News - Archive
DRPA Completes Reverse Auction for Electricity
Four new contracts could save $1.33 million a year
The Delaware River Port Authority this week completed a reverse auction for electrical power that could save the bi-state transportation agency more than $1.33 million a year.
The reverse auction – in which qualified bidders assemble and compete to sell a good or service to a potential customer at the lowest price – resulted in contracts with four energy suppliers: South Jersey Energy of Folsom, N.J.; Integrys Energy Group of Chicago; the Hess Corporation of New York; and Reliant Energy of Houston.
“Given our best assessment of current energy pricing trends – and our relatively consistent organizational demand – these four contracts are likely to save us at least $1.33 million a year,” said DRPA Contract Administration Manager Howard Korsen. “We’re confident this will prove to be a great deal for our toll payers.”
The contracts lock in prices on DRPA energy purchases for terms ranging from 23 to 35 months. The DRPA will be paying a median price of approximately 6.8 cents per kilowatt-hour. Last year, the DRPA consumed 63 million kilowatt-hours of electricity.
Since March 2011, the DRPA had been purchasing electricity on the spot market. In 2010, the DRPA spent approximately $7.6 million on the procurement and distribution of electricity. Last year, it spent about $7.2 million.
“With a weak economy and falling electricity prices, it made sense to buy power on the spot market,” said PATCO Project Manager Philip Spinelli. “But today, prices for electricity are at record low levels, and we anticipate increases. These contracts will give us pricing stability during what could become a volatile time.”
The reverse auction, which pitted nine pre-qualified electricity suppliers head-to-head, was hosted on May 22 by energy consultant Dome-Tech, Inc. at the DRPA offices in Camden, N.J.
The Delaware River Port Authority is a regional transportation agency that connects millions of people and businesses in Pennsylvania and New Jersey. The DRPA owns and operates the PATCO commuter rail line and the Benjamin Franklin, Walt Whitman, Commodore Barry and Betsy Ross toll bridges. The DRPA also owns the RiverLink Ferry.
[ Return to List ]