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UL System Entergy, Purchasing Initiatives to Save State About $5 Million in 10 Years

UL System Entergy, Purchasing Initiatives to Save State About $5 Million in 10 Years - Aug 28, 2003

Governor Commends Cost-Saving Measures

BATON ROUGE, La. – A new effort by the University of Louisiana System could save the public more than $5 million in natural gas and utilities at eight universities over the next decade, an energy consultant told the UL System panel today.

The Board of Supervisors for the UL System hired TME Energy Services of Little Rock to find ways to trim energy costs at the eight UL System universities. Collectively, the universities spend about $23.1 million per year on natural gas and electricity, an amount that has escalated some 20 percent over the past year.

The effort is part of a broader cost-saving initiative by the UL System. Last year the System and its universities began exploring other System-wide purchasing options in areas such as student health insurance, equipment maintenance contracts and bulk purchasing of supplies and equipment.

These preliminary efforts, along with the energy program, are expected to save the state at least $900,000 per year. The System is also pursuing computer software licensing agreements that could mean substantial savings to UL universities.

"This is the kind of progressive thinking that all state agencies ought to be entertaining. I’m proud of them," Gov. Foster said.

Tim Staley, Vice President of TME Energy Services, said his company will help the UL System better manage energy costs through leveraged purchasing, rate optimization, billing audits and comprehensive energy cost reduction programs.

"Our experience with universities and governmental agencies indicated that this kind of program would yield significant savings for the UL System," he said.

The UL System Board initiated the program as a way of managing energy costs and saving taxpayer dollars.

"Our universities are major energy consumers, so they are particularly susceptible to the types of volatile energy prices we’ve experienced in recent years," UL System President Sally Clausen said.

TME Energy Services, which was awarded a contract in a competitive bid process, has held similar contracts with state agencies in Louisiana, Mississippi and Arkansas. Savings in the Arkansas System universities amounted to about $2 million annually. Additionally, TME has identified about $1.2 million in annual savings for other Arkansas state agencies since mid 2001. "With this program, the UL System is leading the way for other agencies in reducing energy costs," TME Energy Services President Alan Hope said.

UL System Board members said they were encouraged by the prospect of energy savings, especially in this time of tight budgets.

"TME has already identified ways for our universities to save about $500,000 per year on energy. That fact, coupled with the firm’s proven track record in other states, indicates that savings could grow, depending on market fluctuations," said UL System Board member Robert Davidge, chairman of the Board’s Ad Hoc Committee on System-wide Purchasing.

"This arrangement will make it easier for our universities to budget their money. From a management standpoint, that’s critical," UL System Board Finance Chair Mike Woods said.

Soaring natural gas prices and their effect on the economy have become a national concern, with members of Congress and Fed Chairman Alan Greenspan addressing the issue in recent weeks. According to analysts, by the end of the year, natural gas prices could rise to about twice what they were in 2002.

The eight UL System universities are Grambling State University, Louisiana Tech University, McNeese State University, Nicholls State University, Northwestern State University, Southeastern Louisiana University, the University of Louisiana at Lafayette and the University of Louisiana at Monroe.

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For More Information Contact:
Catherine Heitman
225/342-6950

FOR MORE INFORMATION

Contact: Cami Geisman
225.219.0270  |  Cami.Geisman@la.gov


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