In the first of its kind for the hotel industry, PG&E EnergyServices has signed a five-year, $165 million deal with theprocurement arm of Marriott International to provide natural gas,electricity and various energy services to 130 properties inCalifornia. As other states open their energy markets, PG&Ehopes to do other deals with the huge Bethesda, MD-based hoteloperator, which has 1,800 properties worldwide.

“This is the first alliance we’re aware of in the hotel industrythat involves a broad base of lodging properties,” said a SanFrancisco-based spokesperson for PG&E Energy Services.”Ultimately, we are very hopeful of expanding this deal to gobeyond the California boundaries. This contract also is acomprehensive energy services deal that goes well beyondcommodities. It is significant because the potential savings isreally very significant because of the combination of commodity andenergy services.”

The energy commodity discounts and anticipated facilityimprovements combined are expected to lower each participatingproperty’s energy costs by as much as 30%, according to PG&E.For the five-year contract period, the deal will involve anestimated $100 million in energy and another $65 million in energyservices, such as energy efficiency measures like new lighting orenergy delivery systems, and energy management.

“I’ve seen the numbers, and in some cases it looks likepotential savings even greater than 30%,” the PG&E EnergyServices spokesperson said. PG&E Energy Services, which nowclaims to have contracts in hand totaling more than $3 billion inrevenues over the lives of various multi-year deals, negotiated acontract with The Marketplace by Marriott, a year-old operationproviding one-stop shopping for commodities and services for bothMarriott and non-Marriott businesses. Marketplace offersMarriott’s worldwide procurement expertise and buying leverage.”This is an excellent opportunity to offer energy savings for ourcurrent and potential Marketplace customers throughout California,”said Dennis Baker, executive vice president and general manager forMarketplace.

Under the deal, PG&E Energy Services will work with each ofthe California properties to determine what combination ofcommodity and related services each individual complex needs. Forsome properties, electric or gas commodity services will not be anoption because they are located within a municipal utility’sservice area, which so far are not covered in the state’s energyrestructuring.

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