FY2011 House 2 Budget Recommendation:
Issues in Brief
Deval L. Patrick, Governor
Timothy P. Murray, Lt. Governor
The Governor’s fiscal year 2011 budget proposes the nation’s first comprehensive energy procurement and management system open to all public entities. Commonwealth Energy Solutions will provide energy savings for state agencies, higher education campuses, quasi-public authorities, and others. Public entities, including municipalities, in the Commonwealth spend approximately $750 million annually on energy, with over $250 million of spending in fiscal year 2008 just at the state level across the Executive Branch, higher education campuses, quasi-public authorities, and others. As a result of the Commonwealth’s high energy consumption, Governor Patrick directed Secretaries Gonzalez and Bowles to evaluate the potential to reduce energy expenditures through bulk purchasing and more active, centralized management of energy contracts.
Energy Management Initiative
Historically, estimated and actual utilities spending throughout the Commonwealth has varied due to the fact that off-budget spending in trust, capital, or federal accounts are not identified in initial projected agency spending plan submissions. Over the past three fiscal years (2007-2009), the average actual spending for both non-executive and executive branch agencies from all funding sources have totaled $246 million.
*Estimates include spending from all funding sources for both executive and non-executive branches on electricity, natural gas, heating, and fuel for buildings and vehicles.
Today, there is no single entity with the mission of driving down energy spending for public entities. Energy procurement is undertaken separately by the Executive Branch, higher education campuses, quasi-public authorities, etc, with over 15,000 electrical, natural gas and heating oil accounts in the Executive Branch alone. Aggregate purchasing options have become available for some agencies in recent years through a statewide contract for electricity managed by the Operational Services Division and through Massachusetts Higher Education Financing Authority’s (HEFA) PowerOptions program. However, substantial opportunities for savings from a comprehensive approach to energy management for all entities remains, including:
Prepared by Sarah Glassman and Chantal Mont-Louis, Executive Office for Administration and Finance ·
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