New Haven Independent

Last fiscal year, the city spent a whopping $8 million on electricity and $3 million on gas. The city currently buys its energy from United Illuminated at a cost of about 11 cents per kilowatt-hour. Consultants think the city can do better, standing to save a lot of money by locking into lower prices.

Concerned that costs would escalate in the future, the city has hired Source One, Inc. to go out to market and seize competitive bids.

According to a city press release, the new rate wouldn’t take effect until Jan. 1, 2007, when electricity deregulation will enable the city to purchase electricity from the market. Consultants originally planned to wait until then. But, citing present low rates, “they have found that the next few weeks offer an ideal time to procure.”

Citing urgency, Pietrosimone passed the proposal through on an expedited track via unanimous consent. The bid-chase will be overseen by a new Energy Procurement Committee consisting of the city controller or designee, city purchasing agent, city engineer, superintendent of schools or designee and two appointed members of the Board of Aldermen.

Before the proposal passed, Hill Alderman Jorge Perez threw in an amendement setting a “sunset clause” on the bid-procuring effort. The amended bill, passed unanimously, gives the consultants only 60 days to lock into their lower rates. If they can’t find a better deal in 60 days, they have to come back to the aldermen.

Perez said when consultants briefed the board, they didn’t make a guarantee they could lock into a competitive rate for five whole years. Depending on the whimsical movements of the energy market, that time period could be much shorter.

Responding to Perez’ proposal, Aldermanic President Carl Goldfield said: “What you heard tonight is nervousness that if the market turns against us, it could be very bad.” But “depending on where prices go, we stand a chance to save big bucks.”

Goldfield said he’d made sure that no self-interested party will stand to gain from the consulting process. The companies involved will be “completely independent,” and do not stand to make a commission on any multi-year contract with the city, he said.