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Hillsborough Could Save $6,200 in Utilities Over Next Two Years

Rates may be locked in today to save more than $6,000 in electrical service costs.

The township could save as much as $6,200 on utility costs over the next two years, after the Township Committee greenlighted a proposal by Commercial Utility Consultants to supply electrical power for the municipality.

Company representative Ryan Carr said with the township's vote at Tuesday's meeting, the company would auction the township's electrical supply needs to the lowest bidder from among electrical providers authorized to provide service by the New Jersey Board of Public Utilities.

Much like residential service deregulation allowing homeowners to choose their power and gas suppliers—which is provided through PSE&G or Jersey Central Power and Light lines—the township can seek lower rates.

Carr said his company, which started in 1975 to analyze consumption by large commercial users to identify overcharges or ways to cut costs, uses a system of bidding by providers to identify lowest cost sources. 

Carr said the savings estimate was based on rates his company received in a request for proposal sent to the suppliers. To maximize the potential savings for Hillsborough, he said separate RFPs were issued for street light power—which has relatively fixed consumption—and metered power at buildings, which is priced higher because of fluctuations and more peak time usage.

Based on the rates returned by Constellation Energy, a division of PSE&G's parent Excelon, for the street light electricity, and New York-based Hudson Power for the metered service, the township would save an estimated $2,600 per year, or $6,200 over a 24-month contract, on the township's approximately $160,000 annual electrical bill.

"We feel in this market, that's a pretty significant savings," Carr said.

Carr added the Commercial Utility Consultants adds a 0.2-cent per kilowatt hour fee to the rates as it's "finder's fee."

With the committee's vote, the company will issue new requests for bids Wednesday, with rates expected to be returned by 4 p.m. this afternoon.

Upon township approval, the company will lock in the rates for 24 months for the township. If the rates aren't low enough, Carr said the township is not obligated to accept the rates.
 
  
Ron Michaels August 28, 2013 at 03:20 PM
Couple of things: 1. The estimated savings of $2,600 a year (12 months a year, right?) for 24 months or TWO years is $5,200, not $6,200. 2. Is the Township's estimated savings net of the "finder's fee" of 0.2 cents per kilowatt hour, or does it come out of such estimated savings? 3. What is the Township's estimated kilowatt hour usage? In other words, what does Commercial Utility Consultants estimate the finders fee to be in dollars, not per kilowatt hour? Thanks :)
John Patten (Editor) August 28, 2013 at 03:24 PM
The estimated savings is different for two years because of a lower rate the provider will commit to for a longer contract, and does include the fees charged by Commercial Utility Consultants. The discussion did not include an estimated total of kW hours, only the total bill—we'll see if we can pin down the estimated usage.
Ron Michaels August 28, 2013 at 04:12 PM
Thanks for clearing those things up. It's much appreciated! :D

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