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Reverse Energy Auctions Save $6 Million

William Opalka

GSA 300Energy management services company World Energy Solutions helped the US General Services Administration (GSA), Region 2, procure over 285 million kWh of electricity – including more than 100 million kWh from renewable sources – for 52 federal accounts across New York. Savings are expected to reach $6 million.

The GSA and other agencies took part, including the Veterans Administration, US Bureau of Prisons, USDA, Department of Interior, and US Coast Guard.

Through a series of competitive online auctions run on the World Energy Exchange in March, GSA tested 28 different products and terms, receiving 255 bids from six qualified retail electricity suppliers in less than three hours. The average margin between the lowest and second lowest bids was $.00299 per kWh, representing over $850,000.

The online event resulted in the awarding of five new contracts for terms ranging from 12-36 months. The agencies participating in the auctions with GSA are expected save of $1.5 million per year, or 13 percent. GSA had a similarly successful auction for Texas this year and in New England states in 2013.

For GSA accounts the auctions yielded expected annual savings of $825,000, or 34 percent. GSA was able to accomplish these cost reductions while increasing the amount of renewable energy purchased by the participating agencies from 58 million kWh annually to 70 million kWh annually, a 21 percent increase. GSA increased the amount of renewable energy purchased for its participating accounts from 1.3 million kWh to 7.5 million kWh, a more than 400 percent increase.



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