Delaware Signs Retail Electricity Agreements

Delaware Governor Ruth Ann Minner continued her commitment to driving down energy costs in state facilities by announcing three-year agreements with Pepco Energy Services, Constellation New Energy, and Amerada Hess to provide retail electricity to selected state, county, and local facilities and school districts in the state.

The agreements will provide electricity at an average rate of $0.0815 per kWh.—a reduction of 11.2 percent from the current year’s contract rates. In total, these agreements represent a savings of $8.2 million over three years for the state and its aggregation partners.

“Last year, we successfully enacted legislation that provided both short- term and long-term solutions for energy costs,” Minner said.

“Because of the Governor’s vision and the General Assembly’s support, the state was able to aggregate energy usage and purchase electricity on the open market which resulted in favorable pricing for us and our partners,” said Jennifer
Davis, Director of the Office of Management and Budget.

The state’s partners for the energy bid included the school districts, volunteer fire companies, the City of Wilmington, Kent County, Sussex County, the University of Delaware, and Delaware Technical & Community College.

The procurement of electricity through the three contracts includes provisions for a portion of this energy to be provided through green sources. The contracts call for an initial set-aside of 5 percent of power to come from green sources for FY2008, increasing to 6 percent by the third year of the contract.

The state worked in conjunction with World Energy Exchange provided by World Energy Solutions.
In other energy news, the State of New Jersey was pleased with the results of its recent online energy auctions.
With five bidders submitting a total of 169 bids across 24 auctions, the state was able to obtain a price 1.2 percent lower than its existing contract prices. The three winning bidders—Pepco Energy Services, Constellation New Energy, and Hess Corp.—will supply over 581 million kWhs per year at an average price of $0.099472 per kWh.

Awarded contracts include a blend of fixed and block & index pricing to provide portfolio diversity and to take advantage of significant off-peak consumption. The auction results garnered cost avoidance savings of more than $2 million on electricity costs as compared to the state’s existing contracts. The new contracts will provide price stability for state accounts over the next 36 months and fixes the new capacity charges taking effect throughout the 13-state PJM regional transmission organization.

“Pricing came in lower than expected considering the recent rise in capacity prices,” said John Rhodes, New Jersey’s Director of Energy Savings. “We saw a flurry of bidding activity in the final moments of the auctions, with major suppliers actively bidding against each other, giving us the best price the market can offer.”