WHITMAN – The Select Board on Tuesday, Jan. 23 voted to begin drafting an energy aggregation plan with Good Energy L.P., a Municipal Energy Aggregation consulting company, for a competitive energy pricing plan for residents.
John P. O’Rourke, director of marketing and municipal affairs at Good Energy LP, , briefed the board on the service before their vote, which backed up a Town Meeting vote last May in support of the pricing approach.
He said Whitman is about a year away from being approved by the Department of Public Utilities.
The goal is to provide more competitive choices and longer-term, stable electricity rates, normally contracts are from two to three years, he said, noting that National Grid, changes its rates every six months.
“Aggregation only impacts the electricity supply side of the bill, the relationship with National Grid does not change,” O’Rourke said. “The only thing that changes is the name of the supplier on the bill and the rate charged. All other relationships that residents have with National Grid now stay in place, also any low-income or discount services also stay in place – that may be important for some of your senior citizens.”
Infrastructure, administration, billing and outages or problems with service are still taken care of by National Grid, O’Rourke explained.
Good Energy LLP is a national energy aggregation firm based in New York.
“Being a national company, we have plenty of backup to our team here in Massachusetts,” O’Rourke said of the company which has 20 years of experience on the national level and combined it with local experience, entering the Bay State market in 2014. It now has 68 client communities – with 52 active plans, three that were just approved by DPU four more pending approval soon, more plans in development and two new committed clients for which they are starting to develop plans – in the state.
Several of those communities, including Marshfield, Norton, Rockland, Scituate and Carver, are located in the South Shore area.
“It recently became the largest aggregation of its kind in the country,” he said. “Good Energy is active in all states that have municipal aggregation.”
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The company does “all the heavy lifting” through the Department of Energy Resources (DER) and DPU approval process, and then monitor and manage the plan, providing officials with a portal to determine how it is functioning in real time, he noted.
Board member Shawn Kain asked about consultant fees, which O’Rourke said are 1 mil per kilowatt hour – about 1/10 of one cent per kilowatt hour – paid by the competitive supplier, not the town.
“That’s our fee,” O’Rourke said.
Kain also asked if an agreement could be amended mid-term for a better cost.
That is not allowed for, O’Rourke said, but said a town could make adjustments at the end of the term and the town picks out the plan that is most advantageous to residents. Contract renewals are begun about six months before expiration.
Select Board Vice Chair Dan Salvucci, who said he frequently seeks out more competitive rates online, how the plan is selected, and customers are informed.
“This is an opt-out plan,” O’Rourke said. “Once the plan is launched, there’s a 30-day period where the residents get a customer information letter. It explains the program and, of course, before that, there’s more information that comes out.”
Customers can either do nothing and become part of the plan, or opt out of it, which affects only those under the basic service of National Grid. It does not affect anyone who has already chosen a competitive supplier.
“They are not notified at all,” he said.
The town is provided with a matrix including three or four suppliers bidding on the town’s electricity load, and offer a grid of pricing over different time period from 12 to 36 months out. The town selects the one they feel is most advantageous to residents, who then can decide whether to opt out.
About 10 to 12 percent of most residents in any community already actively seek out alternative energy suppliers as Salvucci does.
“Most people are still on basic service,” O’Rourke said.
“I think what everybody is looking for is lower electric bills,” Salvucci said. “It’s that simple.”
Anyone who comes into the aggregation can get out of it at any time without penalty or termination fee and go back to a third-party supplier or go back to the utility, O’Rourke said. Last year, when National Grid was 33 cents per kilowatt-hour, Good Energy was in the 10 to 11-cent range.
“It was a home run during that period of time,” he said.
“It seems like your program fills in the gaps for people that are afraid to go out and look, because it’s a very scary world and there are a lot of scam artists,” Select Board member Laura Howe said, adding that she liked the fact that people could get out at any time.
O’Rourke said they also go out for bids at the most advantageous times of the year.
“We’re not going to go out to get a bid in a market that isn’t good for you,” he said. “We sit on the same side of the table as you.”
Good Energy is also researching getting into the natural gas market for customers, as well.
Board member Justin Evans, who noted he has a potential conflict of interest letter on file with the town clerk because he works for the DPU – although not on aggregation – and has asked for an opinion from state ethics, said he can be involved on the municipal side.
He said he and Town Administrator Mary Beth Carter researched the issue and liked Good Energy because of its large customer base, which can lead to more competitive pricing.
Small businesses and school districts can also be included in the aggregation and could be negotiated separately for better rates at their level, but they do not want to interfere in any relationships with municipal or school accounts unless they are approached.