The Examiner U-46 News Feed

New natural gas pact could save U-46 money

By Seth Hancock
  School District U-46 is seeking to secure prices for a 48-month contract with a natural gas supplier as the Board of Education will be voting on the proposal at its meeting on Monday, Nov. 5. The proposal was presented on Oct. 15.
  The proposal would allow the district to enter into a contract with either incumbent CenterPoint Energy or Constellation New Energy/Exelon, but no official price is available yet. The contract will likely cost about $3 million over the four years, and it would be paid for out of the operations and maintenance fund if approved.
  U-46 has been under contract with CenterPoint since February 2014 and it will expire in March of next year. This proposal would allow the district to secure lower prices for the 48-month contract according to the proposal.
  Richard Ramos, facilities coordinator, said once the proposal is approved the two suppliers will provide refreshed prices and the district will choose the lowest price.
  “The School District uses approximately 2.6 million therms of natural gas annually,” the proposal states. “Therefore a small change in fractions of a cent per therm one way or the other will mean an exponential change in funding; positive or negative.”
  Currently, U-46 is “paying $0.335 per therm” according to the proposal for an annual cost of $871,670, but the “current, conservative rates are around $0.29 per therm” for an annual cost of $754,580. That would equate to $117,000 less per year or a 13.4 percent decrease in costs.
  “The target results are to secure natural gas pricing lower than the current contracted rate, thereby saving a sizable amount of funding,” the proposal states. “The current gas contract ends during the winter blended gas rates (March 2019), so locking in the lower summer rates now will ensure savings are secured.”
  The district used consultant Belden Energy Solutions (BES) to help secure a contract. Jim Belden, managing director for BES, wrote in a letter: “Since the current energy market creates a favorable opportunity to secure low pricing for a long term contract, BES  recommends U-46 pursue a 36 to 60 month term as the best contract length to lock in low historic prices and budget certainty. BES also recommends U-46 seek final pricing proposals from the Recommended Supplier list on or around November 7, 2018.”

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