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SAN DIEGO, Sept. 23, 2003 -- Sempra Energy Solutions, the retail energy marketing arm of Sempra Energy, has announced the company has been awarded a $50 million, 29-month contract to provide electricity to 30 hospital facilities as part of a collective buying agreement managed by the New Jersey Hospital Association (NJHA).
Select members of the NJHA, including Atlantic Health System, Capital Health System, Saint Barnabas Health Care System and others, pooled resources to create an aggregate energy load, which gave them greater buying power.
The association started the review process early this year in anticipation of the Aug. 1, 2003, deadline for large commercial and industrial customers to switch to a new energy supplier. After Aug. 1, customers became subject to hourly pricing by local utilities, plus a $5 per-megawatt-hour penalty if they decided not to act.
"Our focus was to approach this exercise from a risk-management perspective," said William Kennedy, senior vice president, corporate services, NJHA.
"Budget certainty is important for our hospitals because they are not- for-profit entities and every dollar saved helps provide a better environment for their patients. We created an equitable arrangement for our members by using their combined purchasing power to secure a large block of electricity at low cost, which was then individually priced based upon each member's energy usage. This way, we were able to provide the hospitals with predictable costs and a savings in consultant and legal services, making it a win-win for everyone."
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