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First Energy Inks $15M Power Deal with GSA

First Energy Inks $15M Power Deal with GSA

First Energy has won a whopper $15 million power supply contract with the U.S. General Services Administration (GSA) covering deliveries to 843 federal accounts in New Jersey, including the Statue of Liberty and Ellis Island, U.S. landmarks operated by the National Park Service.

Beginning in mid-November, FirstEnergy Services will provide power to 12 federal agencies and nine non-profit organizations, including: the U.S. Postal Service; the Bureau of Prisons; the U.S. Coast Guard; the Federal Aviation Administration (FAA); the Job Corps; the National Park Service; the U.S. Department of Interior; the American Red Cross; and the U.S. Social Security Administration. Over the course of the 18-month agreement, FirstEnergy Services will provide an estimated 372-million kilowatts of electricity.

"The GSA liked the way we approached the market," said Douglas Elliott, vice president of sales, marketing and energy services for FirstEnergy. "In addition to offering a very competitive price, we offered the GSA a bid package that helped the government get the best possible value for the dollars it was spending on energy."

The GSA said by leveraging the vast purchasing power of 21 federal agencies in New Jersey, the agency saved American taxpayers $2.35 million in energy bills over 18 months.

"In this new era of energy deregulation, GSA's contracting expertise can help federal agencies easily buy power for their buildings - and with Strategic Positioning do so at significant savings," said GSA Regional Administrator Rafael Borras.

GSA grouped the government agencies and not-for-profits based on a new concept called strategic positioning, which is designed to lower their utility bills in the deregulated environment by managing the energy profile, or load factor, of its facility inventory. It allows GSA to negotiate for better rates by combining low load factor buildings with high load facilities, such as federal prisons, hospitals and laboratories. In New Jersey, strategic positioning will mean a savings of over $2 million to taxpayers, GSA said. This amount is in addition to across-the-board discounts power providers have begun offering companies in order to compete more effectively under deregulation.

New Jersey is the third area where GSA has aggregated power contracts. In November 1998, it signed a contract for federal agencies and not-for-profit organizations in Pennsylvania that will save taxpayers $5.1 million over 12 months. In February 1999, GSA issued an aggregated contract in the New York City area.

Rocco Canonica

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