It took only five minutes but saved Maryland state government more than $31 million.
Capitalizing on rate caps that expired in 2004, the Maryland Department of General Services and the University System of Maryland joined forces to purchase 1.4 billion kilowatt hours of electricity for $243 million.
The move will help the state save more than $31.4 million over a two-year period, according to a release from the Department of General Services.
“The state has scored a major success,” Gov. Robert Ehrlich said.
“This partnership between the Department of General Services and the University System of Maryland has produced significant savings that will help avoid costly rate increases.”
The General Services department and the Maryland university system purchased electricity for more than 4,300 state accounts in the Allegheny, BGE, Delmarva and PEPCO service territories.
But officials with Maryland Public Interest Research Group said the state benefited from combining 4,300 accounts into one contract that appeals to utility providers.Johanna Neumann, policy advocate for Maryland PIRG, said residential users should get the same opportunity.
“Why not allow the municipality of Baltimore to aggregate all the accounts for residents in the city?” she said.
The state participated in a “reserve” auction conducted on World Energy Solutions? online platform, which allows utility companies to bid on the contract with Maryland. The auction took about five minutes.
Thirteen contracts were awarded for a total of 1,479,405,395 kilowatt-hours. The contract terms are for 24 months or longer, beginning in January 2007 for Allegheny Power accounts, and later during 2007 for other utilities.
“The University System and [Department of General Services] partnership allowed us to maximize competition and drive down the cost of electricity,” said John Porcari, vice president for administrative affairs for the university system.
The contracts will serve Maryland institutions and agencies including state office buildings, Baltimore City Community College, the Maryland Department of Transportation, the Department of Public Safety and Correctional Services, the Maryland State Police, the District Court of Maryland and the Maryland Stadium Authority ? which operates M&T Bank Stadium and Oriole Park at Camden Yards.
Several nonprofits, including the Maryland Food Bank, will also benefit. Winning bidders were ConEdison Solutions of Wymomissing, Pa., Amerada Hess of New York, Pepco Energy Services of Arlington, Va., Reliant Energy of Houston, and Washington Gas Energy Services of Herndon, Va.
