Laconia School District offered 3-year contract by electricity supplier that could save total of $34,000

LACONIA — The company that supplies the School District with electricity is willing to renegotiate it’s current supplier contract and save the district as much as $34,000 over the next three years.

Business Administrator Ed Emond told the Budget and Policy Committee last night that TransCanada will lower its cost per kilowatt hour by over a penny if the district enters into a new three-year contract.

“This is a no-brainer,” said Scott Vachon, the subcommittee chair. “This is something we really should do.”

Two years ago, the School District negotiated a three-year deal with the Canadian energy giant for electricity at .08699per kilowatt hour. The district uses about 2,800,000 million kilowatt hours per year.

Emond explained the district uses energy broker CMG to negotiate its energy contracts and two years ago they successfully bargained for the current rate.

During preparations for the upcoming budget, CMG said it could successfully renegotiate the last year of the previous contract in exchange for a new three-year contract.

Should the district decide not to renegotiate, the price will remain the same as it is now — .08699 — a figure that is locked in but higher than the proposed .07480 for a new three-year contract.

TransCanada is the energy supplier, while Public Service of New Hampshire lines are used to get the electricity to the School District. Emond said the district gets two monthly electricity bills — one from each utility and spends $243,000 on electricity alone in the course of the year.

The renegotiated contract, if approved by the full board, could lower those costs to just over $215,000 in fiscal year 2012-2013, $212,000 in fiscal year 2013-2014 and $209,000 in fiscal year 2014-2015. The city and the school district’s fiscal years run from July 1 to June 30.

Emond said his preliminary numbers indicate this year’s projected electrical usage is down between 12 and 20-percent from last year but said he is still preparing the exact number and where the potential savings occurred for a future presentation.

“We’ve worked hard shaving our use,” he said, telling the administration and the subcommittee that he wants to double check his numbers before getting too excited.

Vachon told the subcommittee that negotiating a set price for three years not only will save the district money but it will help the administration and the School Board in its budget planning for next three years.

He explained to the board how, through his own private research, he has learned that large, for-profit companies also use energy supplier contracts to determine when and if they’ll bring new plants on-line and other long-range planning purposes.

To Vachon, a long-term electrical contract that saves the district money and gives them a solid budget number for three years going forward makes perfect sense.

A new contract would have to be drawn up and approved by the full board before it can become effective.

The electrical rate news came from the Budget and Personnel subcommittee meeting where the members reviewed the proposed agenda for the School Board’s “Super Saturday” — or the Saturday morning when the board meets at the SAU office and addresses budget issues for next year, as well as reviews its three-year plans.

This year, subcommittee members extended an invitation to new City Manager Scott Myers and new City Business Manager Donna Woodaman so they can better understand how the next year’s school budget is derived.

“Super Saturday” meetings are less about the actual numbers and more about the goals of the district, especially curriculum and education, and a discussion of how the district plans on meeting those short- and long-range goals within the confines of a tax-capped budget.

This year’s “Super Saturday” is Jan. 28 beginning at 8:15 a.m. and should last until about noon. It is open to the public.