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Public Works, Energy & Utilities Electric aggregation touted as method for savings
A major provider of alternative energy is promoting “municipal electric aggregation” as a means of giving cities and towns more clout when they negotiate with utility companies.
A representative from Florida-based NextEra Energy Power Marketing, the nation’s largest provider of solar power and the owner of the Seabrook Nuclear Power Plant, described the potential cost-savings during the Sept. 14 meeting of the MMA’s Policy Committee on Energy and the Environment.
The practice, enabled by state legislation in 1997, is being used by the Cape Light Compact, which serves 200,000 customers in 21 towns on Cape Cod and Martha’s Vineyard. The Hampshire Council of Governments recently petitioned the Department of Public Utilities to form a similar collaborative covering 22 cities and towns.
Four other municipalities, including Lancaster and Lunenburg, are seeking to implement such plans with NextEra’s help.
In cities and towns that have not negotiated their own contract with a power supplier, residents and businesses receive “default service” from the local electric utility. The default service is purchased for periods of three, six or 12 months, depending on the type of purchaser using the energy. The short lock-in periods leave users vulnerable if the price of energy increases.
By buying energy directly from producers, municipalities can lock in prices for years to come and enable savings for their homeowners and businesses as well, according to Lancaster Town Administrator Orlando Pacheco, a member of the Policy Committee on Energy and the Environment.
Residential and business customers are automatically signed up for the alternative program, which guarantees a lower price initially. Customers have the choice to “opt-out” of the program, however, and remain with the traditional suppliers. New residential and business customers would still receive their utility bills from companies such as National Grid, which would continue to provide the electric delivery service, and call them for service.
Public Works, Energy & Utilities Electric aggregation touted as method for savings
Electric aggregation touted as method for savings
A major provider of alternative energy is promoting “municipal electric aggregation” as a means of giving cities and towns more clout when they negotiate with utility companies.
A representative from Florida-based NextEra Energy Power Marketing, the nation’s largest provider of solar power and the owner of the Seabrook Nuclear Power Plant, described the potential cost-savings during the Sept. 14 meeting of the MMA’s Policy Committee on Energy and the Environment.
The practice, enabled by state legislation in 1997, is being used by the Cape Light Compact, which serves 200,000 customers in 21 towns on Cape Cod and Martha’s Vineyard. The Hampshire Council of Governments recently petitioned the Department of Public Utilities to form a similar collaborative covering 22 cities and towns.
Four other municipalities, including Lancaster and Lunenburg, are seeking to implement such plans with NextEra’s help.
In cities and towns that have not negotiated their own contract with a power supplier, residents and businesses receive “default service” from the local electric utility. The default service is purchased for periods of three, six or 12 months, depending on the type of purchaser using the energy. The short lock-in periods leave users vulnerable if the price of energy increases.
By buying energy directly from producers, municipalities can lock in prices for years to come and enable savings for their homeowners and businesses as well, according to Lancaster Town Administrator Orlando Pacheco, a member of the Policy Committee on Energy and the Environment.
Residential and business customers are automatically signed up for the alternative program, which guarantees a lower price initially. Customers have the choice to “opt-out” of the program, however, and remain with the traditional suppliers. New residential and business customers would still receive their utility bills from companies such as National Grid, which would continue to provide the electric delivery service, and call them for service.
Written by MMA Senior Legislative Analyst Tom Philbin
