The Energy Consumer's Bulletin- a New England energy news blog

Why state policy should favor municipal aggregation

Posted by Larry Chretien on Monday, April 12, 2021 @ 03:21 PM

A priority for Green Energy Consumers Alliance is increasing New England’s clean energy supply while delivering lower costs to consumers. In both Massachusetts and Rhode Island, the following facts prevail about our  electricity supply options: 

  1. The Mass. Renewable Portfolio Standard and the Rhode Island Energy Standard are effective at increasing the supply of zero-emission power but are on a schedule that is too slow to reduce greenhouse gas emissions to the extent demanded by science. We need to speed things up. 
  2. A lot of residential and small business customers are getting ripped off when they choose a competitive electricity supplier on their own. They would be better off staying with their utility’s Basic Service (in Massachusetts) or Standard Offer (in Rhode Island).
  3. Municipal aggregation, or communityState of GMA Report 2020 Cover-3-1 choice electricity, is better economically for consumers than Basic Service or Standard Offer. More cities and towns are adopting what we call Green Municipal Aggregation because the model has proven to be an easy, effective, and equitable way to bring more renewable energy onto the grid. 

Exciting New Data! 

We can now present you with fresh evidence that proves an important pointstate regulators should abolish the individual market for competitive electricity supply and give consumers two simple choices – join their community electricity aggregation if it exists, or stay with their utility service. Furthermore, regulators should take steps to encourage aggregation rather than slow it down, as has been the case in Massachusetts. 

Exhibit A:  Massachusetts Attorney General Maura Healey’s Reports on Competitive Suppliers 

are consumers benefitting from competition

Attorney General Healey has commissioned three reports comparing what consumers have paid to competitive electricity suppliers to what they would have paid had they stayed on utility Basic Service. Over the last five years, consumers have paid $426 million more on electricity than necessary, an average of $85 million per year. Low-income consumers are twice as likely to pay these higher bills than other customers. 

Based upon these numbers, the Attorney General has filed legislation, which we support, that would bar electricity suppliers from signing up new customers. Municipal aggregations are excluded from the ban. We encourage you to contact your legislator to urge them to support these policies.  The bills are SD 674 and HD 1614, sponsored by State Senator Crighton and State Representative Moran. This has been reported in the Boston Globe and WBUR.

Exhibit B: Data from National Grid 

In Rhode Island, the Public Utilities Commission (PUC) is considering making some changes in how electricity customer payments are handled by National Grid when the customer’s energy supply comes from a competitive provider. (Metering and billing are always handled by National Grid).  

The PUC asked National Grid some questions about what customers were paying.  The answers from the utility were remarkably consistent with the results from the reports to the Mass. Attorney General. National Grid showed how utility service compared to competitive power suppliers and municipal aggregation over the last four years in both Massachusetts and Rhode Island. The results: 

  • Customers of National Grid in Rhode Island who chose an electricity supplier on their own paid a much higher average rate (an additional 3 cents per kilowatt hour) than customers who stayed with National Grid for what they call Standard Offer (called Basic Service in Massachusetts). For an average customer, that amounts to about $200 per year!  
  • Customers of National Grid in Mass. who chose an electricity supplier on their own paid 2.5 cents more on average than customers who stayed with National Grid for Basic Service. For low-income customers, the difference was 2.8 cents.   
  • Customers of municipal aggregations in National Grid territory in Mass. paid almost a penny less than customers on National Grid’s Basic Service.  And that data includes several communities that have significantly more renewable energy content than Basic Service. 

These findings are based on an analysis of National Grid customers only, not customers of other Massachusetts utilities such as Eversource and Unitil. But based upon the AG’s reports, we believe that the pattern is the same for the other utilities and their customers. 

What Does This All Mean? 

The data from the Mass. AG’s office and from National Grid are irrefutable. They support these conclusions: 

  • Consumers are getting ripped off by competitive power suppliers who sign up customers one at a time. 
  • Consumers in Massachusetts who were enrolled in municipal aggregation, or community choice electricity, got the best rates. It’s not that the utilities are charging too much. The utilities are not allowed to make a profit on the energy supply, just delivery. Aggregations have some advantages in the marketplace. 
  • Communities with a green aggregation program get the best of both worlds for their residents; they support more renewable energy at lower cost.  

Despite all this information, the Mass. Department of Public Utilities (DPU) has been slow-walking applications by cities and towns for municipal aggregations. In many cases, communities have had to wait for over a year for approvals of plans that are almost identical to 150 other such plans already approved by the Mass. DPU.  

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Today, there are several communities in Massachusetts waiting for DPU approval, and many more considering whether to submit plans for approval. Given the new information from the Attorney General and National Grid, you would think the Baker Administration would offer more supportespecially because quite a few of the aggregations have plans to include more renewable energy than required by state law.  Massachusetts has a new climate law and a new Clean Energy and Climate Plan, both of which call for substantial commitments to renewable energy. Aggregations are handing a gift to the governor on a silver platter.  

In Rhode Island, aggregation is advancing steadily. Communities are lining up to get into the game. Hopefully the Rhode Island Public Utilities Commission will see the value that aggregation brings to consumers and to the Ocean State – again, especially considering the fact that Rhode Island just passed the Act On Climate. 

aocrally-jpgWhat can you do? 

  1. Protect consumers from paying millions extra on electricity bills. We encourage you to contact your legislator to urge them to support SD 674 and HD 1614, sponsored by State Senator Crighton and State Representative Moran. The bills would ban competitive suppliers from selling electricity to individual consumers.
  2. Help create a plan to deliver more renewable energy at lower rates. Contact us if you are interested in your community developing an aggregation plan. Reach out to larry@greenenergyconsumers.org in Massachusetts or priscilla@greenenergyconsumers.org in Rhode Island. 

Tags: Massachusetts, Green municipal aggregation, Rhode Island

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