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Date: 9/5/2023
WESTHAMPTON — Officials from Colonial Power Group, the consultant ushering the town’s electrical power aggregation effort through the state’s regulatory process, came before the Selectboard last week to discuss newly proposed state guidelines that may make the process more complicated and less autonomous.
Denise Allard, vice president of operations for CPG, offered an example of how the new regulations will reduce choices for residents.
“Anyone who went out last fall may have a higher renewable content than in previous contracts,” Allard said of towns with an aggregation plan in place. The new regulations limit a town’s ability to adjust that ratio of green to standard energy. “Oh, I have more than 45% of Mass. Class 1 [renewables]. Those are expensive, so I’m only going to do 20%, so I make the product a little more affordable. The DPU is trying to eliminate the town’s ability to do that.”
In electrical aggregation, the town enlists a consultant like CPG to set up the plan, submit or “hang” it with the Department of Public Utilities, confirm all the details and get it approved. Residents benefit from much greater flexibility. Under aggregation, the town may purchase electricity from many different sources, wind power from Texas, solar from Arizona, coal generation from existing plants.
Mark Cappodonna, president of CPG, thinks reducing the flexibility for towns defeats a primary purpose of aggregation: the option to buy green energy in bulk.
“They’re trying to take away a lot of the flexibility that you’re supposed to have,” Cappadonna said. “Municipal aggregation is about local control and they’re trying to take away some of that local control…We’re going to fight it all the way, to allow you to continue the way everyone else has been able to.”
The new guidelines protect providers of electricity for the basic service agreement. The new guidelines mandate that every town’s plan must include two green options, which increase the price of a kilowatt hour. That will make basic electrical service, available through Eversource, more competitive.
“They’re saying now that every aggregation has to have a minimum,” Cappadonna said. “In the past, you could decide whether you just wanted to have a meek product,” a basic service, “or two greener products. It’s the town’s decision and we believe the town should be making those decisions.”
Green energy costs more. While residents may want clean energy the town’s aggregation plan, also called an “order,” may offer fewer renewables, for a cheaper rate. The new guidelines would curtail some options at certain points in the process.
Cappodonna emphasized that some flexibilities are not changing. Individual residents are automatically enrolled in the plan, but may opt out at any time. They may also choose to rejoin the plan at a later date.
Aggregation was approved by Westhampton residents at last spring’s Town Meeting. That vote authorized the Selectboard to pursue a plan for the town. The proposed guidelines were released on Aug. 15.
Cappadonna told board members the town is still on track to get an aggregation plan approved, but the new guidelines are worrisome because “the department’s been difficult.”
“You passed it at Town Meeting,” Cappadonna said. “The Selectboard has to approve that plan. Once approved, Denise will create a file when we go to the [Department of Energy Resources]. After that we would go on to the Department of Public Utilities with this massive filing.”
Another requirement of the new guidelines is a launch window for aggregation plans. According to Cappadonna, currently towns may choose to wait as long as they want before signing a contract with an electrical supplier. Now, under the new guidelines, signing a first supplier contract has to take place within two years of approval.
If the energy markets repeat last winter’s rate spike, when the price of a kilowatt hour went to 33 cents, signing a contract with an electrical supplier could be economically unwise. The DPU, however, will punish a town that fails to sign a contract, even under unfriendly circumstances. The penalty? The town will be required to go through the approval process all over again. A second approval may only take four months, but a town will be required to wait a year before applying again.
“When these suppliers come to bid on basic service there’s a premium put on basic service pricing,” Allard said. “[That] is what they’re saying.”
While the proposed guidelines are not yet in force, Allard noted the new guidelines will also apply to active aggregation plans. She suggested towns operating in the markets for years will not appreciate changes in the system that appears to be working well.
“Municipal aggregation has been working as expected, as an alternative to competitive basic service,” Allard said. “The statute was supposed to push everyone towards competitive supplies, and it did that, and it worked. Towns are making decisions on their own. We just want to…keep doing that.”