A Consumers Energy contract approved by state utility regulators on Thursday could mean good news for MSU energy costs.
The Michigan Public Service Commission agreed to a special pact between the energy company, the state, Western Michigan University, the University of Michigan-Flint and MSU. The two-year contract will save the parties about $1.8 million in electrical costs, with MSU expected to save a minimum of $175,000 annually.
The idea for cooperative buying between the state and public institutions began about a year ago.
"We had a talk with Consumers Energy, who said they were interested in a special contract during these tough budget times," said Pamela George, MSU's director of purchasing. "They offered to give us a 7-percent discount on our 2003 pricing for two years."
George said the savings will apply to the university's high-usage areas such as Spartan Village. She said university officials would like to add a few more sites to the contract, but the committee is satisfied with the deal.
The contract took effect Jan. 1, but met opposition when two trade groups argued their members would pay more to compensate for the money saved by the state and universities.
But J. Peter Lark, chairman for the commission, said the agreement was great news for taxpayers in Michigan.
"This special contract will give discounts to the state of Michigan and three public universities - all of which are facing severe budget issues - and it will do so without including a provision that automatically requires other customers to pick up the tab," he said in a written statement.
While the commission agreed to the contract, it rejected Consumers Energy's request that other customers pay for the state and universities' discounts. In order to meet this concern, all parties involved in the contract were given five days to submit a revised contract consistent with this order.
Dan Bishop, public information director for Consumers Energy, said that while his company had not yet reached a final decision regarding the revised contract, it is still committed to making it work.
