MOUNT VERNON — Two energy companies are in a competition to supply the Knox County Water and Wastewater Department with its electrical energy, with county commissioners informed that the real winner will be the county — on future energy savings. If the new energy agreement proves advantageous starting next in February and covering 15 months, it could be expanded to provide energy for other county entities.
Commissioners received a report Tuesday from Bob Snavely, an account manager with Palmer Energy Company of Toledo, which is acting as consultant to the County Commissioners Association of Ohio (CCAO) on energy issues. Palmer and the CCAO recently issued a Request for Proposal (RFP) to eight companies for electric energy. The RFPs specifically were to quote their energy costs for the county’s water and sewer accounts after County Administrator Jason Booth determined that an opportunity existed for cost savings.
The county received pricing from five firms: FreePoint Energy Solutions, FirstEnergy Solutions, Constellation, AEP Energy, MidAmerican and Dynegy. AEP is the current supplier. Energy costs fluctuate on a daily basis. During the RFP period, the lowest prices offered for a 15-month term came from Freepoint, at $0.04866 per kilowatt hour, and FirstEnergy Solutions, at $0.04892 per kilowatt hour. Based on their rates, Freepoint and FirstEnergy would save the county’s water and wastewater accounts $9,700 and $9,100, respectively, compared to last year’s energy costs. The rates were given in late December.
The approximately 20 electric accounts for county water and wastewater include energy use for the wastewater plant, sewer pumping stations in Apple Valley, water well fields and a small wastewater plant in Bladensburg. Each account has its own separate meter. The county’s water and wastewater department uses 2.2 million kilowatt hours of electricity annually, which is the equivalent of 220 households. All county entities combined use more than twice that amount of electricity. The average household uses 10,000 kilowatt hours annually, Snavely said.
Commissioners voted to allow the CCAO and Palmer Energy to seek a locked-in rate from the two lowest-price suppliers, Freepoint Energy Solutions and FirstEnergy Solutions. Once the winning price is offered, the county’s 15-month term with the new company would begin in March, following the reading of meters in February.
“We’ll refresh pricing with the top two (firms),” Snavely told commissioners Thom Collier and Teresa Bemiller. “We want them to compete until the end.”
The stakes are potentially high for the winning firm supplying electrical energy for water and wastewater operations. That is because the 15-month agreement with the winning firm would coincide with May 2020.
“May 2020 is when all other electrical agreements for Knox County are set to expire, which would keep these accounts on the same renewal cycle for future RFP and contracting opportunities,” Snavely wrote in his report. Should more county entities use the same energy supplier, rates will benefit from combined purchasing power, he informed commissioners. Freepoint Energy Solutions already supplies some county entities with electricity needs.
“The electric market is constantly moving and suppliers only hold the price for one day,” he said.
There is an issue involving First Energy Solutions, Snavely wrote in his report. “… as you have likely heard or seen in the news, FirstEnergy Solutions filed for bankruptcy in 2018, which created financial uncertainties in the industry as well as for current and potential supply customers. Based upon recent reports and bankruptcy court approval, FES is in negotiations to sell its retail marketing arm to Constellation (Excelon).”
His report continued, “Current reports have noted delays in the process and it is unknown at this time when or if the sale will take place. As it stands today, FES is able to sign contracts under the FES brand and FES terms and conditions, and whether or not the sale is approved, the terms and conditions of the contract are expected to be enforced.”