Mass. looks to save with bulk energy purchasing system

Massachusetts Governor Deval Patrick has unveiled a series of energy management solutions for the state, designed to cut costs and reduce waste. Commonwealth Energy Solutions (CES), aims to be a comprehensive energy procurement and management system open to all public entities, including cities and towns. The initiative creates a new bulk energy purchasing system with the goal of consolidating fiscal management.

Currently, the state has no single authority charged with managing energy costs for public agencies. As a result, there are now over 15,000 electric, natural gas, and heating oil accounts in the executive branch alone, with total spending of roughly $120 million per year. Additional costs come from municipalities, higher education and quasi-public agencies bringing the total cost to approximately $750 million annually.

The Governors initiative plans to bring all energy-related functions under the umbrella of CES, in a similar fashion to other specialized management authorities like the Pension Reserve Investment Management Board or Group Insurance Commission.

According to the state’s Administration and Finance (A&F) Secretary Jay Gonzalez, the plan is expected to cut costs. “This energy reform proposal will allow us to take advantage of our collective public purchasing power to generate real savings for taxpayers.”

The plan has the full participation of all cities and towns in the state and claims that it will reduce executive branch energy spending by 5 percent, or approximately $6 million. The Governor’s FY11 budget reflects the new initiative and consolidates the energy budget across agencies and will give municipalities the option to procure energy resources under state contracts.

The Administration is also using some of its American Recovery and Reinvestment Act (ARRA) funds to deploy an advanced energy management system for state agencies, that will provide real-time monitoring of energy use and trends. As well as $67 million of $185 million in ARRA State Revolving Fund monies for energy efficiency improvements and renewable energy installations in drinking water and wastewater treatment facilities, which make up 30 percent of municipal energy budgets.

“Putting Massachusetts on a smarter energy budget is one of the ways we’re working to make state government more cost-effective and responsive to the citizens of the Commonwealth,” the Governor said in a press release Tuesday.

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