December 2000

Local Governments Save Money on Electricity

After reviewing bids from two suppliers, the Baltimore Regional Cooperative Purchasing Committee (BRCPC) recommended that 447 local government electricity accounts switch from their present suppliers to First Energy Services Corporation of Toledo, Ohio. Those accounts are projected to save more than $1.3 million over the 16-month life of the contract period specified in the bid. The accounts are located mostly in the BGE service area, with a few in the Conectiv Energy Supply, Inc., and Allegheny Energy Supply Company, LLC, territories.

The BRCPC, a standing committee of the Baltimore Metropolitan Council, began investigating the value of a collective purchase of electricity supply in 1999. Baltimore City volunteered to serve as the lead agency in this endeavor, and provided consultants to help prepare the bid proposal, as well as the contract which is being used by all participants. The BRCPC agreed to open the purchasing pool to all local government entities in the Baltimore region.

"Baltimore City is to be commended for initiating this joint energy purchase, and inviting other local government agencies to participate," said Baltimore County Executive C.A. Dutch Ruppersberger, who serves as BMC Chair. "Smaller local government institutions, such as local school systems, will realize substantial cost savings by being part of the purchase pool with much larger consumers, such as Baltimore City."

The procurement sought from competitive suppliers their best rate in terms of cents per kilowatt-hour. Bids were opened on October 11, and evaluated by a committee of the largest members of the purchase pool. The rate proposed by each bidder was then compared with the rate currently being paid by each account. The procurement was structured with a "no-losers" clause. Only the accounts that saved money switched to the new supplier. Delivery of electricity under the new contracts commenced in November.

"This agreement just goes to show that whether it's with electricity, in Annapolis or in Washington, when we work together, we have power. This is the beginning of what we hope will be a long line of regional cooperative efforts," said Mayor Martin O'Malley.

Pool members included: Anne Arundel, Baltimore, Carroll, Harford and Howard counties; Baltimore City; cities of Aberdeen , Annapolis and Havre de Grace; towns of Bel Air and Hampstead; community colleges in Anne Arundel, Baltimore, Harford and Howard counties; public schools in Baltimore City and Baltimore, Carroll, Harford and Howard counties; and the Baltimore County Libraries and Baltimore County Revenue Authority.

"The joint purchase of electricity is the most ambitious project ever taken on by the Baltimore Regional Cooperative Purchasing Committee," said Paul Farragut, Executive Director of the Baltimore Metropolitan Council. "This is a model of how taxpayers benefit when local government agencies of all sizes from all the jurisdictions in our region work cooperatively."