Massachusetts Governor Paul Cellucci signed the nation’s first community choice legislation in 1997. Massachusetts is also home to the country’s oldest municipal energy aggregator (MEA), the Cape Light Compact, which also launched in 1997.
In late 1994 State Senator Mark Montigny (D-New Bedford), co-chair of the Joint Committee on Energy, introduced a Competitive Franchise bill (S.447, 1995) to allow local governments to create “Consumer Service Districts” that would procure electricity for their residents using a competitive bidding process. His bill was based on concepts that were the brainchild of CCA pioneer Paul Fenn. After nearly three years of debate and revision, the Utility Restructuring Act of 1997 was signed into law.
MEAs in Massachusetts are initiated by municipal elected bodies. Aggregation programs must be developed in consultation with the Department of Energy Resources and approved by the Department of Public Utilities. As in other states outside California, most of the Commonwealth’s aggregators focus on rate savings rather than environmental benefits.
Commonwealth law prohibits a profit mark-up on the energy supply portion of utility services. As a result, Massachusetts electric utilities have not opposed MEA formation.
According to the Metropolitan Area Planning Council, MEAs offer three tangible benefits to communities besides less expensive electricity.
- A municipality can choose to receive a fee from the supplier that can be dedicated to funding energy efficiency or renewable projects, such as the purchase and installation of high-efficiency streetlights or solar photovoltaic panels.
- If a municipality chooses to collect the Systems Benefit Charge for energy efficiency (0.25 cents/kWh), it will gain control of the funds to run its own energy efficiency programs. To date, only the Cape Light Compact has done so.
- Communities with MEA can easily obtain data on residents’ aggregate energy use, which is useful for energy efficiency and climate change planning purposes. Communities without MEA find it difficult to acquire such data from investor owned utilities.
- Cape Light Compact provides MEA services to Aquinnah, Barnstable, Barnstable County, Bourne, Brewster, Chatham, Chilmark, Dennis, Dukes County, Eastham, Edgartown, Falmouth, Harwich, Mashpee, Oak Bluffs, Orleans, Provincetown, Sandwich, Tisbury, Truro, Wellfleet, West Tisbury, and Yarmouth.
- ConEd Solutions provides MEA services to Burlington and the cities that participate in MASS CEA. (ConEd Solutions was purchased by Constellation in mid-2016.)
- Connecticut Municipal Electric Energy Cooperative (CMEEC) provides MEA services to Tewksbury.
- Constellation Energy Power Choice, Inc. provides MEA services to Auburn, Winchedon and to MunEnergy (see below).
- Constellation New Energy provides MEA services to Melrose.
- Hampshire Power provides MEA services to Ashby, Cheshire, Clarksburg, Dalton, Florida, Haverhill, Lancaster, Lenox, Lowell, Marlborough, Monterey, New Marlborough, North Adams, Sheffield, Tyringham, West Stockbridge, and Williamstown.
- Peregrine Energy Group provides MEA services to Chelmsford, Greenfield, Natick, Salem, Swampscott and Westborough. It has aggregations in development in Acton, Bellingham, Cambridge, Foxborough, Grafton, Lexington, Nantucket, Sutton, and Walpole.
- MASS CEA, a division of Good Energy, provides MEA services via ConEd Solutions to Attleboro, Acushnet, Carver, Dartmouth, Dedham, Dighton, Douglas, Dracut, Fairhaven, Fall River, Freetown, Marion, Mattapoisett, New Bedford, Northbridge, Norton, Plainville, Rehoboth, Seekonk, Somerset, Swansea, Westford, and Westport.
- MunEnergy aggregates municipal governments’ electric loads in more than 120 cities and towns.
- TransCanada Power Marketing provides MEA services to Methuen.
- Verde Energy provides MEA services to Adams, Ashland, and Lanesborough.
CURRENT AND EMERGING ISSUES
Members of the legislature have expressed interest in the potential of MEAs to lead in renewables procurement and energy efficiency programs. The Commonwealth’s ambitious Green Communities Act (2008), top energy efficiency ranking by the ACEEE, and vigorous pursuit of rooftop solar and offshore wind development create a context for the expansion of clean power procurement by Massachusetts MEAs.
Some towns are participating in, or considering, Green Municipal Aggregation programs, which are described on this page of the Mass Energy Consumers Alliance’s web site. In a nutshell, participants in Green Aggregation programs purchase Class I RECs in an amount equal to 5% of their energy usage. There is a modest price premium for this level of renewability. Some Green Aggregation programs also offer customers the option to purchase enough Class I RECs to offset 100% of their usage.
In Melrose, one of the first communities to start Green Municipal Aggregation in January 2016, the default option is called “Melrose Local Green” which includes 5% more Class I RECs than the Massachusetts RPS requires at $0.09616/kWh. Customers can opt up to 100% Class I RECs with the “Melrose Premium Local Green” product at $0.13216/kWh (a $0.036/kWh premium) or opt down to an offering called “Melrose Basic” that provides only the RECs required by the RPS for $0.09416/kWh (a $0.002/kWh savings).
- The Renewable Portfolio Standard for new (Class 1) resources is 15% by 2020, rising by 1 percentage point per year thereafter.
- The Cape & Vineyard Electricity Cooperative was formed in 2007 as a sister agency to the Cape Light Compact for the stabilization of electricity rates and the development of renewable generation.
- By 2016 the Cape & Vineyard Electricity Cooperative had installed 32 solar PV projects with 28 MW of capacity to serve its customers.
LEGISLATION (Partial List)
- The Utility Restructuring Act of 1997 created the possibility of retail choice through municipal aggregation and through market aggregation. See General Law Chapter 164, Section 134.
- The goal of the Green Communities Act of 2008’s is to help Massachusetts cities and towns find clean energy solutions that reduce long-term energy costs and strengthen local economies. See General Law Chapter 169.