Electric service sparks discussion for school board

| 24 May 2012 | 01:44

WEST MILFORD — Electricity was on the agenda earlier this month as the school board approved contracts with Direct Energy Business of Iselin, Hess Corporation of Park Ridge and Reliant Energy Northeast LLC of Princeton for their electrical generation services.

These contracts are awarded through the district's cooperative agreement through Alliance for Competitive energy Services (ACES). The contracts run from May 1, 2012 through April 30, 2013. Trustee Jim Foody was the only board member to vote against the motion.

Foody questioned the possibility of changing the company the district uses for energy to another that Foody said promised savings of $100,000. He brought up the proposal at the April 25 meeting, saying he had been in contact with Jack Smith of Energy Market Exchange (EMEX) and was told they could have an estimated price within a week or two with anticipated significant savings based upon last year’s costs and current live-auction bidding. Foody said he received the information from former Trustee John Aiello, who looked into the company independently and referred the information to Business Administrator Barbara Francisco in March.

However, the district has a contract with the Alliance for Competitive Energy Services (ACES), a consortium of school districts contracted together to receive cheaper rates based on the size of the group. The district originally entered into the ACES contract in 2007 for two years and then extended that contract to 2014. This past January, the school board reaffirmed the bid-binding contract and approved it in February. Aiello came to her in March with the new information, she said.

Foody said he didn’t see why they couldn’t go with EMEX if their price was lower, and why an agreement from the board in 2007 would stop them from being able to do so. Francisco explained that for the district to consider using another company, as proposed by Foody and Aiello, the board would have to hire a separate energy consultant to send out Requests for Proposals and rescind their agreement with ACES. Francisco said the move would put the district in violation of the contract and at risk of a lawsuit with the current energy suppliers through the ACES consortium. This was confirmed by the board attorney Joseph Roselle, who said that since ACES works in cycles, the board must wait for the end of the cycle in 2014 to change consultants and avoid breach of contract litigation.

Francisco added that the bidding with the company that Foody proposed is similar to involvement in the stock market and prices can fluctuate significantly; bid opportunities and requests for proposals on the New Jersey Department of Community Affairs Web site are updated with changes hourly.

Trustee Marilyn Schultz asked about the savings the district could expect through ACES. Francisco said the current bid through the ACES consortium will save the district about $90,000 from last year’s costs based upon the new bid and the fact that Rockland Electric has also entered into agreement with them. EMEX also based its estimated savings on last year’s costs.

Foody then motioned to amend the resolution by adding that the money saved through the ACES agreement be used to eliminate the district’s Student Activity Fee for the 2011-2012 school year. Roselle said the board cannot direct where the money goes; it would have to be a recommendation by the business administrator or superintendent, then approved by the board. Trustee Wayne Gottlieb asked what would happen if the price of diesel fuel goes up to $5 per gallon? How would they pay for it? Board President Dave Richards said they would have to reinstate the fee.

Francisco suggested the matter could be referred to and discussed in the Budget and Finance Committee and that if they decide to go that route, the Student Activity Fee money could be refunded to families as it was once before.

The matter was referred to the Budget and Finance Committee to discuss at their June meeting for further consideration, but Foody objected to the referral, saying that a fire safety issue he brought up previously was also referred to committee and he said nothing was ever done.