Something remarkable happened when the Sustainable Westchester team working on the community choice energy aggregation program opened the energy supply bids from leading energy service companies last month.
Clean energy won BIG!
In February 2015, the New York State Public Service Commission approved Sustainable Westchester’s petition to pilot a municipal energy aggregation program in Westchester County with an order that enabled this first-in-New-York effort.
What is a community choice or municipal energy aggregation program?
In states with deregulated energy supply markets, energy service companies m
ay sell electric or gas supply to consumers. New York deregulated about twenty years ago. About seventy energy service companies are authorized to sell supply as a commodity to New York customers. Some are more scrupulous than others. Acquiring retail supply customers one at a time is expensive for the supply companies. As individuals, customers have no bargaining power with the suppliers.
When all the homes and small businesses in a city bid out their combined electric supply together, suddenly, economies of scale help both the customer and supplier reduce costs and increase rate choices. Community choice programs have been commonplace and successful in six other states, but now for the first time, in New York State as well.
Ever since the February order, the Sustainable Westchester’s team hit the road to visit with dozens of city, town and villages all across the County. Municipalities that were interested in joining the aggregation program needed to adopt local legislation enabling them to proceed. Benefitting from great pro-bono advisers, the team prepared draft legislation and resolutions to assist the municipalities.
Next, the team pre-screened energy service companies to identify those that best fit our criteria, such as transparent business practices, good customer service, creditworthiness and ample experience supplying community choice aggregation programs in other states. In addition, the team developed a comprehensive Electric Service Agreement with ample protections for the municipalities and consumers and worked with attorneys from twenty municipalities to finalize all the language.
The Westchester Power Program introduced a few conditions that went well beyond the February Order to benefit the consumers. First, the energy bid required that bidders accept the Electric Service Agreement terms and conditions verbatim. Second, bidders needed to provide a basic supply rate for a fixed period of no less than 24 months that would be lower than the benchmark of the average 2015 basic supply rate from the default local distribution utility (ConEdison or NYSEG). Third, bidders needed to provide a 100% renewable energy supply rate as well for that same period. Fourth, bidders had to allow individual customers in a participating municipality to leave or enter the program or switch between the two rates with no added fees or penalties.
By the time, the team sent out the Request for Proposals to the pre-screened supply firm, over 110,000 homes and businesses in twenty cities, towns and villages were included as potential customers. This buyers group represents four out of ten county residents, a remarkable feat of collective action all by itself.
The day the bids were opened led to a startling realization that both the basic supply rate and the 100% renewable supply rates were below the 2015 benchmarks from ConEdison and NYSEG.
“Suppliers who really wanted to enter the New York aggregation market stepped up,” notes Glenn Weinberg, the lead consultant. “In the end, buying 100% renewable energy green supply for the next two or three years will cost less than buying the basic, brown supply last year.”
By the time the program goes live in May, over 70,000 homes and small businesses will be buying 100% renewable energy supply in the fourteen cities, towns, and villages that chose to make that option the default for their jurisdiction. These customers “going 100% green” represent three out of ten county residents and, astoundingly, two-thirds of the entire 110,000 consumers in the program.
“Collectively, our consumers choosing the green option will buy 650,000 megawatt-hours per year of certified renewable energy credits,” states Leo Wiegman, Sustainable Westchester’s Executive Director, “That amount is the energy output equivalent to adding 84,000 residential solar systems in the county overnight.”
“Our instant market for clean, non-fossil, non-nuclear energy supply is the largest collective action in New York to date to address climate change and create real market demand for clean energy.” concludes Weinberg.
For more information, visit www.westchesterpower.org.