The FirstService Energy Aggregation Purchasing Program leverages the combined energy utilization of hundreds of properties managed by our parent company, FirstService Residential, to successfully negotiate lower-than-standard rates for natural gas and electricity from local utilities – enabling our clients to pay considerably less. When aggregated groups purchase large blocks of energy, they can benefit by negotiating discounted prices. In the last three years, buildings that participated in the program have saved $9,054,128 in electricity and $5,492,908 in natural gas costs – up to 13% less than rates charged by Con Edison and National Grid.
Fast Facts About the FirstService Energy Aggregation Purchasing Program
- Properties that are part of an aggregated group remain customers of their natural gas or electric utility company.
- Each building is quoted its own price based on its load profile while also benefitting from reduced supplier margins and other expenses.
- Buildings can choose a variable (index plus adder) contract or a fully fixed contract.
How Procurement Works
Energy prices fluctuate constantly, which can significantly affect your property’s energy bill and performance against budget. By taking a proactive approach to buying energy, you can better control your costs.
FirstService Energy specializes in purchasing energy on behalf of properties managed by FirstService Residential. We can lead you to strategic energy procurement that ensures you’re getting the best value for your energy dollar. We identify strategic sourcing opportunities by constantly monitoring market dynamics to identify the best possible purchase opportunities.
FirstService Energy will review your past energy invoices to identify current energy purchasing options and issue a Request for Proposal (RFP) to purchase energy for one of three reasons:
- Market dynamics present an opportunity
- Regulatory or supplier entrances/exits change options
- Upcoming contract expirations require action
After your property indicates a willingness to participate in an RFP, FirstService Energy will send the energy load to the supplier community. Our energy experts review all responses and recommend the best option based on key factors like pricing, contract terms, product structures and credit conditions. When you approve a recommendation, FirstService Energy handles the transactional process and completes all legal documentation.
Frequently Asked Questions
Deregulation gives consumers the opportunity to purchase electricity or natural gas from competing suppliers. The local utility still delivers the commodity to you, services the lines, and renders the bills. All customers in a service territory continue to pay the local utility a monthly fee (tariff) for the delivery, servicing, and billing functions.
Eligible properties are notified of the program each spring and fall. To participate, a member of the board completes and signs an Authorization Form and returns it to FS Energy by the due date.
Each Energy Service Company (ESCO) requires that you enter into a contract/agreement for the purchase of electricity and/or natural gas. Though pricing is based on all buildings in the group, each building has its own contract that reflects pricing, terms and conditions. Contracts are negotiated and signed on behalf of each building by FirstService Residential.
All contracts are for a 12-month term beginning either June 1 or October 1.
While there is no cost to your building to participate, FS Energy does receive compensation from energy suppliers for running the program. An administrative fee of $.002/kwh for electric and $.02/therm for gas is paid to FS Energy directly by the suppliers.
Your building will benefit from aggregated purchasing power. In addition to a small reduction in sales tax, your building will no longer pay a Merchant Function Charge (an administrative expense charged by the utility that you are currently paying as a result of buying your supply from them).
Clients are enrolled for a period of one year for electricity and/or natural gas and have the opportunity to re-enroll in the program each year.
Just like the local utility’s supply, the blended rate that we contract for is variable in nature. However, we minimize risk by locking in the “adder” portion (Ancillaries and Capacity charges) and buying index energy at the wholesale rate which is tied to the NYMEX. While one portion (the energy portion) will float at the market and fluctuate, the adder portion will be fixed at a lower rate. Additionally, the other part of the savings will come from the aggregated way in which we negotiate the rate. FS Energy pre-approves the legal terms of the agreement between the building and the suppliers. By doing so, we save money and time for each individual building to address the legal language.
FS Energy also reviews and confirms that the building pays the appropriate sales tax.
No, this program applies only to the common areas of a building.
Yes, FS Energy issues reports comparing the costs against the utility.
