STATE COLLEGE, Pa. — The Penn State Facilities Engineering Institute (PSFEI) energy team has been recognized by Pennsylvania Gov. Tom Wolf for its work in procuring third-party energy supply for the Department of General Services (DGS). The National Association of State Chief Administrators (NASCA) 2019 Innovation in State Government Award was presented to DGS for its energy supply procurement process — managed by PSFEI.
Through the use of PSFEI’s custom developed web-based Energy Risk Management Application (ERMA), DGS is able to receive price quotes and effectively analyze, evaluate and sign contracts the same day — usually within a three-hour time frame. Without the innovative approach provided by ERMA, it could take weeks or months for the commonwealth to finalize an energy supplier contract. And, when it comes to energy procurement, time is money. With energy prices subject to significant swings and continual changes throughout each day, the sooner the commonwealth can lock in good rates, the more cost savings agencies are able to achieve.
“DGS has more than 10,000 individual utility accounts across our agencies, so determining the most effective way to procure electricity and natural gas while following statutory procurement requirements can be a challenge,” said Julien Gaudion, deputy secretary for DGS. “PSFEI has helped us save a significant amount of time, money and energy.”
Since July 2017, the Invitation to Qualify (ITQ) contract structure and account portfolio management capabilities provided by ERMA have enabled DGS to eliminate 384 weeks of contract review work for management and legal personnel, according to the NASCA executive summary. As a result, DGS has saved more than $200,000 in personnel costs associated with managing purchase orders and reduced electricity and natural gas supply costs by $8.3 million.
“This award would not be possible without the hard work and dedication of both our energy procurement and IT teams,” said Devin Pennebaker, PSFEI energy procurement manager. “We normally administer around four DGS shopping events per year — two electricity and two natural gas — but there is so much work that happens behind the scenes to make our shopping events successful.”
Pennebaker said there are a number of key items that must be addressed in the weeks leading up to each shopping event. Long before bid packages are constructed, monthly and hourly data is programmatically gathered by ERMA. Using the data, accounts are grouped strategically into various packages for suppliers to bid. Then, once all information is gathered, the bid packages are entered into ERMA. The final step prior to each shopping event is for ERMA to validate the bid packages data to ensure the calculations are correct.
“ERMA’s lifeblood is a constant stream of data that comes to us from numerous sources on a daily basis,” Pennebaker said. “Nearly all of ERMA’s functions are automatic and programmed. However, when the occasion requires a deft hand at data manipulation and insertion, the IT team’s support is paramount in ensuring a successful bidding event with accurate results for our clients.”
First launched in 2010, ERMA’s functionality has greatly been enhanced since. In addition to energy procurement, the capabilities provided by ERMA include contract management, utility bill tracking, market data harvesting, bill imports/exports, manual bill entry, user/account management, automated email notification and reporting. Under the direction of Sophia Mazurczyk, the IT team is responsible for ERMA’s development, maintenance and support to ensure seamless functionality by all users.
"ERMA was developed to provide a complete, feature-rich energy procurement platform that enables our subject matter experts to advise our clients in making well-informed decisions that lead to significant energy cost savings,” Mazurczyk said. “Although our clients and staff are highly skilled using ERMA, we are always on standby to chip in and provide technical expertise when needed for such activities as reactivating email service to send out award notices, importing data, making data adjustments or handling suppliers’ access challenges.”
The next PSFEI energy procurement shopping event is slated for midspring 2020.
The NASCA Innovation in State Government Awards are the premier awards program in recognizing state government operational innovations and leadership. The nominations are reviewed by experienced state chief administrators and subject matter experts from the private sector based on innovation, ability to transfer or replicate the initiative to other state and local governments, and efficiencies created. NASCA recognized the 2018 award winners at the Institute on Management and Leadership, a premier and engaging two-day executive education program led by the Leadership for a Networked World at Harvard University. (https://nasca.org/NASCA-Events).
The Penn State Facilities Engineering Institute provides facilities engineering services, education programs and energy management to Pennsylvania state agencies, the federal government and nonprofit organizations. The organization aims to advance its customers’ facilities engineering objectives through applied research, education and innovation.