SOUTH SHORE – In an era of fluctuating energy prices and a growing demand for renewable sources, towns across the South Shore are increasingly exploring and adopting Community Choice Energy (CCE) programs, also known as municipal aggregation. This innovative approach, authorized in Massachusetts as one of only six states, allows local governments to take control of electricity purchasing on behalf of their residents and businesses. Currently, over 150 Massachusetts cities and towns have either instituted or are in the process of implementing municipal aggregation, with more than 40 offering "green" programs.
The push for CCE on the South Shore is evident, with communities like Abington, Rockland, Plymouth, Plympton, Duxbury, Kingston, Halifax, Hanson, Marshfield, Pembroke, Scituate, Weymouth, and Whitman either already participating or in the process of launching programs. Even Plymouth County is investigating a potential program that could serve between 250,000 to 270,000 customers across its 27 communities, though it faces unique challenges due to its unprecedented scale and the fact that 21 communities already have their own plans.
What is Municipal Aggregation?
At its core, municipal aggregation enables a city or town to combine the purchasing power of its residents and businesses to buy electricity in bulk from a competitive supplier. This differs from residents and businesses purchasing directly from a competitive supplier or their default distribution utility (like Eversource or National Grid).
It's crucial to understand that this program only affects the supply portion of your monthly electricity bill. Your local utility, be it Eversource or National Grid, continues to be responsible for delivering electricity, responding to power outages, maintaining the grid, and sending you a single, unified bill. This means there will be no change in the reliability or quality of your electricity service.
Why the South Shore is Embracing Community Choice Energy
Local government officials are increasingly drawn to municipal aggregation for several compelling reasons:
• Cost Savings and Price Stability: A primary driver is the potential for lower energy costs and long-term price stability. By purchasing electricity in bulk, municipalities can often negotiate better rates than individual consumers. For example, the Town of Halifax's program was projected to save residents and businesses nearly $80,000 annually. Weymouth's new program projects collective annual savings exceeding $1 million if most residents participate. While National Grid's basic service rates change every six months (or three months for industrial customers), CCE contracts typically offer fixed rates for much longer periods, such as Weymouth and Whitman's new 50-month contracts through December 2029, or Marshfield, Scituate, and Rockland's 36-month terms. This stability aids in household budgeting.
• Increased Renewable Energy Options: Many communities are now choosing aggregation to purchase more renewable energy beyond the state's minimum requirements. Massachusetts' Renewable Energy Portfolio Standard (RPS) mandates a certain percentage of renewable energy, which rises modestly each year. CCE contracts can demand a higher percentage, with some programs offering residents the option to "opt-up" to 100% renewable energy. This boosts demand for Class 1 Renewable Energy Certificates (RECs) from new, local facilities within the New England energy grid, supporting regional renewable projects.
• Local Control and Consumer Protection: Municipal aggregation offers towns local control to set their own energy-related goals, whether for savings, stability, or green options. It provides a town-vetted alternative to other competitive suppliers, offering a layer of protection against confusing or predatory offers. Furthermore, consultants like Good Energy or Colonial Power, who work with over 60 Massachusetts communities, assist towns in managing these programs, with their fees typically incorporated into the supplier rates rather than paid directly by the town.
Benefits for Residents
For individual residents and businesses, CCE programs offer several clear advantages:
• Potential Savings and Stability: As mentioned, programs like Weymouth's offer a "Weymouth Standard" plan at 14.249 cents per kilowatt hour (kWh), compared to National Grid's current basic service rate of 15.484 cents per kWh, translating to an estimated $74 in annual savings for an average residential customer. This, combined with fixed rates for extended periods, offers predictable monthly costs.
• Easier Access to Promoting Green Energy: Residents are typically automatically enrolled in a standard product that meets or exceeds state renewable energy requirements. They also often have the option to easily "opt-up" to 100% renewable energy products, fostering environmental stewardship. While these RECs may not necessarily mean the electrons you buy are from clean energy, it does shift the investment in new electricity generation to clean energy products, and local ones.
• Simplicity and Flexibility: For those on basic service, automatic enrollment simplifies participation, meaning no action is needed to receive the program rates. Critically, residents can opt-out of the program at any time without penalty or termination fees and return to their utility's basic service. This flexibility is a cornerstone of the programs, as emphasized by town officials.
• Existing Benefits Unaffected: Important benefits such as low-income rate discounts, budget billing, and net metering credits for solar panel owners remain completely unaffected by participation in a CCE program.
Navigating the Nuances: Potential Pitfalls and Considerations
While offering significant benefits, municipal aggregation also comes with certain aspects that residents and government officials should be aware of:
• Savings Are Not Guaranteed: Although the goal is to deliver savings over the life of the program, future savings cannot be guaranteed. Utility basic service rates change frequently, and sometimes the aggregation rate may be higher than the basic service rate.
• Opt-Out Design: The automatic enrollment (opt-out) design is mandated by state law to give municipalities strong negotiating power. However, residents who prefer to actively choose their supplier might find this approach disconcerning. Notices are mailed to eligible customers, providing details and opt-out instructions.
• Third-Party Supplier Contracts: Residents currently with a different competitive supplier will not be automatically enrolled. They should carefully check their current contract for any penalties or early termination fees before considering switching to the municipal aggregation program. It is also important to beware of "look-alike offers" from other suppliers that are not affiliated with the town's official program.
• Supplier Customer Service: Some residents have raised concerns about the customer service reputation of particular competitive suppliers, such as Dynegy, citing negative reviews, generally for their third-party supplier services. Consultants often provide a dedicated customer service line for aggregation participants to address any issues and act as an intermediary with the supplier.
• Delivery Charges Unaffected: A common frustration for residents is the rising cost of delivery charges, which are a significant portion of the bill and have more than doubled for some. It is important to remember that municipal aggregation programs only address the supply portion of the bill, and delivery charges remain under the utility's purview.
• Re-enrollment Terms: Customers who opt-out of the program and later wish to re-join, especially new medium, large, or very large business customers, may be offered a market price rather than the initial program price based on the terms with the supplier.
Overall, municipal aggregation represents a powerful tool for South Shore communities to offer their residents and businesses competitive electricity rates, price stability, and greener energy options, while maintaining the familiar reliability of their local utility. As more towns launch these programs, continuous communication, monitoring, and adaptation will be key to their long-term success.
Sources for this article include the municipal aggregation landing pages of: Abington, Duxbury, Halifax, Hanson, Kingston, Marshfield, Pembroke, Plymouth, Plympton, Rockland, Scituate, Weymouth, and Whitman. It also included articles in the Whitman-Hanson Express, Plympton-Halifax Express, the Sierra Club, and the recent Weymouth Community Forum
