Northampton eyes lower electricity rates in new partnership with Hampshire Council of Government
NORTHAMPTON — The city Thursday became the latest community to partner with the Hampshire Council of Governments in the hunt for lower electricity costs for residents and businesses who get their power supplied by National Grid.
In a unanimous vote, the City Council agreed to participate in the COG’s municipal aggregation program, joining 28 other communities representing more than 100,000 people.
The program’s goal is to use the combined buying power of the residents and businesses in those communities to purchase electricity on the open market at rates lower than those offered by National Grid and Western Massachusetts Electric Co., said Kenneth E. Elstein, the council’s electricity aggregation specialist.
“Our program right now will have over 100,000 people in it, which allows us to have bulk purchasing which is considerably larger than any of our communities could do alone,” Elstein said.
Nearly all of Hampshire County’s communities have signed on, as have other communities in Franklin and Worcester counties.
Northampton’s Energy and Sustainability Commission signed off on the idea, which costs the city nothing and has the potential to save individual customers money.
The COG estimates that it will save customers up to $6 million annually if the collective price is 1 cent per kilowatt hour lower than the price charged by utilities.
The deal with Northampton calls for 40 percent to 60 percent of those savings to be invested in local electricity conservation and renewable energy projects.
“The COG has been doing this for awhile,” Council President William H. Dwight said at the council’s Sept. 20 meeting. “This has become their bailiwick and the added appeal to this is all the green energy investment that we’re talking about in return.”
The arrangement only deals with the power supply portion of a customer’s bill. The utilities will continue to deliver the power and respond to all emergencies, outage calls and billing, just as they have for years.
The aggregation program will only apply to National Grid customers in the city, meaning businesses and individuals who get their power from a competitive supplier on their own will not qualify.
A small number of businesses and homeowners are now using such suppliers, but more than 90 percent of customers get their power supplied by National Grid, which acts as a default for customers who don’t choose an outside supplier, Elstein said.
The city itself would not be a part of the program, he said.
National Grid customers will have a legal right to opt out of the program if they choose, but will otherwise be automatically enrolled, Elstein said.
Elstein predicts the council will launch the program early next year assuming it wins approval from the state Department of Public Utilities. The council filed a petition for its program with the DPU in June 2010.
Two other municipal aggregators have been in place for a number of years. One of them is Cape Light Compact, which buys power for 21 communities on Cape Cod and Martha’s Vineyard. Elstein said Cape Light has achieved lower electricity prices in nearly each of the last dozen years.
The city of Marlborough adopted a similar program in 2006, and three other communities — Ashland, Lanesborough and Lunenberg — are about to flip the switch on their owner programs. Northampton customers will be able to participate in an all-green option for about 2 cents per kilowatt hour, similar to National Grid’s GreenUp program. This money would also go toward local conservation and renewable projects.
Elstein said the council is currently working on a way to fold customers who are already part of National Grid’s program into its initiative, though it’s likely those customers would need to choose that option.
In addition to Northampton, other communities that have joined the program in Hampshire County include Belchertown, Easthampton, Granby, Hatfield, Hadley, Southampton, Westhampton, Cummington, Goshen, Huntington, Middlefield, Pelham, Plainfield and Williamsburg.
Other communities in Franklin and Worcester counties are also participating.