FS Energy aims to deliver both energy savings and stability to FirstService Residential properties. To that end, FS Energy is concerned with a long-term approach to the energy market as well as short- and long-term savings. Other energy consultants are focused on short-term offers.
Each spring and fall, FS Energy creates two aggregated Requests for Proposals (RFP) – one for electric, another for gas – that include the energy needs for all participants enrolled in the program. After several rounds of bidding, a vendor is selected based on the most cost effective pricing for each individual property. Customer service is also considered. FirstService Residential signs the individual contracts on behalf of each property.
The contract will be a variable rate contract for a 12 or 24-month term. However, at any time during the contract term, you have the option to fix the contract for the remainder of the term. This is one of the flexible options FS Energy has negotiated on your behalf.
While FS Energy cannot guarantee savings for your property, we have demonstrated substantial savings for participating properties to date.
If you choose a new supplier, your local electric or natural gas utility will continue to deliver the power or gas to your property. Your local electric utility will also continue to maintain and repair the poles and wires. Your state’s Public Service Commission (PSC) will continue to oversee the safety and reliability of your service.
No. Utilities are obligated to support customers who opt to purchase their natural gas from third party suppliers. The primary function of the utility is to take the gas that has arrived from the supplier at the utility receipt point and redeliver it to the customer’s facility.
Since the local Public Service Commission governs the suppliers who are registered, such acts happen rarely, if ever. In the event a supplier fails to deliver natural gas, the utility will step in and deliver the gas necessary to keep the customer in operation. However, as the customer notified the utility that they would be purchasing their natural gas from a third party supplier, there may be a penalty associated with the natural gas provided by the utility. The customer could be required to seek compensation from the supplier.
All suppliers (ESCOs) are approved by the state’s Public Service Commission (PSC).
The process is seamless and you will not even notice when the new supplier begins. You do not need any new equipment, meters, or account numbers. The only difference is that you will pay a supplier for the electricity you consume rather than pay the local utility.
Nothing changes. The same local utility service team will be dispatched to service the power lines and turn your power back on under the same protocols that have existed for years. Your local utility is still responsible for all aspects of delivering and servicing your power. Your property, along with all other consumers in the utility’s service territory, pays a tariff amount every month to the utility for the delivery and servicing of the wires. In fact, the local utility is indifferent as to what supplier a customer uses. It delivers the electricity through its wires just as it always has. Further, the utility does not know which of its delivery customers are using competitive suppliers.
All contracts may include the following provisions:
- Term – Dates the contract is in effect and any renewal provisions; states if renewals are automatic, or need subsequent approval.
- Pricing – Establishes the price per energy unit (kWh, therm, ccf, MCF), and notes how taxes are treated, as well as any other potential fees or charges.
- Termination – Specifies the conditions under which the contract can be terminated.
- Assignment – Identifies whether and under what conditions your contract may be assigned to others.
- Consumer Protections – Outlines protections to consumers, along with contact information for the ESCO (or broker) and the New York State Public Service Commission.
- Cancellation – Identifies how to cancel the contract and provides notice of any cancellation fees that might apply.
- Title – Identifies where the title to the electricity or natural gas is transferred to the customer.
- Warranty – Outlines any representations or warranties included in the agreement.
- Force Majeure – Establishes circumstances under which the ESCO (or broker) may be released from performance under the contract; generally related to interruptions in service beyond the control of the parties.
- Liability – Outlines the conditions and remedies that may be available in the event of damages arising from lack of performance under the contract.
- Dispute Resolution – Outlines the process to be used if the customer disputes a specific bill or charge.
- Choice of Laws – Identifies the venue and process agreed to for legal determinations of the contract, if needed.
- Taxes and Laws – Identifies responsibility for taxes or regulatory requirements.
- Emergency Contacts – Identifies who to contact in the event of a service interruption, gas leak, etc.
If your property is interested in procurement services, please email us at [email protected].