OCEAN CITY — With a proactive move this week, resort officials turned a potential hike in an electricity supply contract into a savings.
City Engineer Terry McGean this week told the Mayor and Council changes in state law requiring electricity suppliers to increase the percentage of renewable energy in their portfolios could result in a significant increase in the town’s electricity supply in the next contract cycle. The Clean Energy Jobs Act passed by the General Assembly this year will require electricity suppliers to increase the percentage of renewable energy in their portfolios from the current 25 percent to 50 percent by 2030.
McGean said the change could result in an increase in the cost of the town’s electric supply contract. However, because Ocean City recently entered into 20-year contract with a vast solar energy provider in northern Worcester County, along with other energy efficient measures, the town already exceeds the state’s clean energy goals.
“The impact of this on our town government could be $50,000 a year, or $150,000 for the life of the three-year contract,” he said. “With our solar agreement, we already have more than 50% of our power supply from renewable sources.”
Ocean City’s current electric supply contract is locked in at a rate of 5.37 cents per kilowatt hour and the contract runs for three years through 2022. However, because of the change in state law, and also because the electric supply market is favorable for consumers at the moment, McGean told the Mayor and Council he and his staff along with the town’s energy consultant took the proactive move to put the town’s electric supply contract out to auction.
That auction took place on Tuesday morning just before the afternoon work session and met with favorable results. McGean said the town received 21 bids for its electric supply contract from 17 different vendors and secured a low bid from Constellation Energy of 5.18 cents per kilowatt hour.
As a result, what appeared at first to be a roughly $50,000 per year increase in the electric supply contract, or $150,000, over the life of the deal, the new contract would actually represent a savings of about $31,000 a year, or $93,000 over the life of the new three-year contract. As a bonus, the town actually gained more renewable energy in its overall portfolio.
“I am happy to report the low bid is actually less than the current contract,” said McGean. “It represents a savings of $94,000, and we will gain an additional 10% on our energy credit.”
The council unanimously approved the new electric supply contract with Constellation Energy.
