Visage Energy has been active in the DEI space since its inception promoting the development of methods to grow other Diverse Business Enterprises (DBEs).
DBE Growth Tool Example: FTAA
The Funds Transfer Agent Agreement (FTAA) is a unique financing facility to increase Diversity Equity and Inclusion (DEI) procurement at multinational corporations. The FTAA allows Women/Minority Owned Business Enterprises (WMBEs) to finance natural gas purchases for resale to Local Distribution Companies (LCDs) (of natural gas) without being required to post Letters of Credit. Southern California Gas Co. (SoCalGas), Visage Energy, Union Bank of California, and the Department of Energy (DOE) have all assisted in the formulation and development of the FTAA. The principles of the FTAA have been used successfully to finance hundreds of millions of dollars of natural gas purchases by certified WMBEs.
The Funds Transfer Agent Agreement (FTAA) CD-ROM contains features that provide instruction and aid in utilizing this financing facility.
In the past, many WMBEs were unable to finance their natural gas purchases because of their inability to assure the Producer that payment would be made for gas sold to the WMBE. Conversely, some Repurchasers were concerned abut the level of reliability of delivery of the gas contracted for with WMBEs. Many Repurchasers are of the opinion that diversity of suppliers is an essential and profitable business practice. This practice allows Repurchasers to avoid the potential of being exposed to "undue Market Powers" being excreted by a few large Producer/Suppliers. Consequently, many of those Repurchasers will limit the amount of natural gas purchased from any one of the large Producers, thereby providing opportunities for medium and small companies to market natural gas supplies to the Repurchaser. Additionally, some Repurchasers have determined that they have been able to lower the average cost of their gas purchases because of the increased number of suppliers from whom they purchased the commodity.
Summary of Benefits for Participants in the FTAA Process
Producer: Receives a contract with the FTA Bank that requires the bank to pay the Producer with the funds received from the Repurchaser.
Repurchaser: Receives gas from a reliable source under a mirror back-to-back supply contract and simply agrees to pay the funds into the Bank Control Account for all gas received in accordance with the terms and conditions of the FTAA.
WMBE: Obtains the ability to sell gas to the Repurchaser and purchase gas from the Producer without being required to post a letter of credit by being able to utilize the FTAA process.
FTA Bank: The bank's fiduciary responsibility is to represent to both Producer and the Repurchaser that there are matching deals with a positive spread. The FTA Bank signs contracts agreeing to receive the money from the Repurchaser and pay the Producer on the next business day. The bank does not have any obligation to pay the Producer if the funds are not received; however, there is minimal risk because the Repurchaser always pays for gas it has received. The FTA bank has use of multi-million dollars of FTAA funds for one business day and over the weekend if the funds are received on Friday. Additionally, the bank receives Community Reinvestment Act (CRA) credit for participating in the FTAA program.