About Us

HISTORY and BACKGROUND of PROGRAMS

The mission of the CPEC is to bring together counties, school districts, intermediate units, boroughs and townships, associations, authorities, fire companies, emergency service entities, churches and other non-profit organizations to obtain leverage as a purchasing group in the deregulated energy market. Concurrently with the aggregation activities, the Consortium seeks to educate its members concerning the energy markets, provide professional expertise and aid in establishing energy budget projections.

Established in 1997 by a group of nonprofit entities that included county governments, a school intermediate unit, a community college, a hospital, and other nonprofits, this nonprofit corporation recognized that aggregation and the advent of deregulation in both natural gas and electricity could offer significant opportunities for nonprofit entities. As a result, CPEC has provided to its members programs to produce savings in three (3) energy commodity areas; natural gas, fossil fuels, and electricity. The Board of Directors of CPEC, with a membership of eleven (11) members, has nurtured a strategy of providing expert advice and purchasing options to members that have realized savings in the millions of dollars over the ten (10) years the organization has been in existence.

            The Natural Gas program, taking advantage of Pennsylvania natural gas deregulation statutes, utilizes the expert advice of a national known energy firm. Advice as to proper rate class and advice as to price hedging methodology for attractive forward pricing utilizing contracts of both twelve (12) and eighteen (18) months has resulted in both lower prices when compared to the resident utility and has resulted in more predictability of total energy costs for a given period of time. The ability to react in a matter of minutes to lower forward market pricing has been a key to the success of this program. As the total volume of the load of the members has increased, more and more suppliers have responded to the requests for proposals, which has resulted in more attractive contract terms for the members. Due in part to the increasing size of the participating members load, the Consortium has been able to offer a purchasing program for members with smaller yearly volumes, thus allowing smaller members to realize savings as well.

            The Fossil Fuel program with four (4,000,000) million gallons of product, currently utilizes a sealed bid process to obtain pricing for a twelve (12) month period starting July 1. The specifications of the bid, which seeks pricing for members in an nine (9) county area, requires responses for both transport and tankwagon loads. Additionally, the vendors are asked to provide firm pricing for the year, as to both commodity and delivery, as well as fluctuating with and without a cap. The date the Consortium chooses to lock the pricing is a result of expert advice from several sources. Once pricing is locked for the ensuing year, contracts are executed between the individual members and the successful vendors.

            In addition to the three grades of gasoline, fuel oil (heating oil), B-2 ultra low sulfur diesel and off-road diesel, the Consortium has obtained pricing for members interested in  5%-20% biodiesel and 5%-20% biofuel oil (heating oil) .

            As an aid to members, the Consortium has provided advice to those interested members concerning comparison of price between fuel oil and natural gas in order to establish forward pricing requirements where alternate fuel capability exists.

            With regard to the Electricity program, the creation of the Consortium was triggered in part by the Pennsylvania Electricity deregulations statues adopted in 1997. The Consortium’s electricity program in the year 2000 resulted in a forty-three ($43,000,000) million-dollar contract, which extended over an eighteen (18) month period ending July 2001. This contract resulted in millions of dollars being saved by the members. Unfortunately, wholesale market pricing and the lack of interest on the part of suppliers, resulted in the members returning to their resident electricity utility. Thereafter, electricity pricing was based upon the rate caps established by the utilities as a result of the deregulation statues.

            The Consortium has established an electricity-purchasing program to seek competitive electricity pricing for members in the PPL territory (rate caps expired January 1, 2010)  and for members in the Allegheny Power, Med-Ed and Penelec territories, whose rate caps set to expire as of January 1, 2011. In order to facilitate this program, the Consortium has secured the services of an energy-consulting firm that has significant experience with the electricity utilities that serve the Consortiums members.

            The strategy of the Consortium with regard to electricity purchasing recognizes that both retail and wholesale pricing will rise after the removal of the rate caps. However, by aggregating a significant electricity load, the Consortium believes it will be able to obtain forward electricity contracts, where wholesale pricing makes those contracts attractive. Contracts will be sought for periods between two to five years; pricing will be as a result of coordination with the expert advice of the electricity consultant and relevant forward market indications.

             As a nonprofit entity, the Consortium constantly strives to offer all programs on a least-cost basis. The objectives of the Board of Directors continue to be reliability, service, and savings over current market pricing. With over three (300) hundred active members, the Consortium continues to see its membership expand. As the membership grows, the commodity load requirements increase, which provide an even greater attraction to the vendors and suppliers of those commodities, and the potential for more competitive pricing.

             As the complexities of the technology and resultant energy requirements increase, stability and predictability in pricing for energy becomes an absolute necessity. The aggregation of member’ energy load requirements to achieve consistent savings at low cost remains the primary goal of the Consortium and its Board of Directors.