Village considers joining a community energy program being tried in New York state
NAPLES — The village of Naples is exploring whether to sign on to a community energy program. Called Community Choice Aggregation (CCA), it’s a new way for residents to buy electricity. The idea is to save energy customers money while promoting renewable and locally produced energy.
“We are moving to a different model,” said Louise Gava, a representative with Municipal Electric and Gas Alliance (MEGA). Gava was at Village Hall Monday to explain the program and answer questions.
The New York Public Service Commission has authorized local governments to pool utility customers for energy supply. “Strength in numbers will lead to better energy pricing for all,” according to MEGA, which would administrator the program for the village.
Just a few residents attended Monday’s informational meeting but there will be more chances to learn about the program, said Mayor Brian Schenk. Before the village could join the program it would hold a public hearing and need to pass a local law to allow CCA, he said.
Gava explained how MEGA would coordinate CCA for the village, handling community education and outreach, compliance with the state Public Service Commission, competitive bidding and monitoring.
New York is the seventh state to allow such a program, which lets cities, towns and villages form energy-buying groups that automatically enroll all residents and small businesses. Consumers have the power to opt out and switch back to the local utility if they want to.
How does CCA work? Instead of buying electricity individually from a utility, consumers pay a fixed price for energy under a contract negotiated by the local buying group. Contract terms may require all or most of the energy to come from wind, solar, hydroelectric and other renewable sources. A contract may also specify reimbursing consumers for reducing energy use.
“We’re getting calls from municipalities and grassroots activists throughout New York,” said Mike Gordon, coordinator of Westchester Smart Power, launched as a pilot project in 2015 as the first community choice energy program in the state. “We are transforming the way we buy, consume and generate energy.”
Gov. Andrew Cuomo called for development of community choice programs in 2014 as part of sweeping energy reforms intended to support renewable energy development, energy efficiency and a switch from large-scale centralized power plants to a network of local generators.
Westchester Smart Power, which includes 112,000 homes in 20 communities in Westchester County, solicited bids from energy service companies to supply electricity for two utility territories in the region. Each agreed to rates below the previous year’s utility price for either 100 percent renewable energy or a mix of fossil fuels, nuclear and some renewables.
Sustainable Westchester, the nonprofit community group that launched the local energy program, said consumers are expected to save $4 million to $5 million a year in a region with some of the highest energy prices in the country. Fourteen of the 20 communities opted for 100 percent renewable energy. About 7,000 customers, or 6.3 percent, opted to switch back to buying energy through the local utility.
Under CCA, all consumers still get their bills from the utilities that collect a separate charge for maintaining the distribution system. Electricity makes up about half the typical bill.
“As an energy delivery company, we aren’t affected by our customers’ choice of energy supplier,” said Clay Ellis, a spokesman for utility NYSEG, which serves customers in Naples and other area communities.
“We do buy energy since we’re also the default supplier for many customers, but the energy supply costs we pay are passed directly through to the customer with no markup.”
In 1997, Massachusetts and Rhode Island became the first states to pass community choice aggregation laws as part of electric restructuring legislation. They were followed by Ohio, New Jersey, California and Illinois.
Communities choose to develop the programs for a variety of reasons, including saving money and focusing on renewable energy. Lower rates aren’t always possible. In Illinois, about 100 of 673 aggregation programs that were active in 2014 have now expired because a drop in prevailing utility charges made them less attractive. Others have reduced or eliminated their renewable energy options in response to lower margins of savings.
The Associated Press contributed to this report.