CASE STUDY

State of Maine

Maine’s Governor John Baldacci, in his inaugural address in January 2003, committed to reducing electricity costs throughout Maine State Government by $1,000,000 in order to help balance the State’s budget in the face of significant revenue shortfalls.  In addition, during this same address, the Governor pledged to increase the percent of electricity used by state government that is generated from renewable sources.  To help achieve these competing objectives, the Governor’s Energy Director turned to Competitive Energy Services, LLC (“CES”) for assistance. 

CES developed a strategy whereby the State could achieve both of its objectives.  First, CES supplied over 750 of the State’s smaller electricity accounts with its Maine Renewable Energy product.  This product is generated from 100% renewable sources (hydro and biomass) located in the State of Maine.  To offset the slightly higher cost of this product as compared to the alternative Standard Offer Service these accounts were on, CES implemented an energy efficiency program that CES guaranteed would achieve conservation of sufficient amount to offset this increased cost.  The incorporation of both renewable generation and energy conservation resulted in annual reductions of 29,000 lbs of NOx emissions (a major source of ground-level ozone and smog), 43,000 lbs of SOx emissions (a major source of acid rain) and 6,200 tons of CO2 emissions (a major source of greenhouse gasses).  This combination allowed the state to achieve is renewable objective with no net increase in cost and a reduction in overall consumption.

Second, due to the fact that CES tracks retail pricing on a daily basis across multiple suppliers, CES was able to identify an opportunity to lock in lower market prices when retail forward prices dipped during the summer of 2003.  Even though the State’s existing electricity supply contracts still had four to seven months remaining on their respective terms, by locking in forward prices at that time the State was able to guarantee lower fixed prices under new three year contracts for its medium and large accounts.  These contracts secured prices that one year later were more than 2 cents/ kWh below market prices, equating to thirty percent below market, and provided savings of almost $1.5 million – 50% more savings than proposed by the Governor. 

Finally, due to CES’ database and evaluation capabilities, CES was able to provide the State with audited reports documenting the results of these efforts.  These reports were essential, since they served as support for an important component of the Governor’s budget and as documentation demonstrating that the State was meeting its environmental objectives.