Joint Procurement of Electric Power To Save More Than $2.2 Million in Costs

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Contact: Donna Bigler (Public Information), 240-777-6537
Paul Tseng (Facilities & Services), 240-777-6071
Anne Elsen (Environmental Protection), 240-777-7754

For Immediate Release: November 2, 2000

Joint Procurement of Electric Power To
Save More Than $2.2 Million in Costs

During the next year and a half, Montgomery County and a group of five County and bi-County agencies and 10 municipalities will save more than $2.2 million in electricity costs, thanks to a joint procurement of electric power. These savings, achieved through volume purchasing, come in addition to those realized by the recent electric industry deregulation in Maryland.

"We have long known in local government that joint procurements result in significant cost savings, and I am pleased that this particular contract will benefit so many agencies and municipalities," said Montgomery County Executive Douglas M. Duncan. "I'm pleased that we've strengthened our purchasing power, and that we're getting the electric power services we need at extremely competitive rates."

The contract was awarded on October 20 to Washington Gas Energy Services, Inc. (WGES) of Herndon, Virginia, to supply electricity and related services to County and bi-County agencies and municipalities during an 18-month period.

The contract award is the culmination of a two-year joint procurement effort in which County and bi-County agencies cooperated to investigate, develop and issue a solicitation for competitive electricity supply. In working together, the agencies were able to take full advantage of changes to the electric power industry, resulting from deregulation. Pooling resources to buy a large block of electric power achieved price reductions, and ten municipal agencies have joined the procurement to benefit from the cost savings.

According to Montgomery County's energy consultant, Mondre Energy, Inc., the savings achieved by the agencies through the competitive supply contract with WGES are considerable, especially in light of the currently tight market conditions and high wholesale costs for electricity supply, both in the mid-Atlantic states and throughout the country.

The agencies involved in the procurement are Montgomery County government, Montgomery County Public Schools, Montgomery College, Montgomery County Housing Opportunities Commission, Washington Suburban Sanitary Commission, and the Maryland-National Capital Park and Planning Commission. The municipalities that joined in the procurement are Chevy Chase Village, Chevy Chase Village Section 5, City of Gaithersburg, City of Rockville, Rockville Housing Enterprises, City of Takoma Park, Town of Kensington, Town of Laytonsville, Town of Glen Echo and Town of Somerset.

Environmental issues were among the criteria considered during the procurement process and suppliers were pre-screened based on their ability to provide at least three percent of their electricity from clean and renewable energy sources. WGES had the most environmentally preferable fuel mix of all the companies that submitted bids.

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