Community Choice Electricity Aggregation Plan
In an effort to both lower the cost of electricity bills as well as introduce green power options into our energy supply, the City of Somerville proposed the creation of a citywide electricity bulk buying program known as community choice aggregation. Also referred to as municipal aggregation, such programs allow cities to pool the citywide energy buying power of all interested customers in the city to obtain community-wide benefits.
The objective of municipal aggregation is to lower electricity bills through the formation of a buying group composed of residents and businesses without interfering with the level of service provided by the existing utility (Eversource in Somerville), which will continue to distribute the electricity supply. In addition to lowering and stabilizing electricity prices, aggregation can be used to increase the amount of renewable energy in the community’s energy supply.
Municipal aggregation was created under Massachusetts General Laws Chapter 164 Section 134. More than 60 cities and towns in Massachusetts—including Brookline, New Bedford, Salem and Winchester—already have active electricity aggregation programs, and other nearby communities are actively pursuing similar programs—including Woburn and Stoneham. In October 2015, the Board of Aldermen authorized the creation of a community choice electricity aggregation plan in Somerville.
Somerville’s program employed a procurement process designed to maximize savings and provide a full set of consumer protections, including the right for any customer to opt out of the program at any time at no charge.
Disclaimer: A goal of the CCE program is to produce savings for customers, but savings cannot be guaranteed compared to the utility’s basic service rate which changes every three months for industrial customers and every six months for residential and small commercial customers. The Aggregation program seeks to provide price stability and average savings over the full term of the program, but because future basic service rates are not known, there is no guarantee of savings.
After accepting public comments, receiving approval by the Board of Aldermen, and undergoing review by the Department of Energy Resources, the City of Somerville filed the proposed plan with the state Department of Public Utilities (DPU). The DPU approved the plan in April 2017. This document is available below and at the City Clerk’s Office located in City Hall, 93 Highland Ave.
The Department of Public Utilities held a public hearing on Wednesday, September 14, 2016, to receive comments on the proposed municipal aggregation plan.
The Plan details the organization and operation of the aggregation program in accordance with the statutory and regulatory mandates that require the Plan to:
- Detail the process and consequences of aggregation
- Provide for universal access, reliability and equitable treatment of all classes of customers
- Achieve a price for energy that either will
a) not exceed the price of Basic Service currently offered by the local distribution company (LDC – Eversource), or
b) may exceed the price for Basic Service due to the purchase of renewable energy
- Automatically enroll all customers currently on basic service, but allows them to opt out or leave the program without penalty at any time
- Provide that participation by any retail customer shall be voluntary
- Explain the operation of the program, including:
a) An organizational structure of the program, its operations, and its funding
b) Rate setting and other costs to participants
c) The methods for entering and terminating agreements with other entities
d) The rights and responsibilities of program participants and termination of the program. The Plan also includes a public outreach and education effort through which the City fully informed all ratepayer classes in advance of their impending automatic enrollment, their right to opt out without penalty at any point, all charges and fees, the LDC’s basic service rate and the goals and expected benefits of the aggregation program. The Plan was developed in consultation with the Department of Energy Resources and was made available for public review and comment. Following authorization by the Board of Alderman and the Mayor, the Plan was submitted to the DPU for review and approval.