MBTA banking on $25M in energy savings
PHOTO/SAM BONACCI
Boston-bound commuters wait to board a train at Union Station in Worcester. A new energy deal could help the embattled transportation provider to save millions.
The MBTA expects to save $25 million in electricity costs over the next five years.
The MBTA is contracting with BP – the energy company pilloried for the Deepwater Horizon oil spill in 2010. The other bidder was Shell, according to MBTA spokesman Joe Pesaturo.
BP, which is also the current vendor, gave the best price at $46.35 per megawatt hour, about 5.3 percent less than the T expected back in October and a savings of $19.37 from the current contract. The deal kicks in Jan. 1.
According to Pesaturo, the T is paying about $20 million this year, a cost that will drop to about $14.1 million in 2016.
Both the current and future contracts cover about 70 percent of the T's electricity needs with the rest of the power purchased on the fluctuating "spot market." The T spent $6.5 million on the spot market and the standard retail market in fiscal 2015, and the T anticipates the costs in that market decreasing as well.
"The MBTA took full advantage of current market conditions. Electricity rates are consistently tied to natural gas prices, which have been dropping. Economic forecasts show the prices are expected to remain favorable," Pesaturo said.
The MBTA is considering retirement incentives, holding back on hiring and other measures to confront an estimated $242 million deficit in fiscal 2016. The Transportation Committee chairs have suggested the state would be willing to cover that shortfall at the transit agency.
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