FREEHOLD – The Monmouth County Board of Chosen Freeholders has adopted a resolution accepting a bid by Pepco Energy Services Inc. of Delaware to supply electricity to all county owned buildings including Brookdale Community College in Lincroft.

 

Monmouth County’s Purchasing Director, Gerri C. Popkin, said the online method of buying electricity worked in the county’s favor.

 

“Four reverse auctions were held simultaneously involving both large and small accounts to solicit prices for both 12- and 24-month periods,” Popkin said. “We received favorable pricing from Pepco for both types of accounts, so we recommended that the Board lock in prices for a two-year period.”

 

“Taken together, the savings to Monmouth County over that time will amount to $2.9 million when factoring in estimated costs for electricity in 2010 and comparing the bid amount with the current market price that the county would have paid had it not competed for the best price,” Popkin added. “These savings would not have been realized had we not conducted the reverse online auctions.”

 

The fact that the county has a AAA bond rating – Monmouth County is one of only 21 counties in the United States to have such an excellent bond rating – also helped lower the electricity bids. “The AAA bond rating has given the suppliers the comfort level they needed to come in with lower pricing,” said Freeholder Robert D. Clifton, who oversees the county’s Finance and Purchasing departments. “Once again, the county’s AAA bond rating is helping save taxpayer dollars.”

 

 The reverse online auction was held June 25 and drew interest from three major electricity suppliers. Pepco was the low bidder at $0.09500 per kilowatt hour.  Factoring in the $2.9 million in savings, the estimated cost for electric supply for the next two years is $8.1 million.  

 

Last year, the county used a similar reverse online auction to purchase natural gas, which was very successful. “The ability to do online reverse auctioning for certain commodities gets you faster locked-in rates and is much more competitive than a sealed bid,” Popkin said.

 

With electric rates going up this summer for so-called high-end commercial users, the county locked in its rate at just the right time. “This contract begins Aug. 1,” Clifton said. “Had we not been aggressive and shopped for electricity, we would have been paying more, not less. We’re very proud that we were able to save nearly $3 million over the course of this two-year contract.”

 

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