ENERGY CHOICES IN CAMBRIDGE, EXPLAINED

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June 5, 2018
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Here’s a breakdown of energy plans that Cambridge residents may find helpful.

When thinking of the future, many people envision a “greener” society that puts a focus on sustainability and environmental protection—and clean, renewable energy is something that both citizens and communities are thinking about.

Last summer, the City of Cambridge launched its new community aggregation electricity plan. The city switched energy suppliers from Eversource, one of the two biggest electricity suppliers in Massachusetts, to Agera Energy, a new supplier that focuses on utilizing renewable energy sources.

There are currently two plan options available to residents as part of the new Community Electricity Program. There are also numerous options in the private market for renewable energy plans. Many of these plans have cost benefits and contribute toward the demand for renewable energy, building the market for future clean energy sources. However, the options can be overwhelming for consumers. Here, we break down the basics of renewable energy plans in Cambridge.

What is municipal aggregation?

Municipal aggregation, also called community aggregation, is a process in which cities or towns opt to purchase electricity in bulk from a supplier for distribution to residents and businesses. The distributor remains the same, and electricity is delivered to customers via existing infrastructure from local utility companies. Eversource and National Grid are the two biggest utility companies in Massachusetts.

Several communities across the state currently participate in municipal aggregation programs: from Boston-area towns like Arlington, Brookline and Dedham to communities on Cape Cod such as Barnstable, Falmouth and Eastham.

Cities and towns may choose to enter aggregation programs for a variety of reasons. Purchasing electricity in bulk often results in lower rates for residential customers. Suppliers submit contract bids to cities and towns, usually at competitive rates that remain fixed for the duration of the contract. Many communities also choose to begin a municipal aggregation program to increase the amount of energy coming from renewable energy sources and push for the further development and demand for these sources.

Cambridge’s municipal aggregation plan is called the Community Electricity Program. The contract with Agera Energy offers energy that is a mix of traditional energy from fossil fuel sources and solar energy.

“The City chose Agera because the supplier offers a great price, 18 months of price stability, clear investment in local renewable energy, and a helpful customer service system to provide support to Cambridge residents and businesses,” said Meghan Shaw, Outreach Director of the Cambridge Energy Alliance, a program managed by the City’s Community Development Department.

What options are available through the City’s program?

When the City launched its municipal aggregation program, any homeowner, renter or businesses with an Eversource Basic Service account was automatically enrolled in the Community Electricity Program. This default plan is called Standard Green.

Most municipal aggregation plans are “opt out” programs. Customers remain enrolled in the Standard Green plan unless they choose to opt out or switch to another plan. Distribution is still through Eversource, but the supplier has changed to Agera Energy. Customers still receive a bill from Eversource, since the company is still responsible for distribution and power infrastructure. Even though the supplier is different, service reliability remains the same.

“There are no differences in reliability. Eversource is responsible for providing the same level of service for customers regardless of whether they participate in the program or not,” said Marlana Patton, vice president of Peregrine Energy Group, an energy consulting group the City hired to manage the aggregation plan.

What are the pros and cons of the City plans? There are no exit costs, and customers can leave their plan at any time. As previously mentioned, the energy from the plan provides 25 percent more solar energy than required by the state. What if customers prefer that more than 25 percent of their energy comes from renewable energy sources? The Community Electricity Program also offers an option called 100% Green. As the name implies, 100 percent of the energy comes from renewable energy projects in Massachusetts.

What’s the cost of these plans? One thing customers may find comforting about these options is the fixed rate. That means no price fluctuations or high electric bills when market rates go up.

“Currently, residents and businesses enrolled in both options are saving money compared to Eversource’s Basic Service rates, in effect through June 2018. Eversource’s Basic Rates cost 13.157 cents/kilowatt-hour(c/kWh), while the 100% Green Option costs 12.180 c/kWh and the Standard Green costs 10.486c/kWh,” said Shaw.

This could change, however, as the Eversource Basic Service rate changes every six months. Throughout the duration of the City’s contract, it’s possible that the Standard Green and 100% Green plans may cost more than Eversource Basic Service at certain times.

What are other options are there?

In addition to the two Community Electricity Program plans and traditional Eversource Basic Service, Cambridge residents can choose from other energy companies that offer renewable energy plans. CleanChoice Energy, Provider Power and Oasis Energy are just a few of dozens of companies offering renewable energy plans in Cambridge. These individual plans often have appealing options and rates, and provide energy from a variety of renewable sources.

For example, Agera Energy offers a Pure Wind 100% plan for individual customers, and CleanChoice Energy plans are comprised of 99 percent wind energy and 1 percent solar energy. Many of the quoted rates are currently lower or comparable to the City plans.

However, these plans are not City regulated and are individual contracts between residents and energy companies.

“The challenge with consumers choosing their own supplier is that the rates vary and can often change over their course of their contract. Some less scrupulous suppliers offer low introductory rates and then charge much higher rates after the introductory period expires,” cautioned Shaw.

There can also be early termination fees if customers want to leave the plan before the contract is up.

“In many cases, customers that sign a private contract with an electricity supplier must agree to remain with that supplier for a minimum period of time. If they try to move to another supplier or return to Eversource’s Basic Service before that minimum time period is up, they can be subject to early termination fees,” Patton explained.

What’s happening next for renewable energy projects?

The City’s contract with Agera Energy will end in January 2019, when the bidding process will begin again. Shaw said the reception of the Community Electricity Program has been positive, with few complaints. The opt-out has been low and over 600 customers have signed up for 100% Green. In addition to the community aggregation plan, Shaw said the City is also working on plans to help residents and businesses install solar-powered equipment.

“The City is currently pursuing ways to offer additional assistance and resources to help residents and businesses install solar hot water and renewable thermal heating and cooling mechanisms, like mini-split heat pumps,” she said.

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