Having heard cries of pain and anguish from local companies staggering under the weight of their power bills, having watched prospective companies move to locations where the cost of power is cheaper, and having seen three local paper mills announce closings and hundreds of layoffs largely because of the cost of power, local economic development officials are moving to change the future.
The Berkshire Economic Development Corporation and the Berkshire Chamber of Commerce are pursuing a five-part strategy to encourage lower commercial energy costs in both the long and short term.
As part of the short-term strategy, the concept of an energy consortium is being shopped to local companies. The consortium would group together at least 25 business locations under one electricity-buying entity and put their power needs up for bid among a dozen power brokers – companies that are authorized to sell electricity in bulk to large users.
By themselves, these businesses would not have enough consumption to put their usage out to bid, but by forming a group, the larger block of consumption would be big enough for a bigger energy price agreement.
If it works, the one-, two- or three-year contract that results might give the member companies a better price on power and would certainly give them stability in the cost of their power. Cost stability allows for more accurate budgeting around energy costs by removing the price volatility that has plagued local companies over the past couple of years.
Almost like a fine
A recent survey conducted by Associated Industries of Massachusetts showed that, when the cost of power spikes unexpectedly, it impacts profit margins and causes companies to cut back on production, salaries and benefits to make up for the unexpected expense.
“We’re hearing the No. 1 concern right now among our members is the cost of electricity,” said Michael Supranowicz, president and CEO of the Berkshire Chamber of Commerce. “The way it works now, the heaviest users (of electricity) are penalized, and if they use more (power) than usual, it’s almost like they have to pay a fine.”
Tyler Fairbank, president of the BEDC, said that many local companies have gone to the trouble and expense of installing energy saving technologies, only to have the anticipated savings in electricity cost wiped away by rising rates.
One interested party is the Colonial Theatre.
“We burn a lot of energy here,” said Executive Director David Fleming. “The cost of power is our third largest expense, behind artist fees and wages.”
The cost of power after the first year was three times the forecast, Fleming noted.
“If that number was to double on us, it would be disastrous,” he said. “I would have to pound the pavement even harder for gifts or raise ticket prices, and nobody wants that.”
Another company ready to take part is Quality Printing.
“I think it’s something businesses large and small could benefit from,” said June Roy-Martin, business development manager. “Our business is growing, we’re investing in new technology, and our energy consumption is going up.”
Quality Printing currently pays about $10,000 per month for power.
“We need somebody to help businesses with this,” Roy-Martin added. “But the feds and the state aren’t doing it, so we’re trying to do it ourselves. It is a wonderful stance for the chamber to take.”
The chamber is sponsoring four forums, open to the public, to discuss the energy consortium concept.
Supranowicz said that once there are enough businesses on board, the bidding process would begin in December. When an acceptable price proposal is received, the member businesses would be given the option to accept the bid or back out of the consortium.
“We hope to make our first buy in mid- to late January,” he said. “But if we don’t feel it’s a good enough bid, we’ll say no and go back a couple of weeks later.”
But the consortium is just one of the short-term tactics. Another is the chamber’s and the BEDC’s inclusion in the next scheduled energy transmission rate hearing in 2008, “to ensure that fair and equitable electric costs are distributed between the business and residential community,” according to the strategy summary.
There also will continue to be efforts to educate business on the latest in conservation technology to keep usage down.
In the long term, the two agencies want to identify and attract renewable sources of energy generation to the Berkshires, such as biomass, biofuel, wind and solar. They also will be looking for ways to locate traditional forms of power generation closer to this region.
They hope to work with the Legislature and the governor’s office to develop a long-term strategy to stabilize and reduce energy costs in Western Massachusetts.
“The promotion of legislative and regulatory measures that encourage fair and equitable transmission costs, competitive supply costs, conservation, fuel diversity and renewable energy will be a focus,” reads the strategy summary.
“We are proactively trying to do more on the renewable side and in the (energy) generation side,” Fairbank said. “And the state needs to take a long-range look at the energy plan because the cost of doing business in the commonwealth is a hindrance, and the cost of energy is a big part of that.”
To reach Scott Stafford: email@example.com, (413) 496-6240.
If You Go…
Four informational meetings on the proposed energy consortium will be held in the coming weeks:
Oct. 24 – 4 to 5:30 p.m., Eastover Resort & Conference Center, 430 East St., Lenox.
Oct. 25 – 8 to 9:30 a.m., Colonial Theatre, 111 South St., Pittsfield.
Nov. 6 – 3 to 4:30 p.m., Colonial Theatre, 111 South St., Pittsfield.
Nov. 7 – 8 to 9:30 a.m., Hoosac Bank, 93 Main St., North Adams.
By Scott Stafford
22 October 2007
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