Marriott to Save in Deal with PG&E Energy
In the first of its kind for the hotel industry, PG&E Energy
Services has signed a five-year, $165 million deal with the
procurement arm of Marriott International to provide natural gas,
electricity and various energy services to 130 properties in
California. As other states open their energy markets, PG&E
hopes to do other deals with the huge Bethesda, MD-based hotel
operator, which has 1,800 properties worldwide.
"This is the first alliance we're aware of in the hotel industry
that involves a broad base of lodging properties," said a San
Francisco-based spokesperson for PG&E Energy Services.
"Ultimately, we are very hopeful of expanding this deal to go
beyond the California boundaries. This contract also is a
comprehensive energy services deal that goes well beyond
commodities. It is significant because the potential savings is
really very significant because of the combination of commodity and
The energy commodity discounts and anticipated facility
improvements combined are expected to lower each participating
property's energy costs by as much as 30%, according to PG&E.
For the five-year contract period, the deal will involve an
estimated $100 million in energy and another $65 million in energy
services, such as energy efficiency measures like new lighting or
energy delivery systems, and energy management.
"I've seen the numbers, and in some cases it looks like
potential savings even greater than 30%," the PG&E Energy
Services spokesperson said. PG&E Energy Services, which now
claims to have contracts in hand totaling more than $3 billion in
revenues over the lives of various multi-year deals, negotiated a
contract with The Marketplace by Marriott, a year-old operation
providing one-stop shopping for commodities and services for both
Marriott and non-Marriott businesses. Marketplace offers
Marriott's worldwide procurement expertise and buying leverage.
"This is an excellent opportunity to offer energy savings for our
current and potential Marketplace customers throughout California,"
said Dennis Baker, executive vice president and general manager for
Under the deal, PG&E Energy Services will work with each of
the California properties to determine what combination of
commodity and related services each individual complex needs. For
some properties, electric or gas commodity services will not be an
option because they are located within a municipal utility's
service area, which so far are not covered in the state's energy
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