STAFFORD TOWNSHIP --- The township has begun the process of becoming a Community Choice Aggregator of electricity.
The ordinance is scheduled to be finalized upon second reading at the July 10th meeting.
Aggregation creation is strictly regulated by the state’s Board of Public Utilities (BPU) and the ordinance is only the first of many steps in the process, said Mayor John Spodofora at June’s meeting.
During a presentation at that meeting Township Energy Consultant, Scott McFadden, of Birdsall Services Group, said by becoming an aggregator township residents could see a 10 percent or more reduction in their usage rate over what they now pay to Atlantic Electric.
In addition, the township could see additional revenue from the plan that could be used to offset property taxes or support other projects, said Mark Cappadona, of Colonial Power Group, who accompanied McFadden to the meeting. Colonial is an energy consulting group that specializes in creating and managing CCAs.
The pair also explained the process and answered questions and concerns from the council and audience prior to the vote.
They or another company will be selected to draw up a proposal after the township puts the contract for that service out to open bid. This is all the current ordinance authorizes and is required by the BPU as the first step, said Township Administrator James Moran.
Once a facilitator is selected, it would then handle all aspects of the program at no cost to the township, he added.
“The facilitator would handle all the paperwork and compliance issues with BPU, agreements with Atlantic Electric, recommending third party suppliers, registering users and the education and public information campaigns to residents and the media,” said Cappadona.
In a later interview, the two men explained in detail the process and the savings that could be achieved.
HOW IT WORKS:
The facilitator would contact Atlantic Electric and enter into an agreement where the utility would still handle the distribution of the power, maintaining and servicing the equipment, meter readings and billing, said McFadden.
“The electric bill will still come from them, but customers will see a reduction in the Supply Charges section of the bill,” he added.
That is because the facilitator will contract with a “third party supplier,” such as ConEdison or Excelon, for the long term purchase of large amounts of electricity on behalf of the township.
“As with any commodity, buying in bulk brings lower prices,” said Cappadona.
The saving are then shared by the township’s residents that participate, the township itself and a smaller percentage to the facilitator for their services, he added.
For example, the current charge per Kilowatt Hour (kWHs) on a resident’s Atlantic Electric bill is around $0.12.
By buying in bulk for the vast majority of township households, the facilitator would be able to get a much lower rate.
Hypothetically, if they could buy power for $0.08 per kWSs, each household could see their rate drop to around $0.10 with the rest of the savings going to the township and the facilitator based on the terms of their agreement, said Cappadona.
The average household usage in Stafford is 750 kWHs per month or $90, which could drop to $75 using the estimates above.
The actual rates will depend on the price the facilitator can purchase power from a supplier to be selected by the township, he added.
WHO WILL PARTICPATE:
Those bulk rates will be negotiated long term based on all of the township’s households now getting service from Atlantic Electric, said McFadden. Approximately 10 percent of Stafford’s residents have private aggregation plans leaving more than 10,000 homes eligible right now, said McFadden.
All of these households will be automatically switched over to the township aggregation and will need to “opt-out” as opposed to the opt-in method used by the private companies.
Small business will most likely have the option to join in if they choose said Cappadona.
When and if the plan reaches this point, the BPU requires the facilitator to send out a very specific notification outlining the plan, the proposed switch date and the opt-out procedure, said Cappadona. The facilitator would also be responsible to handle all inquires and concerns from residents.
The letter must come from the township on its letterhead, but the facilitators are responsible for the cost, distribution and follow-ups, he added. The entire process is provided at no cost to the township and does not require any additional township personnel to run it, said McFadden.
“The average opt-out rate we’ve seen with the towns we aggregate for in Massachusetts is 3 percent,” said Cappadona.
But the choice is entirely up to each resident if they want to continue to pay the Atlantic City Electric rate or find another aggregator.
If someone chooses to opt-out later on they would see their rate revert back to Atlantic Electric’s or another aggregator by the next billing cycle, he added.
Back at the meeting in June, Councilmen Steve Fessler said he already uses a private aggregator for now and has seen his rate drop around three cents per hour and wanted to know if this plan could match that.
Cappadona said it could be possible, but also emphasized that if at any time an aggregation plan could not match or beat the current Atlantic Electric rate the program would be suspended or cancelled.
We asked about whether those on budget payment plans would still have that option, he promised to look into it.
Later Cappadona said that Atlantic Electric would still be able to bill under a budget plan, but the final determination would be if the supplier would agree to it.
The anticipated timeline from the final adopting of the first ordinance to implementing the plan could be as little 60-90 days, said Cappadona.
It probably will not be in time to help with this summer’s air conditioning bills, but could be fully in place for next summer and next year’s township budget planning, said McFadden.