SALISBURY — Town officials have taken a step that could lead to lower and more stable electric rates for residents and local businesses.

At their meeting Monday night, the Board of Selectmen voted unanimously to accept the Electricity Aggregation Plan offered by Colonial Power Group of Marlborough, through its Community Choice Power Supply Program.

Through aggregation, communities can consolidate the amount of electricity used by its population — the electricity load — and have a broker seek a better rate per kilowatt-hour for their residents and businesses than is offered by large energy distributors, like National Grid.

CPG offers communities its services and acts as the agent and broker, going out for bid to energy suppliers in order to get the best price, according to Brian Murphy. CPG will also run the program, he said, all at no cost to taxpayers.

National Grid would distribute the energy to households and businesses as always, Murphy said, and would maintain power lines and handle repairs when necessary. Consumers would still be billed by National Grid, but once Salisbury’s aggregation plan is up and running, an additional line on their bills would indicate the price per kwh based on Salisbury’s electricity aggregation rate.

Consumers will be given an opportunity to opt out of the plan at the onset if they choose or at any time afterward with a simple phone call, Murphy said. They can also opt back in if they choose, and there are no fees for doing so.

Although it’s still months from being implemented due to a lengthy approval process required by the state Department of Public Utilities, Salisbury Town Meeting OK’d the notion of electricity aggregation when it approved warrant Article 22 at its meeting in May 2013.

On Monday, selectmen took the next step of approving CPG’s electricity aggregation plan, giving Town Manager Neil Harrington the authority to sign the contract. A three-week comment period comes next, Harrington said, followed by an application to the state DPU, which will hold a public hearing prior to its vote.

All this has to be accomplished before Salisbury — through CPG — goes out to bid seeking the best price per kwh for its residents. It could take until summer for bids to go out to find out what the new rate will be, Murphy said, and how long the town will “lock in” the rate with its supplier. Selectmen said they’d engage in educational opportunities with residents at that point in the process before taking a final vote to implement the program.

Others sign on

The city of Haverhill went through this process in 2015, signing on with CPG’s Community Choice Power Supply Program in March. It wasn’t until October, however, after the DPU approval process was concluded, that it went out to bid and accepted an offer by Northhampton-based Hampshire Power for electricity.

It was December when Haverhill’s electricity aggregation program actually went into effect with a rate of 9.9 cents per kwh, locked in for a full year. That’s about 3 cents less than the basic service rate of 13 cents per kwh National Grid was offering through April 2016.

With the average single-family dwelling using about 750 kwh of electricity per month, 3-cents-per-kwh can add up over the course of the year.

About 90 other communities in the commonwealth have moved to aggregate electricity, Murphy said, with CPG working as agent/broker with 35 of them. Other communities working with CPG in this region are Methuen, Haverhill and Newburyport, which signed with CPG in June. Also looking into electricity aggregation is Amesbury, Murphy said.

With a much larger population and business sector than Salisbury, Haverhill’s rate won’t necessarily be what Salisbury sees, Murphy said, and much depends on when communities seek bids and how long they lock them in, which can be anywhere from six months to three years.

Another major benefits of electricity aggregation is not only a drop in the price per kwh than that offered by National Grid, Murphy said, but also rate stabilization. Aggregation stops the current trend of extreme fluctuations in the cost of electricity within each year, which last year produced rates as high is 16 cents per kwh during cold winter months, then lower rates during other seasons.

Aggregation can also lower electric rates for small businesses, and in New England in particular, the high cost of energy can be a deterrent to businesses looking to find a home. Electricity aggregation can make communities more attractive places for new businesses to locate due to lower and more stable rates.

Electricity aggregation is one of the products of the deregulation of the electric industry, which took effect in 1998, Murphy said. Deregulation required companies either to generate electricity or distribute it to consumers, but not both.

Deregulation also provided a process for communities to consolidate their electrical loads to go out and buy in bulk through aggregation as a way to lower rates, he said, but it’s taken time to actualize.

Murphy said the first electricity aggregation program started in southeastern Massachusetts, when 21 Cape Cod communities and the island of Martha’s Vineyard combined their electrical load in a municipal aggregation program run by Barnstable County. The Cape and Martha’s Vineyard had endured some of the highest electric rates in the region for decades.

“They began the process is 2000,” Murphy said. “It wasn’t implemented until 2003, I believe.”

The Cape program required the municipalities involved to spend taxpayer dollars upfront to get started, Murphy said. Salisbury’s plan won’t cost taxpayers anything, he said, because Community Power Group provides the upfront capital needed.

Once Salisbury’s program is up and running in the months ahead, CPG will be paid one-tenth of one cent per kwh by the electricity supplier to recoup its investment and earn income. The town has no responsibility or liability for payment, even in event of the supplier’s failure to pay.



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