Metropolitan council fuels strategy for conserving electricity funds

Pooling of purchasing strength will allow direct buy from providers

Metro

News from around the Baltimore region

June 08, 2005|By William Wan | William Wan,SUN STAFF

Baltimore's mayor and representatives of the five metropolitan counties announced yesterday a new strategy for buying electricity that the officials hope will save millions of dollars for the local governments.

Meeting as the Baltimore Metropolitan Council, the elected executives approved a plan to collectively buy energy more directly from electricity providers.

"It's an innovative approach and a demonstration of our collective strength when applied to joint programs," said Baltimore County Executive James T. Smith Jr., chairman of the metro council.

The council also includes the Anne Arundel, Harford and Howard county executives, and Carroll County Commissioner Julia Walsh Gouge.

The group has bought electricity cooperatively for the past five years, since deregulation of the Maryland power market began. By pooling purchasing strength, the group has saved several million dollars already in electricity contracts for local governments, council officials said.

But Smith said council members believe they can squeeze out even more savings by cutting out the "middlemen" - companies that sell electricity at retail prices.

"It's something you see the private sector doing all the time," he said

Yesterday, the leaders at the meeting voted to hire South River Consulting to help them solicit proposals from Maryland's 14 licensed power suppliers. The consultant will cost $12,500 per month or $150,000 annually, and the cost will be divided among the six jurisdictions.

The council projected its members would save $500,000 in the first year of the program. Some of the local governments that could benefit from the new strategy are still under contract with separate providers.

Once those contracts are phased out, the city and five counties could eventually save up to $13 million a year combined on electricity costs, Smith said.

That is money sorely needed for other programs, other council members said.

"We know we have to do something to contain the costs," said Anne Arundel County Executive Janet S. Owens.

If successful, the council could apply the same strategy in the future to other purchases such as gasoline, said Howard County Executive James N. Robey.

"All of us have police departments, fire departments. If we can do this for electricity, we can do it for other things," he said.

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