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Massachusetts Approves 10 New Municipal Aggregations, Imposes Pricing Benchmark
The Massachusetts DPU has approved 10 new electric opt-out municipal aggregation programs, and has extended a pricing benchmark to additional customer classes.
The DPU approved, with conditions, municipal electric aggregations for the Towns of Dalton, Florida, Lenox, New Marlborough, Sheffield, Tyringham, West Stockbridge, Williamstown and Clarksburg, and the City of North Adams.
According to the DPU's order, each municipality does not plan to participate in collaborative bidding or a joint procurement; rather, each municipality will procure competitive electric supply independently. Each municipality expects to select one competitive supplier for its program, for a term of two years, the DPU said.
The DPU noted that under their aggregation plans, each municipality will not execute an Electric Service Agreement with an aggregation supplier if the price for residential customers is greater than the basic service rate. However, for C&I customers, each municipality may execute an Electric Service Agreement for prices greater than basic service rates.
The DPU noted that while G.L. c. 164, § 134(a) does not include a price benchmark for the review of municipal aggregations, the DPU has previously ruled that customer classes that are similarly situated must be treated equitably. "The Department has found that residential and small C&I customers are similarly situated because both classes have limited competitive supply options. For this reason, the Department has determined that basic service should be procured and priced for residential and C&I customers in a similar manner," the DPU noted.
Accordingly, "in order to ensure that each Plan provides equitable treatment of all customer classes, the Department directs each Municipality to employ the same benchmarks for small C&I customers as it does for residential customers," the DPU directed.
Consistent with prior municipal aggregation orders and due to concerns about significant load shifts to and from basic service, the DPU directed each municipality to provide the local distribution company with (1) a 90-day notice prior to a planned termination of its aggregation plan, (2) a 90-day notice prior to the end of the anticipated term of its program's Electric Service Agreement, and (3) a four-business-day notice of the successful negotiation of a new power purchase agreement that extends the date at which aggregation participants would otherwise return to basic service.
Each municipality retained Colonial Power Group, Inc. as a consultant for the aggregation. According to the DPU order, Colonial will be compensated through a $0.001 per kWh commission fee.
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July 7, 2014
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Copyright 2010-14 EnergyChoiceMatters.com
Reporting by Karen Abbott • kabbott@energychoicematters.com
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