Reverse auction cuts R.I. gas bill by $1M

PROVIDENCE – The R.I. Department of Administration said Friday it used a reverse auction to shave about $1.2 million from government natural gas bills in the three-year period starting next month.

The state said it held about 15 online auctions on Sept. 29 to award natural gas supply contracts for Department of Administration buildings, court facilities, other state accounts and participating municipalities.

The state said the auction cost of the gas for the group is approximately 13 percent below the previous contract, saving approximately $400,000 per year over the three-year period.

The state awarded contracts that commence Nov. 1 to Hess Corp. and Santa Energy Corp.

“It is always critical we look for cost savings in every spending area,” Gary Sasse, director of the Department of Administration, said in a statement. “This creative and unique reverse auction platform elicited great interest from energy providers, resulting in significant cost savings to the state.”

The state said three companies participated in the auction after clearing a technical review process held in August. Worcester-based World Energy Solutions Inc. provided the auction platform.

The statement from the Department of Administration also said the state expects to see additional savings as the price of natural gas continues to fall.

Natural gas prices fell nearly 8 percent to $4.466 per million British thermal units in New York trading on Thursday after an Energy Department report showed U.S. stockpiles of the fuel rose to a record 3.589 trillion cubic feet last week.

The price of natural gas has declined by about two-thirds since hitting a high of $13.694 per million Btu in July 2008.