MILLVILLE — City officials said they expect to cut municipal government electric costs by more than 12 percent annually under a new power contract that starts next month.

The savings are the result of a reverse energy auction held in October, they said.

The auction resulted in a three-year contract with Constellation NewEnergy Inc. that will reduce city government’s electric bills by more than $76,000 annually, local officials said. The city spends more than $619,000 on energy costs each year, they said.

“The savings the city of Millville received as a result of this auction benefit our residents,” Mayor Tim Shannon said. “By reducing the city’s energy costs, the city realizes cost savings and prevents unnecessary taxes on residents.”

This is the second time the city participated in a reverse-energy auction.

The last auction occurred in October 2010, resulting in the city’s electric bill decreasing by more than $375,000, local officials said. Those savings remained in place for two years, they said.

“The City Commissioners look for opportunities to achieve cost efficiencies within our operations,” City Commissioner Joseph Derella said. “We were extremely pleased with the results of the pricing received in our first action in 2010, and we are ecstatic that we were able to reduce costs even further.”

Officials here said part of the contract with Constellation NewEnergy requires that 15 percent of the electricity bought by the city be generated by renewable energy sources.

The auction was held through the firm of World Energy Solutions Inc. City officials said World Energy runs online auctions for energy commodities, including natural gas, electricity and green energy, in which suppliers bid against each other to win a customer’s business.

“The city’s energy bill is an inevitable burden that is constantly growing,” said Marci Shepard, the municipality’s chief financial officer. World Energy’s auction enabled us … to significantly reduce the price the city pays for electricity. Especially in such difficult economic times, the savings will be invaluable in helping to keep the municipal budget balanced.”

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