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OACS encourages schools to plan for changes in electricity pricing

Written on September 23rd, 2009

Schools can join energy savings plan to ensure low costs for electricity 

The Ontario Alliance of Christian Schools (OACS) is revitalizing its energy savings plan and encourages schools to sign on in light of electricity changes coming this fall.

Starting Nov. 1 Ontario’s public sector, which includes schools, will move from paying the Regulated Price Plan (RPP) to a price based on the average hourly price for electricity.

Schools that have not made arrangements will pay spot market prices, which are volatile and difficult to budget because they change everyday based on market demand.

Members of the OACS can join its energy aggregation strategy that provides energy price stability as well as savings for schools, churches and organizations through bulk purchasing of energy.

The strategy has been in place for natural gas and is being updated to include electricity.

“We are encouraging as many people as possible in the schools to be aware of this upcoming change,” says Larry Lutgendorff, OACS director of development, noting if schools do not have a plan in place they will be surprised by the change in their energy costs.

The OACS hired Alberta-based Energy Associates International to provide expertise for the energy aggregation strategy.

“Energy Associates International was recommended to the OACS by the Association of Independent Schools and Colleges in Alberta (AISCA), who have seen significant cost savings in the five years they have engaged the consultants,” says Lutgendorff.

“The consultants have the expertise to provide the OACS with information on the complex energy market so we can make good decisions when it comes to energy prices,” he says.

Schools will benefit from having a stable energy price and know what their costs are monthly so they can budget accordingly.

“The other advantage is that we have somebody watching the market for us and we are not locked in for large lengths of time,” adds Lutgendorff.

In June the OACS sent out a memo to member schools regarding the energy aggregation strategy and invited schools to join the savings plan. Lutgendorff says at that time 23 schools signed on, while others were waiting for committees to review the plan.

Through the consultants the OACS sent a request for proposals to six electrical utilities, and have received two responses. The organization hopes to solidify prices by the end of September to let members know the results by early October.

If schools do find a better price somewhere else Lutgendorff asks that they let him know, but says likely individual schools would have a hard time matching the price the aggregated group will receive.

“The price we expected to get was around 4.9 cents per kilowatt, which is less than the 6.6 cents per kilowatt being paid currently on the RPP. The quotes we have in hand range from 4.3 to 4.8 cents,” says Lutgendorff.

“Schools use a lot of electricity, especially during the peak use hours each day. The bigger the school the more electricity they use so they are naturally looking for ways to trim their costs,” he says.

Though the actual savings remain to be seen, Lutgendorff says from looking at the market it is clear the group price will save schools money, especially as over the long-term electricity prices will increase.

“The advice from our consultants shows that prices are at bottom. Winter is coming and there is also the cost of switching away from coal plants to gas-fired plants, so the price of electricity in Ontario is facing strong upward pressure,” Lutgendorff says.

Currently the OACS is focusing on building the energy savings group and providing significant savings for those who participate. In the future, there is the opportunity for more energy services to be offered, such as buying green power and energy audits for individual schools.