Direct Energy wins $125 million electricity contact

The Massachusetts Health and Educational Facilities Authority, which provides bond-issuing and energy services for schools, universities, hospitals, and other institutions, said it has signed a 54-month contract with Direct Energy of Stamford, Conn., to provide more than $125 million worth of electricity annually.

After seeking competitive bids, the authority picked Direct Energy, a subsidiary of British energy conglomerate Centrica, to provide electric supply from December 2006 through May 2011 for institutions that are members of the authority's PowerOptions energy buying program.

Direct Energy is replacing Select Energy, a subsidiary of Northeast Utilities Inc. which has been MHEFA's wholesale electric supplier for the last six years but was sold to Hess Corp. June 1.

MHEFA's Power Options program currently delivers about 250 megawatts of electricity, the equivalent of about 190,000 average-sized homes, and represents 9 percent of all competitively-supplied electricity sold by non-utility energy suppliers in Massachusetts.

All government, municipal, and non-profit organizations in the state are eligible to buy electricity through PowerOptions as an alternative to paying utilities like NStar or National Grid for electricity.

The authority estimates it has saved PowerOptions members $200 million over utility electric rates in the last six years.

(By Peter J. Howe, Globe staff)