Four organizations will benefit from lower cost, budget certainty
By John Tredrea, Special Writer
Lambertville and West Amwell governmental bodies are expected to save more than $50,000 in a year on electricity as the result of a bidding process.
A new contract on the cost of obtaining electric power will benefit four agencies: the City of Lambertville, the Lambertville Municipal Utilities Authority, the West Amwell Fire Company and West Amwell Township.
The reverse auction, held March 19, was provided by Commercial Utility Consultants, Inc. The program is implemented with the assistance of energy consultant and procurement advisor T&M Associates.
The savings won’t be seen in the electric bill of a homeowner or business, but will be realized by the two municipal governments, the MUA and the fire company.
"In addition to the savings, another benefit of these contracts is the fixed price, which means our taxpayers now have budgetary certainty regarding municipal utility costs," said Lambertville Mayor David DelVecchio. "With the budgetary challenges facing our communities, these savings are crucial, particularly after this winter sent energy prices upwards beyond belief."
This is a different program from the energy aggregation passed by Lambertville and West Amwell in December, which is expected to bring a lower monthly energy bill to an estimated 2,680 households and four businesses.
In this reverse auction, Lambertville and West Amwell solicited bids for 12-month and 24-month contracts from electric power suppliers licensed by the NJ Board of Public Utilities (NJBPU).
TriEagle Energy L.P. was awarded two 24-month fixed-price contracts. The first is for the basic electric power accounts at a price of 8.719 cents per kilowatt-hour (kWh); the second is for street light accounts at a price of 5.95 cents per kWh.
Those prices would compare to 10.03 cents per kilowatt hour for general electricity, and 6.416 cents per kWh for street lights. The reduction is 18 percent for general electricity use, and 7 percent for street lights.
The contracts will lock-in fixed prices for their anticipated electric supply commodity usage for two-year period beginning with the May 2014 meter readings. While $50,000 is the projected savings for the first year, it is difficult to estimate the savings for the second year, said Michael Mandzik, director of energy procurement advisory services at T&M.
"Local governments throughout New Jersey remain hard-pressed to look for ways to reduce their operating costs," said Mr. Mandzik. "Lambertville and West Amwell have been working together by improving energy efficiency, implementing alternative energy sources, and now through cooperative purchasing. By joining together, they have been able to secure a more competitive price for their energy than would have otherwise been unavailable to them. If electric prices rise as expected next year, this new price will compound their savings throughout the term of the contract."
The goal of the online reverse auction was to pool the resources of municipal entities to purchase electricity competitively. The objectives are energy cost savings realized through stable, competitive prices, secured through a competitive bid process with the opportunity that might be unavailable to individual entities who solicit bids on their own.
Through these efforts, municipalities and government entities are positioned on a more equal footing with large commercial and industrial users when procuring competitively priced energy, said a release from T&M.