Congoleum Flooring Avoids 2022 Energy Price Shocks with Strategic Electric & Gas Buying Plan

Client Overview: Congoleum

Congoleum Corporation successfully navigated the 2022 energy market volatility by implementing a strategic electric and gas buying plan across its manufacturing plants in Trainer, PA, and Maryland. Faced with soaring electricity and natural gas prices, the company needed a proactive approach to protect its production margins without disrupting operations.

Bakey Energy Consulting developed a long-term, risk-managed procurement strategy that included a block-and-index model for electricity and staggered futures purchases for natural gas. This tailored approach resulted in significant savings, reducing electricity costs by 24% and natural gas costs by 42%, ultimately decreasing annual energy expenditures by $730,000. By avoiding panic-driven pricing and smoothing out market fluctuations, Congoleum regained control over its energy costs, ensuring greater budget certainty for the future.

The Challenge

In 2022, Congoleum—a major U.S. manufacturer of resilient flooring—was hit with extreme volatility in energy markets. Both electricity and natural gas costs surged, threatening to inflate production expenses at its high-load manufacturing plants in Trainer, PA and Maryland.

Key risks faced:

Electric supply contract nearing renewal during record price spikes
Natural gas costs rising sharply due to NYMEX volatility and basis premiums
No layered strategy in place to manage fuel price risk over time
High pressure to protect margins without interrupting operations

Our Solution: Long-Term, Risk-Managed Energy Procurement

Bakey Energy Consulting designed and executed a tailored procurement strategy that prioritized cost control, price stability, and long-term planning—without sacrificing market opportunity.

For Electricity:

Block-and-Index Strategy
Locked in core load with fixed blocks at targeted intervals, allowing remainder to float on index pricing during off-peak periods.
Peak Load Management
Adjusted block sizes around seasonal demand and machine usage profiles.
Peak Load Capacity Reduction

Altering shifts to reduce their loads during coincident peaks. On average, they have been able to reduce their coincident peaks by 2 MW.

For Natural Gas:

Basis Lock
Secured firm transportation basis to mitigate regional price differentials.
NYMEX Strip Layering
Staggered futures purchases across multiple months and seasons to avoid bulk exposure and reduce average cost.
Integrated Load Forecasting
Matched both electric and gas purchasing with production forecasts and maintenance shutdown windows.

Results

Why It Worked

Rather than locking in high prices during a market panic, Congoleum used Bakey Energy Consulting’s phased, layered approach to regain control over energy costs. The block-and-index model for electricity and NYMEX layering for gas delivered immediate and long-term value, while smoothing out volatility across production seasons.