Big Buys, Big Savings, Or So Pottsgrove Schools Hope

POTTSTOWN PA – Buying energy in bulk, Pottsgrove School District administrators believe, may be another way to lower operating costs in its five school buildings.

Big Buys, Big Savings, Or So Pottsgrove Schools Hope

Part of a natural gas pipeline

Pottsgrove and other districts, in a consortium formed by the Montgomery County Intermediate Unit, with work with a commodities broker to buy bulk natural gas and have it delivered to schools during the 2012-2013 academic year, the Board of School Directors agreed last Tuesday (May 8, 2012).

Commodities are generally described as raw materials (like natural gas or gold) or agricultural products (like oranges or beef cattle) that are readily marketable and vary little among producers. They often are sold by contract or agreement for delivery on a specific date. The value of a contract is that it locks in a price to be paid for the product, no matter what happens to affect future pricing.

The MCIU group is working with Texas-based Amerex Brokers LLC, which will manage the natural gas purchases, and Hess Energy, with offices in New Jersey, which will handle distribution.

Business Administrator David Nester told directors the district should see “significant savings” under the arrangement. He asked the board to authorize him to sign agreements on its behalf with Hess to secure the delivery cost alone at 6.5-cents per decatherm, a measurement unit for energy. The gas itself hasn’t been purchased, so its cost is still undetermined.

“Commodities prices vary, and in some cases we may need to act quickly without consulting with the board to get the best deals,” Nester explained. “I’m seeking authorization to make these decisions for the board, rather than having to wait days or weeks for a meeting,” he said.

Nester got what he sought; board members offered their authorization unanimously. Directors Michael Neiffer, Scott Fulmer and Philip Keogh were absent and did not vote.

Related (to the Pottsgrove Board of School Directors’ May 8 meeting):

Photo from Google Images

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