Online Auction Nets Over $2 Million in Expected SavingsWORCESTER, MA, May 18, 2007 /PRNewswire-FirstCall via COMTEX News Network/ -- World Energy Solutions, Inc. (TSX: XWE) today announced the successful completion of several online energy auctions for the State of New Jersey via the World Energy Exchange. New Jersey is the fifth state to select the World Energy Exchange over traditional energy procurement methodologies.
The state was pleased with the outcome given how capacity prices have trended significantly higher since the expiring contracts were put in place. With five bidders submitting a total of 169 bids across 24 auctions, the state was able to obtain a price 1.2% lower than its existing contract prices. The three winning bidders - Pepco Energy Services, Constellation New Energy and Hess Corp. - will supply over 581 million kWHs per year at an average price of $0.099472 per kWh.
Awarded contracts include a blend of fixed and block & index pricing to provide portfolio diversity and to take advantage of significant off-peak consumption. The auction results garnered cost avoidance savings of more than $2 million on electricity costs as compared to the state's existing contracts. The new contracts will provide price stability for state accounts for the next 36 months and fixes the new capacity charges taking effect throughout the 13-state PJM regional transmission organization.
"Pricing came in lower than expected considering the recent rise in capacity prices," said John Rhodes, New Jersey's Director of Energy Savings. "We saw a flurry of bidding activity in the final moments of the auctions, with major suppliers actively bidding against each other, giving us the best price the market can offer."
Jon Harvey, World Energy's VP Government Relationships, observes, "The New Jersey auction demonstrates that World Energy Solutions is emerging as the clear leader in state government energy procurement."
"With increasing pressure on state budgets and rising energy prices, the World Energy Exchange is proving invaluable in helping government agencies meet their energy needs as efficiently as possible, while at the same time reducing risk and promoting fair and open competition. In addition," Harvey adds, "World Energy has a protest free history for all of our government transactions."
About World Energy
World Energy Solutions (TSX: XWE) operates leading online exchanges for the energy and green credits markets, having transacted 32.5 billion kilowatt hours of electricity and 64 billion cubic feet of natural gas. The company has adapted its World Energy Exchange auction platform to accommodate the trading of electricity, natural gas, green power, fuels, and green credits.
This press release contains forward-looking statements that are subject to risks and uncertainties that could cause actual results to differ from those indicated in the forward looking statements. Such risks and uncertainties include, but are not limited to: revenue dependence on actual future energy purchases pursuant to completed procurements; changes in regulated prices or cyclicality or volatility in competitive market prices for energy which may affect demand for World Energy's services; our dependence on a small number of key energy consumers, suppliers and channel partners; factors outside our control that affect transaction volume in the electricity market; and other factors identified in our Registration Statement on Form S-1 and subsequent reports filed with the Securities and Exchange Commission.
SOURCE World Energy Solutions, Inc.
