A&P OPTS FOR CHOICE IN DEREGULATED ENERGY MARKET

PATRICK SCIACCA

MONTVALE, N.J. -- The Great Atlantic & Pacific Tea Company here entered into a one-year agreement earlier this month with a third-party energy provider for most of its Long Island, N.Y. stores.

The 12-month agreement with Con Edison Solutions, White Plains, N.Y., provides energy to 35 of the retailer's Long Island stores that operate under the Waldbaum's and Food Emporium banners.

A new program from the Long Island Power Authority (LIPA) allows customers to buy electricity directly from an energy service provider. Some stores were not eligible for the program, according to the retailer.

The retailer said it has modest expectations for energy cost savings.

"The savings may be considered marginal, but savings nonetheless," said David Tomicki, corporate director of engineering and utilities for A&P, adding that the savings should increase as the competition increases in the marketplace.

"Competition will definitely breed lower pricing," Tomicki said. "I envision that over the next few years, we'll see much better pricing."

The retailer is speaking from experience, as this is not A&P's first foray into a deregulated energy marketplace.

We've taken advantage of similar programs in Connecticut, Massachusetts and Pennsylvania, Tomicki told SN. "We got involved with our first energy contract four years ago."

The retailer's overall objective is to take advantage of opportunities in a deregulated energy marketplace and cut costs for A&P, without affecting normal operations, said.

In addition to energy generation, the retailer can opt to enlist the third-party for assistance in energy management services such as managing energy costs and energy risks as well as assessment of energy solutions.

Tomicki told SN that A&P is not using the third-party provider for energy management services, but the retailer is keeping an open mind about the future use of a third-party for energy management services.

Most of the retail supermarkets are looking to better manage energy portfolio and they can realize immediate savings with a third-party energy provider, said a source familiar with the situation.