ALBERTSON'S RENEWS ENERGY SERVICES DEAL

PATRICK SCIACCA

BOISE, Idaho -- Albertson's here has experienced a significant dollar savings in the deregulated California energy market, and the retailer recently renewed its energy-services contract with a third-party energy provider for 149 of its California stores.

The agreement comes a little more than a year after energy deregulation hit the Golden State and the retailer initialed its inaugural agreement with APS Energy, Phoenix.

The new contract, which calls for the third party to provide the retailer with energy, is an extension of an earlier agreement and is in effect through January 2000, according to Raymond Splinter, senior engineering supervisor for Albertson's.

Albertson's deal with APS provides for a consistent price structure, which directly results in lower energy-provision costs.

The retailer has seen significant energy cost savings through the third-party provider, Splinter said.

"There are significant dollar savings," Splinter added. He told SN that even with stranded costs added to the bill, there are dollar savings to be gained.

Stranded costs are expenses that public utilities are looking to recover in a deregulated environment. Stranded cost can include bond payments on power plants, decommissioning costs on power plants and any cost incurred by a utility as a result of deregulation.

"Stranded costs are just a fee, and when it's done that layer goes away," Splinter said.

Aside from purchasing and providing energy for Albertson's retail locations, the retailer can also receive energy services such as energy management, which allows the retailer to maximize energy-efficiency practices, according to a source familiar with the situation.