Berlin Moves Ahead With Altering Energy-Buying Process
BERLIN – After hearing recommendations from the Berlin Utilities Commission (BUC) and Dwight Davis, finance executive for Booth and Associates Inc., the Berlin Mayor and Council took the next step in securing an energy contract for the town.
The current contract is due to expire within the year. The council voted unanimously to take three steps to prepare for finding electricity for next year.
According to Mayor Gee Williams, the energy market is more favorable this year than two years ago when the last contract was negotiated. He and the rest of the council are hoping to pursue the next contract more “aggressively” in the hopes of finding better deal for the town.
To do so, three motions were passed at the meeting. First, Berlin will submit an application to PJM, a wholesale energy supplier. Second, the town will determine its energy provider through a “reverse auction” where sellers attempt to underbid each other for the buyer’s business. Finally, the council decided to put forth a formal request to the power consulting firm, Customized Energy Solutions (CES), asking them to submit a proposal to the town outlining how much it would cost to have them perform consulting.
Work on the new energy plan began months ago when the BUC started to investigate Berlin’s next contract. Members looked to Easton, a town that has made dramatic changes to the way it handles electricity of late.
“We were very impressed with Easton,” said BUC Chairman Erik Quisgard.
Davis had similar feelings.
“Easton has been very successful,” he told the council. “They’ve built their experience up over ten years.”
However, being a drastically bigger municipality allows Easton some options Berlin doesn’t enjoy, such as a larger power plant and more employees.
One thing that both Quisgard and Davis suggested Berlin do that Easton has already done is join PJM, though in a less active roll.
As previously stated, PJM is a wholesale energy provider that allows members to purchase power directly instead of going through suppliers. PJM allows several options for members, including long- and short-term contracts, along with the ability to buy energy at a daily or hourly rate.
While Easton actively participates in PJM, Quisgard and Davis both pointed out that Berlin had neither the size nor the personnel to effectively take part in energy trading, a process that was compared to “playing the stock market.”
But the council was told that a basic membership in PJM would give the town leverage when negotiating with energy suppliers, as Berlin would always have a fallback.
While Davis and the BUC agreed on PJM, their opinions differed when it came to finding a primary supplier after the current contract expires. The BUC advised using a consulting firm, specifically CES, to help play the PJM market. They also advocated negotiating a new contract. Davis suggested using a different consulting firm, APPI World Energy, citing that, despite an increase in cost, they had more experience.
Davis also recommended having a reverse auction instead of searching for a standard contract. A motion was eventually proposed in favor of Davis’ argument for a reverse auction.
The council did seem optimistic about working with CES, at least as far as having it advise the town on matters relating to buying energy wholesale from PJM.
The council decided to ask CES to submit a proposal outlining what services they could render Berlin and the subsequent cost.