REVERSE AUCTION LEADS TO LOWER NATURAL GAS PRICE

Ocean County government will see lower natural gas bills for more than 80 of its government buildings as the result of a successful reverse auction.

“We had four different companies that aggressively bid for our natural gas business,” said Ocean County Freeholder Director Joseph H. Vicari, who oversees the county’s energy policies. “The competition resulted in the county locking into a price of .898 cents per unit of natural gas for 12 months.

“This price is 33 cents less than what we currently pay and is also about 24 cents less than what New Jersey Natural Gas would have charged,” he said.

With four bidders, the lowest bid was from Woodruff Energy at .898 cents per unit or dekatherm of natural gas. The county uses about 101,000 dekatherms of natural gas annually.

Vicari noted that consumers and the county benefit from deregulation which allows the purchase of an energy supply from an Energy Services Company of their choice.

“Since deregulation, the utility company is no longer the only option,” Vicari said. “Deregulation has increased competition and we can benefit from the competitive prices.”

The online bidding is termed a reverse auction because the county is seeking the lowest price, while during a traditional auction individuals or companies are generally looking to garner the highest price. The reverse auction was overseen by the county’s energy consultant, T&M Associates.

The new contract, which goes into effect in July, will cover the cost of providing natural gas to the county library branches, parks facilities, garages, fire and first aid training center, the police academy and all county facilities that use natural gas.

“Our affiliate agencies including the Board of Social Services and the Board of Health will also use this contract,” Vicari said. “With more than 84 county facilities using natural gas, it’s imperative the County does all it can to secure the best price.”

The first time Ocean County tapped into a reverse online auction for natural gas was August 2008.

“The competition pushes the rates down and that has been a financial benefit for Ocean County,” Vicari said.

The county also participates in a reverse auction for electric rates.

Vicari noted seeking competitive bids for utilities is part of the county’s energy master plan.

“There are a number of steps to the plan that will help the County save money and will provide greater efficiencies as we implement energy upgrades to help us run our facilities,” Vicari said.