Helping EIA Members Save Money

The Energy Buyers Program helps to reduce electricity and gas costs for EIA members.

To help reduce electricity and gas power costs for its members, the Environmental Industry Associations (EIA), Washington, D.C., recently joined the nationally endorsed Energy Buyers Program, which could prove to be a financial boon.

Through the Energy Buyers Program, the energy and gas usage characteristics of EIA members will be combined with those of members from 55 other national and state trade associations.

Among these associations are the National Association of Broadcasters, the American Road and Transportation Builders Association and the American Society of Association Executives, all based in Washington, D.C., as well as the National Association of Chain Drug Stores based in Alexandria, Va.

Once the gas and energy statistics are combined, Affiliate Power Purchasers Inc. (APPI), the Salisbury, Md.-based Energy Buyers Program sponsor, will negotiate reduced electric and natural gas prices for all program participants.

By combining the volume and usage within a service territory into a multi-industry pool, the APPI can use buying leverage to give EIA members the best price and reliability from competing energy and fuel providers.

Since the early 1990s when federal legislation guaranteed open access to the wire system to deliver electricity to the marketplace, electronic deregulation has been occurring on a state-by-state basis. The objective was to increase competition among electricity generators and sellers.

This is in contrast to long-distance telephone deregulation, which occurred on a national level, all at once.

Many states have completed their deregulation process. Consequently, they have enabled legislation and agreements between the utilities operating within the state and the state's regulatory body, which normally is the public service commission or the public utility commission.

Some states began deregulation with a "pilot program," or form of "phased-in deregulation." Other states have opened the entire state to consumer choice at once.

During the next seven to 10 years, most of the nation will have deregulated electric utilities, with commercial and residential customers being able to choose their electricity supplier. Consequently, by joining the Energy Buyers Program, the EIA is trying to obtain the best prices for its members in a deregulated atmosphere.

Program benefits for EIA members could include:

- Free membership. APPI does not charge initiation fees or annual dues. Rather, the program sponsor is compensated through a small percentage of what it saves program members.

- Strong representation. Because APPI's revenue is directly related to the savings it provides, participants are assured that APPI is representing their best interests. For example, APPI will not move a customer's account from its current utility unless negotiators can obtain a cost savings from another supplier.

- Freedom to choose another supplier. The Energy Buyers Program does not keep members from obtaining a better rate if they decide to go with another service provider in the future. APPI represents its participating member companies, not the energy supplier. During the period specified by the membership agreement, APPI will monitor the changing electricity market for the lowest electricity cost. The savings then are passed to members.

- Option to remain with local suppliers. Subscribers to the program can continue to receive electric bills and customer service from their current local electric utility company. This local company will deliver electricity to subscribers; only the electricity source may change. Also, a current utility cannot refuse to serve a subscriber's account.

Industry experts predict that mergers and consolidations will continue to occur, and that many companies will not survive in the new, competitive environment.

To that end, "the utility companies that provide all components will have to operate in a competitive marketplace," says Bruce Parker, EIA president and CEO.

During the next few months, EIA plans to send marketing materials about the Energy Buyers Program to its members to inform them about their new energy-buying options.