OCEAN CITY — With an unexpected windfall from proposed bids for the electric power contract renewal, resort officials this week decided to go a little beyond the recommended low bid to gain even more percentage points in the town’s green energy portfolio.
During Tuesday’s Mayor and Council work session, City Engineer Terry McGean presented the bids for the purchase of the town’s electric energy contract. The bids covered a wide range of terms including price per kilowatt hour, length of the contract and percentage of the power provided that is derived from green energy sources.
McGean told the Mayor and Council whatever option they chose represented a significant savings over the town’s current electric power contract, which is set to expire next July. McGean said the average of the various bids represented a full penny reduction from the current contract, or from just over six cents per kilowatt hour to just over five cents. He said each penny reduced from the cost represented a savings of around $186,000.
“Based on the bid results, there are very good numbers,” he said. “I was skeptical, but I’m encouraged. When we looked at the numbers, we got very lucky. It’s fantastic. The prudent thing to do is lock into 36 months at this rate.”
While the town would save roughly $186,000 by opting for McGean’s recommendation to conventional electric power, some on the council suggested selecting the slightly higher option to provide 10 percent of the energy from green energy resources. Ocean City currently derives about 25 percent of its total electric energy consumption from green energy sources and that number is expected to double when the new solar panel farm at Routes 50 and 90 soon comes on line, bringing the town’s total to 50 percent.
McGean explained the state currently requires 10 percent of municipal electric energy to come from green sources and Ocean City is already above the state standard.
“Given what we have already, we’re doing far more than what the state requires,” he said. “With the solar contract, we’re already at twice what the state requires. Having 50 percent of portfolio in green energy probably puts us in the highest percentile.”
However, Councilman John Gehrig pointed out opting for the contract that included 10 percent more from green energy resources, the town could improve its green energy portfolio and add another feather in its cap in the ongoing battle over offshore wind energy. Choosing the other contract would add about $15,000 annually during the three-year contract, or around another $45,000, but Gehrig pointed out it might be a small price to pay to show the town is serious about improving its green energy usage.
“Especially with the fight we have, every percentage point we add to our green energy portfolio improves our narrative,” he said. “I think by taking advantage of this good news, we can tack on that 10 percent. What we’re going through right now, we can push and push to get that percentage higher. We can show people who come here we’re doing everything we can to get to 100 percent.”
However, Councilman Wayne Hartman pointed out the town already far exceeds most jurisdictions in terms of green energy and couldn’t justify spending the $15,000 per year.
“I can’t support paying $15,000 more per year to gain another 10 percent when we’re already way ahead of what most are doing,” he said. “At $15,000 per year, that’s $45,000 per year over the life of the contract, and I feel like that’s not good use of taxpayer money.”
Councilman Matt James agreed saying he also could not support spending $45,000 over the life of the three-year contract for what is essentially a symbolic measure.
“I couldn’t support wasting $45,000 for a feel-good measure when we’re already doing way more than the norm. I feel good about being at 50 percent already,” James said.
Mayor Rick Meehan said spending the additional money could show residents and visitors the town is serious about improving its green energy portfolio.
“It shows where Ocean City is going and what our goals are,” he said. “We can show through initiatives such as this that we’re taking advantage of opportunities to achieve those goals. I would support going in that direction.”
Hartman said spending the additional $45,000 to gain another 10 percent wasn’t prudent.
“Look back and see how we’re leading the pack in terms of other municipalities with twice the requirement of the state,” he said. “Just because we’re saving money doesn’t mean we need to throw away $45,000 on a feel-good.”
Gehrig pointed out the proposed $45,000 did not represent an out-of-pocket expense for the town and its taxpayers, but merely lessened the windfall gained from the low bids somewhat.
“We woke up today paying this rate, and here it is at 2:30 in the afternoon and we’ve saved $186,000 without doing anything,” he said. “We’re not wasting money. It says ‘green’ right in our mission statement. This is the first time we have a choice. It’s not coming out of our pocket. We’ve already saved $186,000 no matter what we do.”
Councilman Dennis Dare pointed out Ocean City has been a leader in green energy and referenced the town’s successful trash-to-energy program. Ocean City years ago abandoned traditional curbside recycling in favor of the relatively new trash-to-energy program. With the program, the tons of trash collected in the resort is trucked to a facility in Pennsylvania where it is incinerated and converted into energy.
“As a resort that depends on nature, we’ve been pretty consistent about being green,” he said. “A number of years ago, we switched from traditional recycling to a highly successful trash-to-energy program. If we go with the green option, maybe that’s one less oil tanker that has to pass by our shore. That’s a little bit of a reach, but every little bit helps.”
Council Secretary Mary Knight said she could support opting for the higher contract if it meant gaining another 10 percent in green energy, not only for the obvious ecological benefit, but also from a public relations standpoint.
“I agree with going with the extra 10 percent,” she said. “I think that message is the key. I think it’s very key for the public to understand the positive message outweighs the cost.”
Hartman said the town has already taken expensive steps to improve its green energy percentages and questioned if there were any other initiatives still on the table to improve if further.
“We already spent $4 million on green initiatives to reduce our energy usage,” he said. “We also converted town facilities to LED lighting. To be at 50 percent is remarkable. Are there any other opportunities to improve that number further?”
McGean explained there were always opportunities including more conversions to LED lights, rooftop solar panels on town facilities and possibly even another off-site solar project. After considerable debate, the council voted 6-1, with Hartman opposed, to opt for the higher contract with the 10 percent green energy addition.
