After lengthy discussion, the Board of Selectmen (BOS) in joint meeting with the Energy Task Force on October 6, voted unanimously to approve the Community Choice Aggregation (CCA) recommendations presented by Energy Task Force Chair Bob Zogg. The town joined an electricity aggregation program two years ago that has allowed the town to negotiate a group purchasing contract that provides 100% renewable power at a lower cost than the Eversource basic rate. Town residents are included by default, but may opt out if desired.
Zogg reminded the BOS that Carlisle’s current CCA contract expires at the end of 2020, and that bids are due to be reviewed and contracts signed on October 13. According to Zogg, it is likely Carlisle will receive more attention and better pricing if the town negotiates before larger customers like Boston enter the market. Colonial Power, the broker for Carlisle, strongly recommended getting the pricing package out to bid immediately.
Purchasing electricity for Carlisle
Sharing a slide deck via Zoom, Zogg briefly explained how Carlisle currently purchases electricity. Since 2018, Carlisle has participated in a Community Choice Aggregation program in which the town selected a default electricity supplier and locked in for 30 months at a competitive rate. Zogg cited the benefits of group purchasing including lower rates, the ability to lock-in rates for a period of time, and the ability to choose the mix of energy sources used to generate the electricity. This program only affects the supply portion of the monthly electric bill. Carlisle chose Public Power, LLC of Woodlands, Texas, as the supplier while Eversource continues to deliver electricity.
Under the existing contract, Public Power offers two products: Standard (default) at $0.10981/kWh which is 100% National Wind content, and Optional (low cost) that meets Massachusetts mandated renewable content at $0.10879/kWh. Eversource basic service averaged at $0.11643/kWh over the contract to date.
Eligible residents were given the option of participating in the CCA or continuing under the Eversource basic service plan. Based on data from the second half of 2018 and first half of 2019, approximately 70% of electricity use is managed through the existing contract. The other 30% is a combination of Eversource basic service, including customers who opted out of the CCA or were under another contract when CCA started and chose not to participate. Zogg said that 95% of those who participated were under the default option.
According to Zogg’s presentation, the current contract performed better overall than Eversource basic service, and Zogg projects that the town will save approximately 5%, or $263K, by the end of the year.
Three product options for 2021
Zogg said the Energy Task Force recommends three products for the BOS to consider, with the default option a 100% renewable energy that combines a percentage of Massachusetts Class 1 Renewable Energy Certificates (RECs) and National Wind RECs, similar to the default plan Carlisle currently uses. The second option is a 100% local renewable product, consisting of only MA Class 1 RECs. A third low-cost option also proposed would meet the minimum Massachusetts regulatory requirements for renewables. Illustrative costs for the average Carlisle home, based on 12,000 kWh/year usage, is $2,604/year for the low cost product, $2,654/year for the default 100% renewable option, and $3,204/year for 100% MA Class 1 product.
Zogg and Reed suggest that now is a good time for Carlisle to add some Class 1 RECs to the default plan. At the moment, the default plan is 100% National Wind RECs, and Zogg acknowledged that there is some debate around the relative benefit that National Wind provides, including among members of the Energy Task Force. He explained that, “on a REC by REC basis, National Wind beats Eversource every time.” On a dollars-spent basis, there is no definitive analysis, despite claims by experts on both sides to the contrary.
Zogg said that the broker can bid Carlisle’s contract using a predetermined price point, and the supplier will recommend a product that uses as many MA Class 1 RECs as possible, with the balance made up of National Wind RECs. He said that the committee suggests keeping a low cost option for those who choose or need to opt down. They also recommend the BOS consider adding a product consisting of 100% local renewables for those who want to opt up to a maximum green energy source.
BOS discuss the options
Selectwoman Kate Reid said that the current low cost option is actually a “brown energy” source, and suggested that the low cost product in the next contract be National Wind as opposed to a non-renewables option. She wondered if it would be possible to offer residents four choices. Zogg responded that it might be confusing to have that many options, and it would be necessary to clearly explain the options so residents understand the products and the differences of opinion about quality of each.
Energy Task Force member Brian Mottershead said that of 166 state programs, only five or six have four choices, and more than half offer just the default option.
BOS Chair Alan Lewis added that, given the fact that some residents may be experiencing financial difficulties now, it is important to offer the lowest cost option for those households.
Choosing an electricity supplier
BOS member David Model noted that the choices are confusing, and Zogg agreed that many residents were confused when the program rolled out in 2018. He explained that, once the town signs the new energy contract, any resident who is already getting basic service from Eversource and not on their own contract will automatically be switched into the CCA program at the default offering, unless they choose otherwise.
Zogg explained that all customers currently in CCA program or that have Eversource basic service will get a mailing alerting them to the new product offerings and explaining how to choose their energy source.
Zogg suggested that the BOS might want to consider a shorter-term contract than the current 30-month plan. He explained that the Master Plan process is scheduled to be finished by the end of 2021, so a shorter contract would ensure the town could take actions based on the Master Plan to move the town further in the direction of green energy.
Reid responded that there is substantial savings possible by selecting a 36-month contract. BOS member Luke Ascolillo agreed, and added that even if the Master Plan is ready by the end of 2021, it will still take some time to put the recommendations into place, during which time the town will continue to see energy savings at the lowest rate possible.
MA Class 1 RECs vs National Wind RECs
Reid asked members of the Energy Task Force to explain the differences between MA Class 1 RECs as opposed to National Wind RECs. At issue was the idea of financially supporting an enterprise with ‘additionality’—that would expand its capacity to generate renewable power over time, versus paying an enterprise that would deliver renewable energy, but might not expand its capabilities.
Reed responded that “there are a variety of opinions as to the true value of National Wind RECs in terms of the concept of ‘additionality.’ As we support National Wind RECs, are we actually resulting in an increase in the supply of renewable energy?” Reed said that in his research, the answer is largely no. He added there is an argument to support offering a default product that is higher than the minimum percentage of MA Class 1 Recs. He said that there is strong opinion that there is additionality “in that we are going to see an increase in the amount of local renewables.”
Mottershead countered that National Wind RECs “provide no additionality at all. The Green Energy Consumer Alliance considers National Wind RECs to be a brown option.” He continued, “So what we currently have is a brown option. If we add Class 1 RECs then it wouldn’t be brown, but what do they add,” questioned Mottershead. He said that, when you consider the price of National Wind RECs, consumers will only save about $12/year.
Mottershead added, “Another consideration against use of National Wind RECs is that it puts us at 100% in theory. If our Master Plan states that we should commit ourselves to increasing our use of renewable energy and we are already at 100% on paper, you can’t go any higher.” Mottershead’s opinion is that National Wind RECs “should play no part in any of our options. They are a waste of money and it’s actually counterproductive.”
Energy Task Force member Launa Zimmaro said, “The bigger picture view of this is that we have ‘X’ amount of money to invest in this, and if we can put our money into something that is going to directly and immediately build the renewable market in our region, that is a truer green product, and we are really doing something for the public good.” She continued, “We don’t have the luxury of time anymore and anything we can do, even as a small community, to add to actions that increase the transition to renewable, and as soon as possible, is a real benefit and something I think we need to consider.”
The BOS unanimously approved three motions in response to the presentation, the first by Ascolillo to approve the three recommended products proposed by the Energy Task Force. The second motion, presented by Reid, was to seek bids of up to 36 months, subject to review. Lastly, in light of the short window for approving contracts on October 13, the BOS approved a motion to authorize Lewis to act on behalf of board to review the bids submitted and sign the final contract. ∆