MIDDLETOWN, NJ – Middletown stands to save approximately $160,000 in energy costs by purchasing natural gas and electricity as part of a collective of 119 government entities known as the New Jersey Sustainable Energy Joint Meeting (NJSEM).
Thanks to a successful on-line reverse auction, the NJSEM secured an 11-month fixed-price contract for the bulk purchase of electric with Hess Corporation, Woodbridge. An reverse auction is a type of auction in which sellers compete to obtain business, and prices typically decrease over time. Middletown expects to save about $125,000 or 11 percent per year by participating in the joint agreement instead of paying local utility company rates.
“Energy costs are necessary expenses in the budget that offer great potential for savings,” said Mayor Gerry Scharfenberger. “The purchase of natural gas and electricity through this program is an excellent example of the township commitment to find new ways to save taxpayer dollars without impacting services or the safety of residents.”
The NJSEM is first public aggregation group to successfully bid street lighting electric consumption, a major component of a public entity’s electric bill. Since 1999 electric customers in NJ have had the option of switching to non-utility suppliers for their Basic Generation Service, or BGS. Until this year, the economics of fixed price customers buying from third party suppliers provided no financial gain to the customer, according to the NJSEM.
Another successful on-line reverse auction conducted by NJSEM in February resulted in a 12-month fixed price contract for natural gas with Woodruff Energy, Bridgeton. Middletown expects to save approximately $35,000 or 14 percent per year by participating in the joint agreement instead of paying local utility company rates.
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The NJSEM was established earlier this year with the goal of pooling the resources of a large group of municipal organizations in order to collectively purchase natural gas and electricity at rates lower than those provided by the utility. To date end results have been price stability for all NJSEM members through a competitive on-line bid process, and the opportunity to realize saving for all members.