When Harvard buys electricity for its schools, library, Town Hall, and other buildings, it solicits bids from National Grid and other suppliers for the total amount required and signs a contract that covers them all at a fixed rate for one or two years. Now Harvard’s Energy Advisory Committee would like the town to extend its purchases to cover every residence and business within its jurisdiction.
Voters will have the opportunity to approve or reject such a scheme, known as Community Choice Aggregation (CCA), at Monday’s Special Town Meeting. Article 3’s approval would allow the Board of Selectmen to determine the electrical load of all within the town of Harvard and to negotiate a bulk rate with an energy supplier for a fixed number of months or years. Such energy-supply contracts are typically for one or two years and are “opt-out” arrangements that include everyone in a town who does not explicitly ask to withdraw from the plan.
Proponents say that by harnessing the collective purchasing power of the town’s residents and business owners it can provide more options to consumers, including plans that make greater use of renewable energy sources such as wind and solar, at rates equal to or lower than those available from National Grid, the current supplier of most homeowners and businesses in town. A longer contract provides cost security, while a shorter term would allow the town to take advantage of lower rates should they become available.
National Grid customers in Harvard currently pay approximately 8 cents per kilowatt-hour for their electricity. Last winter, however, the rate spiked to 13 cents per kWh. In recent public sessions, Energy Advisory Committee member Eric Broadbent has said his panel expects to offer at least two options to consumers: a low-price option “that will almost certainly be lower than the current National Grid basic service,” and an option for those wishing to make greater use of renewable energy at a price “competitive with” current rates.
Harvard would not be first
Broadbent said that more than 20 percent of the towns in Massachusetts have implemented a CCA plan, including Lancaster, Lunenburg, Chelmsford, and Westford. The town of Lancaster, for example, offers three residential plans through its Choice Energy CCA: a low-cost plan, a 35 percent renewable plan, and a 100 percent renewable plan. The low-cost rate is currently 6.9 cents per kWh; both renewable rates are approximately 6.5 centsper kWh.
Harvard consumers who have already switched from National Grid to another supplier, such as Easy Energy, would not be opted-in automatically to a town CCA plan, but could choose to join. Solar Garden members who are currently supplied by National Grid would be switched automatically to the town’s CCA provider and their solar credits would continue to be applied to their bills. Any resident or business owner would be able to opt out of the plan, said Broadbent.
There are few downsides to a CCA, but the Massachusetts Area Planning Council, a proponent of such plans, has identified three:
- Higher rates: After the contract has been executed, National Grid’s basic service rates could drop below the CCA rates.
- Political fallout: Some residents and small businesses may be upset that the program is opt-out rather than opt-in. Additionally, there could be backlash if basic service rates drop below the CCA rates or the program is disbanded as a result of an unacceptably high opt-out rate when the plan is introduced.
- Administrative overhead: While brokers who negotiate CCA contracts are paid by the supplier rather than the municipality and do much of the research and paperwork for the CCA, municipal employees must monitor the brokers and deal with public response.
Months-long process
Energy Committee member Chris Roy told the Press that if the town approves Article 3, it would likely take several months to create a CCA plan for Harvard, but he believes one could be ready by January 2018. Getting there requires several steps, but final approval rests with the selectmen, not Town Meeting.
First, the selectmen must choose an energy broker, a licensed professional, to prepare a plan for the town. There are many brokers to choose from, states an Energy Committee fact sheet, “including [Harvard’s] current broker who has negotiated our municipal supply contracts.” Once the plan is developed, the Energy Committee would hold public information sessions and a hearing to gather community opinion and suggestions. The plan must be approved by the Department of Energy Resources and the Department of Public Utilities, after which the town would issue a request for proposals, choose a supplier, and sign a contract.
Once their switch to a townwide CCA plan was complete, consumers would see one small change to their monthly electric bill, which would continue to come from National Grid, the owner of the wires that distribute electricity to Harvard homes: Under the Supplier Services section of the bill, the supplier name would change from National Grid to that of the new energy supplier hired by the town.
