School districts on track to save $25M through pooled energy purchases

As school officials prepare to sweat out the all-important budget vote later this month, one piece of good financial news has been making the rounds.

Through a program that allows pooling of energy generation purchases, state school districts are on track to save $25 million in the 2011-2012 school year.  That savings, which averages about $62,000 per district, follows over $36 million the 400 participating districts saved over the last two school years.

The cooperative, known as the Alliance for Competitive Energy Services,  was organized by the New Jersey State School Boards Association.

“The reduction in energy costs enables public schools to direct more of their available funds to the classroom,” said Marie S. Bilik, NJSBA executive director.  “In some districts, the savings could help to maintain important education programs; in others, the reduced costs could alleviate some of the burden placed on local property taxpayers.”

The program was made possible through the energy deregulation law passed in 2000, which allowed power purchasers to purchase generation separate from delivery.  The economy of scale provided by more than 400 participating districts allows for the savings, said NJSBA spokesman Frank Belluscio.

The City of Newark was the largest beneficiary of the program with a combined savings of $823,000 in the 2009-10 and 2010-11 school years.  The city is expected to save another $646,000 in the coming year, which amounts to about two-thirds of one percent of the overall $970 million budget.

The City of Elizabeth came in just behind Newark, saving $804,000 over the last two school years.  Elizabeth is expected to save $510,000 in the coming school year. School districts on track to save $25M through pooled energy purchases