Editorial: Power in numbers
In this May 8, 2010 photo, electrical power generation lines are seen below storm clouds in a rural field near Newtown, Pa. The Labor Department reported Wednesday, May 19, that consumer prices edged down 0.1 percent last month, reflecting a big fall in energy prices. (AP Photo/Mel Evans) Purchase photo reprints »
Customers of National Grid or the Western Massachusetts Electric Co. pay these utilities to bring electricity to their homes and businesses. Few may realize it, but consumers can choose sources for the power they use. It doesn’t have to be generated by those companies.
As the staff of the Hampshire Council of Governments knows, choice — and strength in numbers — can add up to real savings on electricity. It is past time for people in the Valley to secure those gains, easing family and commercial budgets and spurring economic development.
In a guest column on this page, state Sen. Stanley Rosenberg, D-Amherst, praises the emergence of what he terms “the Massachusetts electricity revolution.”
We hope people wake up to the bugle call of this uprising and join in.
Last week, Northampton became the latest municipality to join with most Hampshire County towns and cities in a project to secure lower-cost electricity for residents and businesses.
The Council of Governments holds agreements with more than two dozen communities to bargain on behalf of residents and businesses in what is known as “municipal aggregation.”
That simply means the COG is creating a large single customer base by gathering participants from different communities. It plans to use this market clout to engage in bulk purchases of electrical power at lower rates.
Study your electricity bill and you’ll see that it lists costs for supply and delivery separately. The utilities continue to deliver the power and handle customer service such as responding to power failures and handling billing.
The project needs to win approval from the state Department of Public Utilities, which received a petition from the COG more than a year ago. It faced a public hearing in August and is working through a small mountain of paperwork required, including answering 43 questions posed by the state Attorney General’s office. The COG hopes to get the program launched early next year, adding communities as it goes.
The regulatory agency should green-light this venture and let the COG move forward.
If it needs convincing, the DPUC could look at the track record of the Cape Light Compact, a municipal aggregation program already buying electricity at lower rates for residents and businesses in 21 communities on the Cape and Martha’s Vineyard.
Even though customers hold the right to select alternative power supplies through their utilities, not many do. Roughly 90 percent of National Grid and WMECO customers buy power from the utilities without expressing a preference for the type of power generation, according to Kenneth E. Elstein, the COG staffer in charge of the aggregation project.
The Council of Governments has considerable experience in electricity markets through its nonprofit Hampshire Power subsidiary. That group has helped municipalities, nonprofits and school districts save more than $1.6 million on electricity since 2006.
Hampshire Power is a player in the market and is a voting member of the New England Power Pool. That enables it to buy at wholesale.
When it goes out onto the open market to arrange for the future delivery of power, the COG will be bargaining for more than 100,000 customers. That’s enough demand to secure better prices — and the addition of Northampton increases its clout.
A bigger customer base attracts more interest among suppliers. “The more companies bidding, the more likely it is you’ll get better rates,” Elstein told us Tuesday.
The COG estimates its initial customers in the group will save up to $6 million altogether if the price it obtains with suppliers is a penny per kilowatt hour lower than what the two utilities charge ordinary customers.
The deal the Northampton City Council approved, now being reviewed by the city solicitor, calls for about half of the savings to be plowed into local electricity conservation and renewable energy projects. Residential and business customers would still save, but the city would benefit by gaining a new revenue source for projects to increase energy-efficiency — which itself saves money.
This is a forward-thinking provision, for it will help lower the overall demand for power even as it reduces the cost of the juice. It’s important to note that individual customers can opt out of the plan, which costs enrolled municipalities nothing.
Hampshire Power has done its homework and it’s time for the DPUC to throw the switch.