Northbridge, Douglas team up to save residents electricity costs

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  By Susan Spencer
  Telegram & Gazette Staff
  

  
  Posted Dec. 17, 2015 at 6:39 PM
  
  
  

  Massachusetts electricity ratepayers have had the ability since 1997 to apply the power of competition to lower their utility bills. That year the Electric Utility Restructuring Act deregulated the electricity market and allowed consumers to select who would provide their power supply.

  But it wasn't until electricity supply rates skyrocketed last winter that many communities took notice.

  In the last few weeks, residents and businesses in Northbridge and Douglas who are currently National Grid basic service customers have received cards informing them that unless they opt out within 30 days, they will automatically be enrolled in a community electricity aggregation program at an electricity supply rate below what National Grid provides.

  "We knew at the time that we were going to have high winter rates last year," said Northbridge Town Manager Theodore D. Kozak. "We were trying to save money for the town, the taxpayers."

  Northbridge and Douglas signed on with a broker, Good Energy, to participate in a group purchase with 21 other towns, most in southeastern Massachusetts. Good Energy went to bid on those communities' behalf and secured a two-year contract with Con Edison for 9.49 cents per kilowatt per hour.

  For comparison, National Grid's current supply rate is 13.038 cents per kWh. Last winter it was up to 16.273 cents per kWh, although it dropped in summer to 9.257 cents.
  

  The ability to select an electricity supplier can affect what one pays for the supply portion, which is about half of an electricity bill.

  The other half of the bill is for electricity distribution, which in Central Massachusetts is provided by National Grid, Unitil or another of a few municipal utilities. If your town's utility is National Grid, for example, National Grid will still provide distribution and service no matter who you buy your power supply from.

  The municipal or community choice aggregation program was set up in the 1997 state law to allow residential and business customers across communities to band together to buy power in large volume, which gets better rates than people typically negotiate individually.

  Cape Light Compact, set up in 1997, was the first in the state to do so, aggregating electricity purchases across 21 towns and two counties on Cape Cod, Martha's Vineyard and Nantucket. According to a state Executive Office of Energy and Environmental Affairs spokesman, the Department of Public Utilities has approved municipal aggregation plans - required to participate in community aggregation - of 72 municipalities. Of the 72, 38 communities have programs already operating and 34 have been approved this fall. There are six additional petitions pending before the DPU.

  Central Massachusetts towns that have had municipal aggregation plans approved include Ashby, Auburn, Douglas, Lancaster, Lunenburg, Marlboro, Northbridge, Westboro and Winchendon. Millbury is in the process of preparing its aggregation plan for state approval.

  The new local programs, which were vetted by committees and approved by boards of selectmen and town meeting voters before undergoing state review, have still caused confusion among residents who received the opt-out notices from their town.

  Douglas Town Administrator Michael J. Guzinski said town officials tried to get the word out over the last several months with fliers and information on the town website. Northbridge also has posted information with links to information about what the program is, opting out and other enrollment questions.

  "Some people felt this was a hoax," said Mr. Guzinski, who received more than a dozen calls. "Once they understood the program, they were happy with it."

  He said Good Energy estimates most consumers will save $100 to $200 a year, based on their usage.

  "It's a fairly flexible system we have now in favor of ratepayers," he said. "There's never a penalty for opting out. They don't have to do any of the work (to enroll) and they save a little money on their electricity bills."

  Because the programs are regulated and include strong consumer protections, ratepayers can join or leave the program at any time. They will not be charged a penalty either by the Mass Community Electricty Aggregation program, which includes Northbridge and Douglas, or by National Grid.

  Mr. Kozak said some residents didn't understand the program initially and others objected to being automatically enrolled and having to return a card to opt out. But he said the opt-out mandate was set up by the state.

  The requirement to opt out, rather than opt in to the program, makes economic sense for group purchasing, according to Stefano Loretto, business development director for Good Energy.

  He said with the opt-out requirement, at least 95 percent of eligible ratepayers participate in the aggregation because they don't have to do anything. They're just seamlessly enrolled.

  If people are required to sign up to participate, typically fewer than 10 percent do.

  "To the (electricity) supplier, that's not nearly so attractive," Mr. Loretto said. "You're not going to get that buying power."

  National Grid representative Danielle Williamson said whether customers participate in community aggregation for their supply, or get their supply from National Grid or from another third-party supplier, National Grid still handles all the service and billing issues. "We're still your service provider," she said. "You're just buying from a different source."

  National Grid doesn't make any money on the supply portion of the bill. It just passes through the cost to customers, according to Ms. Williamson.

  But what about people who have already contracted with another third-party supplier for their electricity source? Town officials, Good Energy and National Grid all encouraged consumers to read the fine print of those contracts to see if there would be a penalty to terminate early, if they want to enroll now in community aggregation.

  Residents who have questions about enrollment or community aggregation can email info@masscea.com or call 844-MASSCEA (627-7232), or contact Con Edison at (855) 788-9885.