State Agency: Total Muni Aggregation Fees Charged To Customers Exceeds $11 Million Annually

"Magnitude Of Fees" Justifies "Further Accountability" Versus New Proposed Guidelines, Agency Says

October 6, 2023

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Copyright 2010-23 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com

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Fees paid to municipal aggregations by such aggregations' customers exceeded $11 million in 2022, the Massachusetts Department of Energy Resources (DOER) said in comments to the Massachusetts DPU

DOER was commenting on proposed DPU guidelines to govern aggregation plan filings and a proposed template plan. See background here

DOER said that municipal aggregation customer fees, reflecting adders to compensate consultants as well as the municipalities' own operational adders, were as follows for 2022:

Total Consultant Fees Paid   
      by All Customers                    $8,276,446

Total Operational Adder Fees 
      Collected from All Customers        $3,045,346

Total Muni Agg Fees Paid                 $11,321,792

Average Consultant Fees Paid per Muni Agg    $61,307


*Data from aggregation annual reports. Excludes data from 
the Town of Webster as the Annual Report was not available 
as of October 6, 2023

DOER said that the standard consultant fee is a volumetric adder of $0.001 per kWh on all electric sales under the aggregation. DOER said that several municipalities also include an additional operational adder which typically funds a municipal energy manager staff position to administer the aggregation.

"The magnitude of fees collected by consultants each year justifies further accountability than is currently provided in the proposed Guidelines," DOER said

DOER said, "In its Order, the Department states 'municipalities must ensure continuous review of each municipal aggregation Order issued by the Department to understand these developing rules and requirements,' which makes the application process more difficult, and in the Department’s opinion has caused an 'unacceptable backlog of applications pending at the Department.' DOER recognizes the extent of resources necessary in maintaining knowledge of Department precedent concerning rules and requirements governing municipal aggregation programs. Yet, municipalities entering into contracts with consultants to assist in the preparation of a Plan to be submitted to the Department presumably expect that their consultants maintain the necessary knowledge and expertise to facilitate an expeditious review. To the extent that delayed Department review has resulted from improper or error-filled Plans submitted by consultants on behalf of municipalities, the Department should consider what actions it may take to limit deficient filings from consultants."

D.P.U. 23-67

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