Fall/Winter 2001

Baltimore Regional Cooperative Purchasing Committee Awards Contract for Electricity

The members of the Baltimore Regional Cooperative Purchasing Committee (BRCPC) awarded contracts totaling nearly $21 million to Washington Gas Energy Services and Pepco Energy Services to provide electricity to a consortium of 19 local government agencies, community colleges and public school systems in the Baltimore region. The participants are projected to save more than $1 million over the course of the 12-month contract, compared with the default rate.

The BRCPC, a standing committee of the Baltimore Metropolitan Council, began investigating the value of a collective purchase of electricity supply in 1999, and in October, 2000, awarded a 16-month contract to First Energy Services Corporation of Toledo, Ohio. The new awards will take effect with the first billing in April, 2002.

As in 2000, Baltimore City volunteered to serve as the lead agency for the procurement process. The Baltimore Metropolitan Council worked with the BRCPC members to provide consultant services to help prepare and evaluate the bid. The BRCPC opened the purchasing pool to all local government entities in the Baltimore region. Smaller local government entities, such as schools and community colleges, realized substantial cost savings by being part of the purchase pool with larger consumers, such as Baltimore City.

The procurement sought from competitive suppliers their best rate  in cents per kilowatt-hour. Their bid rate was then compared with the current "price freeze service" rate.

Washington Gas was awarded contracts for 57 large accounts, totaling $16 million. These accounts will realize savings of $531,000 compared with the current "price freeze service" rate. The "price freeze service" rate expires in July for these accounts, which would then be subject to the market rate.

Pepco was selected to serve 174 smaller accounts for $5 million. These accounts will save nearly half-a-million dollars compared with the "price freeze rate," which remains available until 2004.

Bids were opened on December 6 and were evaluated by the consultant and BRCPC members. Pool members had 14 days in which to respond to the winning bid with a signed contract.

Pool members included the cities of Aberdeen and Annapolis; Anne Arundel, Baltimore, Carroll, Harford and Howard counties, Baltimore City; community colleges in Anne Arundel, Baltimore, Harford and Howard counties; public schools in Baltimore City and Baltimore, Carroll, Harford and Howard counties; Baltimore County Libraries and Baltimore County Revenue Authority.

Cooperative purchasing stretches taxpayer dollars in two ways. Local governments benefit from economy of scale by combining their procurement needs, and also save the costs that would be incurred in administering separate bids.

Posted: January 24, 2002