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Editorial: High stakes for Hampshire Council of Governments

These hanging planters in front of the Hampshire County Courthouse are among those tended by the Northampton Business Improvement District.
KEVIN GUTTING

These hanging planters in front of the Hampshire County Courthouse are among those tended by the Northampton Business Improvement District. KEVIN GUTTING Purchase photo reprints »

There’s little doubt the Hampshire Council of Governments has a proven track record in helping municipalities, schools and other small entities save money and provide services. With no tax dollars or state funding and the inability to bond or borrow money, the council’s $5 million annual budget is supported solely by membership dues, program fees, grants and, perhaps most importantly, earned revenues.

So when the council’s best revenue-generating program — Hampshire Power — failed to save a majority of its customers money last year, alarm bells rightly began to ring in the council’s executive offices at the Hampshire County Courthouse in Northampton. Hampshire Power has helped more than 100 municipalities, nonprofits and school districts save $2.1 million on electricity since 2006.

The alarm sets up what may be the most critical decision in the council’s 15-year history.

Over the last eight months, council leaders guided by Executive Director Todd Ford have taken a hard look at Hampshire Power’s operations and come to a conclusion: Without drastic changes, the council might watch local customers walk away for more enticing, money-saving deals offered by national energy companies.

That in turn could put a significant dent in the council’s ability to offer all sorts of programs for its 15 member communities and for other groups and individuals that aren’t members but use its services.

So they devised a plan to restructure its power program, opting to hire a third-party consulting firm with the technical expertise to run Hampshire Power and expand its offerings.

These experts are trained to track energy markets, analyze data, manage risk and make recommendations aimed at saving customers money, particularly the 85 percent of customers who buy power based on the council’s popular real-time model. Under this model, customers’ power rates are set each hour based on the wholesale price of electricity.

Historically, the council has saved its customers significant sums of money with this model. But it is not risk-free. When the savings began to shrink a few years ago, that set in motion the restructuring plan now on the table.

The plan makes sense, especially having a team of experts on hand to gauge and make energy market predictions.

This advice, above the level of expertise on the council’s staff, might have been helpful last winter when an increase in restrictions in the natural gas supply from Canada had a negative effect on energy prices.

Hampshire Power’s fixed-rate customers may also benefit from the change, as the organization would develop its own contract plan to supply power to customers. The council now acts as a broker for customers in this plan, pairing them with power suppliers that typically offer low energy prices.

To say there’s a lot riding on this change is an understatement. We hope the effort to stay relevant in a highly competitive and complicated energy marketplace works out, especially for the sake of communities that rely on the council’s expertise and regional programs.

In addition to its electricity services through Hampshire Power, the council offers a purchasing cooperative that saves $720,000 a year by securing more than $6 million of goods and services for municipalities, school districts, nonprofits and small businesses.

The council also operates a host of regional programs for small municipalities, serves as a regional voice on a variety of big-picture issues in the Valley, offers help with sustainability and runs health and human services programs.

“We have not shifted from our primary focus, which is to save taxpayer dollars for municipalities and the public entities and to keep all of that money that we spend on electricity local and in our local economy,” Ford recently told the Gazette.

It’s a noble mission, one that we believe is good for the region.

That’s why we hope Ford’s skills as a problem-solver and the council’s willingness to shift its focus prove successful.

Can't this obsolete entity finally be taken off life support? In 1999 Hampshire County government was abolished ( two years after Franklin County). The state legislators realized there was no benefit to this structure. Then, Hampsgire got reinvented and became an electrical consolidator---a service that other groups have been providing already. The taxpayers suffer because (1) there are marginal savings now in Hampshires electric market compared to other public and private sources, and (2) the member communities spend tax dollars for their membership. Pull the plug (again)! Do not resuscitate!

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