Morristown on Tuesday used an online auction system similar to eBay to land an energy deal projected to shave $250,000 from the town’s electricity bill over the next two years.
And half of that electricity will come from wind, solar or nuclear sources, not from dirty fossil fuels, according to Mayor Tim Dougherty.
“This a testament to our commitment to make this a better place to live, and to do our part to make the world a better, cleaner, healthier place,” the Mayor told the town council, which voted 6-0 to approve the deal. (Councilman Anthony Cattano Jr., recuperating from surgery, was absent)
Reliant Energy Northeast LLC of Houston outbid five other energy companies during a timed, one-hour auction on Tuesday morning. The companies bid on several scenarios submitted by the town, including contracts for different time spans with power generated by various combinations of conventional (brown) and renewable (green) sources. Auction rules gave the council 24 hours to lock in the quoted price.
The pact covers all electricity used by the town government.
“This is really cutting-edge technology,” said Michael FitzPatrick, a consultant from GreenFlexEnergy in New Vernon who guided Morristown through the auction process. Although the energy industry was deregulated in 1999, reverse online bidding–pitting bidders against each other in real time–only became available within the last year, he said.
The consultant worked closely with Paul Miller, coordinator of Morristown’s Office of Sustainability. Morristown could have saved an additional $17,000 by opting for more brown energy. But the environmental benefits of going green outweighed those small savings, Paul said.
These sorts of deals usually impose penalties if the customer goes above or below the contracted energy usage, according to Paul. Michael FitzPatrick said he got those stipulations removed from the contract.
“We won’t be penalized if we go over or under,” Paul said.
Electric bills are divided into two parts: Supply, and delivery. Morristown’s electricity will continue being delivered by Jersey Central Power & Light. Reliant Energy, unencumbered by the infrastructure costs and customer commitments of giant utilities such as JCP&L, can supply electricity more cheaply by buying it on the spot market, Michael FitzPatrick explained. JCP&L, on the other hand, is supplying some of its electricity based on higher prices it negotiated years ago with power generators.
The consultant was hired by Morristown last July. He will be paid by the power company, not by taxpayers, said Mayor Dougherty.
Although many towns, including neighboring Morris Townsip, have begun buying energy through online auctions, few have realized such dramatic environmental results, according to Michael FitzPatrick.
By 2020, the state will require all towns to derive at least 20 percent of their power from renewable sources. Morristown already will have satisfied that goal, and then some, this year, said the Mayor.
In another energy-related matter, the Mayor knocked JCP&L for not restoring more than 140 street lights that have gone dark around town. Asserting that last summer’s Tropical Storm Irene and the October snowstorm exposed personnel shortages at the utility, the Mayor said JCP&L should hire local contractors to restore the street lighting.
LIVEBLOG REPLAY FROM COUNCIL MEETING
Wow – way to go Paul