satisfaction. We pass the savings directly along to our customers, significantly lowering their total cost of ownership."
Digital Realty's energy procurement initiatives are paying off for customers around the country. The company recently executed an energy consolidation strategy for its greater Chicago portfolio, locking in rates more than 20% below current market through 2022. In Texas, scorching temperatures in Dallas, Austin, San Antonio and Houston recently drove the state electric grid to an all-time peak demand record of more than 73,000 megawatts. The spike in demand, along with reduced generation reserve from the retirement of coal plants, pushed daily market pricing as high as $184per megawatt-hour. Digital Realty was able to capitalize on its market presence, energy procurement strategy and investment grade credit ratings to protect customers by securing low market rates for the majority of its load.
"Our commitment to customer satisfaction, which begins with our unmatched resiliency – five nines of uptime for the past eleven years – extends to ongoing cost reduction for power, a primary consideration for any company's data center decision-making," said Digital Realty Chief Executive Officer A. William Stein. "Our market presence and platform represent significant advantages when negotiating on customers' behalf, driving economic efficiencies we are pleased to secure for their benefit."