Covington is exploring the long-term power deal so that the city would no longer have to buy power off the market, which fluctuates like any commodity market, Meecham said. For the last several years, Covington has had an energy shortage and has had to buy power from different sources to cover the shortage, costing the city more money. Energy prices have decreased as the economic recession has worsened, so signing a long-term contract now could result in savings down the road, even with the yearly increases built in due to inflation, he said.
Mayor Carter said the deal would not lower resident's utility costs, but it would stabilize costs, because the price would be locked in a set rate.
Meecham recommended buying 5 megawatts from each provider because there is a benefit to having diverse energy sources. Meecham said the city may still need to buy power from the market during peak usage times, like the summer, but the city will have to buy less power and the prices are expected to remain low for at least the next year as energy usage remains relatively low. This is also why Meecham recommended the city only purchase 8 megawatts for 2010 to save money.
Meecham said the city does not want to have excess power, because it would be difficult to sell and would cost the city money. If Plant Vogtle is delayed the city can renew the power contract at a higher cost in 2016. The city will decide who to buy power from in the coming weeks.