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Sold! City officials hope to save costs with energy auction

By Sue Botos

Rocky River

Most people use online auction sites such as eBay and Amazon.com to find a good deal or maybe to make extra cash by selling stuff that has been gathering dust for years. But not many would surf these sites looking for a way to cut energy costs.

However, this is approximately what city officials did recently by participating in an “energy auction” in an effort to reduce fuel costs. These events are becoming a popular alternative for communities looking to cut fuel bills.

During the July 15 City Council committee session, Mayor Pam Bobst announced that the city held an online auction facilitated by World Energy Solutions. The energy management services firm headquartered in Worcester, Mass., with an office in Dublin, Ohio, assists municipalities and businesses in finding the best possible oil and natural gas prices. Bobst said the auction was at no cost to the city, and that World Energy’s commission will be paid by the successful bidder, which turned out to be Direct Energy Ohio.

“The 43 bids show the desirability of Rocky River’s energy accounts,” Bobst stated. She said that the process lasted about 30 minutes, and drew bidders vying for the city’s 12 energy accounts. This was the first time that the city participated in an energy auction, according to Bobst, who added that officials were not obligated to accept any of the proposed bids. She credited finance Director Mike Thomas, who has successfully negotiated utility contracts in the past, with facilitating the idea of the auction.

Bobst reported that the inspiration for the auction came about due to a rise in the city’s energy rates over the past few months, which ranged from about $.045 to almost $.05 per kilowatt hour (kwh). The benchmark rate set by the market, according to Bobst, is $.053 for a 24-month contract. Direct Energy’s successful bid was for $.05049 per kwh for a two-year agreement.

“There may be opportunities to go back and do another auction for back-to-back contracts,” Bobst stated.

An energy audit conducted in 2011 revealed that the city has an annual usage of about 9.5 million kwh. “This is being monitored closely,” Bobst said. She told West Life that after the audit, detailed lists of recommendations were distributed to the respective buildings and directors who have taken action. For example, a full grant was obtained for the City Hall generator, which was most recently put to the test after a downed tree knocked out power to the area.

Retrofitting of heat and lighting fixtures at the Hamilton Ice Area were also done to further trim costs, and due to an arrangement with the manufacturer, the city was reimbursed for its cost. Bobst added that similar improvements have been made at the civic center and the Rocky River Municipal Court.

“We hope that our usage figure will be further reduced,” Bobst commented.

 

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