Ocean County will again tap into an online auction with the hopes of finding better prices and more competitive bidders when it comes to buying natural gas to heat and fuel its buildings this winter.
“The Internet is proving to be very helpful when it comes to getting good prices and a larger pool of bidders,” Ocean County Freeholder Director Joseph H. Vicari said.
An online “reverse auction” to purchase natural gas for the county is scheduled to begin at 9 a.m. Sept. 25 and will run until 11 a.m. that same day, according to a press release.
“The county’s energy consultant, PMK, has been monitoring the natural gas market for some time and has recommended the county go out to auction at this time,” said Ralph B. Patterson, Ocean County’s director of management and budget. “World Energy will be conducting the auction.”
World Energy is the state’s approved online auctioneer.
Patterson noted the online bidding is being termed a reverse auction because the county is seeking the lowest price, while during a traditional auction individuals or companies are generally looking to garner the highest price.
Back in April 2006, Ocean County entered into a contract with Woodruff Energy, for natural gas, at a price of $12.07 per decotherm.
“This new contract will cover the cost of providing natural gas to our library branches, our parks facilities, our garages, our fire and first aid training center, the police academy and all county facilities that use natural gas,” said Vicari, who serves as liaison to the county’s Department of Buildings and Grounds. “With more than 84 county facilities using natural gas, it’s imperative we do all we can to secure the best price.”
Although this is the first time Ocean County will use an Internet auction for natural gas, the county has been using the Internet to secure its interest rates for its general obligation bonds and its re-funding of bonds, according to the press release.
“We have received some very positive rates as a result of putting the bonds online,” said Freeholder John C. Bartlett Jr., who serves as liaison to the county’s Finance Department.
As an example, Bartlett noted that 12 bidders from across the country recently vied for the county’s $59 million general obligation bonds, with the successful bidder being Citigroup, providing an interest rate of 4.09 percent, which is about 2/10ths of a percent less than last year’s bond sale outcome, and only a fraction of a difference to the next closest bidder, Merrill Lynch.
During the 15-minute time frame of the Internet bond sale, the bids changed 21 times.