Energy and Sustainability

Energy Purchasing and Portfolio Management

The primary goal of DGS’ energy purchasing program is to minimize both the cost to taxpayers and the environmental impact of the State’s energy consumption. As the State’s primary procurement authority for commodity contracts, the agency’s Office of Energy Performance and Conservation secures and manages several agreements for de-regulated energy commodities for state agencies. Agreements include contracts for wholesale and retail electricity and natural gas, renewable power and demand response services. DGS also coordinates statewide purchasing strategies and portfolio management activities with the University System of Maryland (USM).

Electricity Purchasing Overview

DGS purchases electricity in de-regulated power markets on behalf of all state agencies. Through an innovative electricity purchasing strategy for larger accounts, DGS hedges for a portion of the future power requirements of state facilities. By locking in rates for a portion of future power needs and purchasing the balance at real-time rates, favorable trends in power prices are exploited to the State's benefit. This strategy is referred to as “Block and Index.”

Avoided Cost of Block & Index account purchases compared with Reverse Auction Fixed Rate accounts (FY2019): $4,701,788​

For the State's several thousand smaller accounts, DGS purchases electricity through periodic online reverse auctions. The first such auction was conducted in 2004, and the most recent auction was conducted May 2017.​

FY2019 Electricity Purchasing Summary*


kWh​
​% of Total
 kWh

Cost ($)​
% of Total
 Cost​
Unit Rate
($/kWh)
​Large Accounts
(Block & Index)
​913,713,359 65.93%​ ​$32,166,300 ​47.82% ​$0.0352
Small Accounts
(Fixed Rate)​
269,262,578 19.43% ​$16,393,543 ​24.37% ​$0.0609
Renewables
​(Wind & Solar PPAS)​
202,963,761 ​14.64% ​$18,709,298 27.81% ​$0.0922
Annual Total​ 1,385,939,698 ​100.00% ​$67,269,141 ​100.00% ​$0.0485
*Cost and unit rates for commodity only, excluding charges for capacity, transmission, administrative and management fees (DGS and USM accounts)

Any questions about Energy Purchasing or Demand Response can be directed to:​

Brandon Ward
Analyst
Brandon.Ward1@maryland.gov
410-767-1929​​

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