By Suzy Enos
Community Choice Aggregation (CCA) provides the ability for a community to buy electricity in bulk at cheaper rates than individuals can get on their own. In 1997 Massachusetts was the first state to pass a law to allow this bulk buy capability and six other states have since followed suit.
To understand the benefits of CCA, it may be helpful to first look at how electricity is delivered.
As electricity consumers, we have a relationship with Eversource, the electric utility that serves Bedford. But Eversource does not make the electricity, they buy it from energy generators. Those generators could produce their electricity with coal, nuclear power, solar energy or other means. Eversource buys electricity from those generators and sells on to the consumer. Eversource is responsible for the maintenance of the power lines and customer services activities such as billing and account support, but no electricity generation.
When you get a bill from Eversource, you can see this structure in the invoice.
The charges are broken out by delivery and generation. Eversource is paid for delivery – the cost of maintaining the energy grid. The generation charge reflects the portion of your bill that will go to the electricity producers.
On the sample bill, you can see that this ratepayer has chosen a specific electricity supplier – Viridian.
Today, most businesses and some residents choose to get their electricity from a specific generator for two main reasons:
- Cost – if you use a large amount of electricity, you can negotiate a better rate
- Source – you can choose how your electricity is produced, for example, by choosing renewable sources
Larger businesses regularly contract with an electricity generator to get a cheaper price. One study in Lexington found that 86% of businesses had chosen this path.
Wouldn’t it be nice if the average consumer could take advantage of that kind of leverage?
This is the intent of the Community Choice Aggregation legislation. It allows a municipality to negotiate on behalf of the community, with the negotiating power of the whole community’s electricity demand. Residents and businesses have an opportunity to review the details – price, source, length of contract – before the Selectmen sign the contract. Anyone can choose to opt out. Anyone who already has an electric contract with a supplier (like in the sample bill) will be opted out automatically. All other residents and businesses in the municipality will be switched over to the new plan.
There are approximately 40 communities that are active CCA participants with another 35 or so that are applying to be part of a CCA program. In Dracut, Town Manager Jim Duggan expects average users will save $150 to $175 per year. Chelmsford went live with CCA on February 1, 2016. They have two offerings – one at a generation rate 29% below the basic rate and a renewable energy option at 20% below the basic rate. Lowell has opted for 100% green power and residents will see savings of 8-10%.
How can Bedford get lower electricity rates and cleaner energy? Tune in for Part 2: Bedford and CCA!
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