The September 29 County Commissioners Work Session was characterized by an unusually hectic tone as Purchasing Director Barry Hitchcock laid out the County’s options for securing a new energy contract within the next two days. With the only remaining bid now in limbo, and over one hundred municipalities potentially participating in the contract, the Commissioners strove to balance transparency with efficiency in determining their next steps.
Hitchcock was accompanied by David Butsack, a representative of American PowerNet, the County’s energy consultant. During the Work Session, the two officials dialoged with the Commissioners to make sense of this complex yet critical juncture.
The search for a new energy provider was prompted by PP&L’s approaching 2010 deregulation and rate cap removal, which is expected to increase customers’ energy bills by as much as 40%. The County, which currently contracts with PP&L, has sought a replacement provider to minimize the impact on County operating costs.
Through the Lancaster County Cooperative Purchasing Board and Energy Consortium, hundreds of regional municipalities could “piggy-back” on the contract in question, Hitchcock told NewsLanc. According to Hitchcock, most of these municipalities are presently “sitting by their phones,” awaiting the Commissioners’ resolution.
The process of seeking a new vendor has been troubled since the request for bids. Few companies have been interested in contracting with a consortium that includes so many small municipal governments—especially in the State of Pennsylvania. According to Butsack, one vendor retracted their offer due to a perceived instability in Pennsylvania’s economy and state budget.
Ultimately, of the 15 companies invited to bid, only five responded. Of those five vendors, three removed their bids before today. At 9:45 this morning, Hitchcock said, yet another vendor backed out, leaving only a single company in the running.
Hitchcock would not disclose the name of the remaining contractor. The bid itself was reported to offer energy costs 13% lower than PP&L costs projected for 2010.
The remaining bidder’s proposal was contingent upon closure before 2:30 this afternoon; and, when the County requested an extension until 5 p.m., the price was moderately increased. A memo had been sent to consortium members, requesting that they execute and return their contracts and confirmations by 5 p.m.
Matters became further complicated at the Tuesday meeting, however, when it became clear that the Commissioners would not be able to approve the resolution during their morning meeting. The decision was already publicly advertised to occur at a special 7:30 meeting that night in Mount Joy Borough.
“The difficulty for us is we want to be nimble so we can get the best pricing that we can,” Commissioner Craig Lehman asserted, “But we also want to be transparent so that public knows what we’re doing.”
After a fifteen minute recess, the Commissioners decided that Butsack will ask the bidder to refresh their price and hold the offer from 5 p.m. until a definite time tomorrow morning. The other bidders will be likewise contacted for good measure. The Commissioners will then end the 7:30 p.m. meeting in recess until a time, likely tomorrow morning, when the Purchasing Board and consortium members are prepared for an official bid approval.
UPDATE: Tuesday, September 29, 9:30pm
At the evening Commissioners Meeting in Mount Joy Borough, Hitchcock recommended that the Commissioners recess their meeting until 10:30 a.m. Thursday. During the meeting, Hitchcock further clarified that the purpose of the postponement is to properly coordinate the Commissioners’ decision with the bidder’s energy pricing schedule.
It was a lack of such coordination, Hitchcock implied, that brought about the day’s confusion: “What happened was that the pricing came in and they said, ‘It’s good until five o’clock tonight.’ Well, it’s obviously eight o’clock [now], so our prices expired, and we actually have nothing to award [tonight].“
There is something wrong with long-term pricing that can change dramatically because of an unreasonably tight deadline.