By Anne O’Connor
Let’s start with a simple question: Where does our electricity come from? The easy answer is: National Grid, the electricity supplier for the entire northern Berkshires area. If you look closely at your bill, however, you are likely to discover that, while National Grid is billing you for transmission, delivery, and taxes, your actual kilowatt hours are being supplied by Hampshire Power. Why?
In 1997, the Massachusetts Legislature passed an energy deregulation bill that included a consumer-friendly “Community Choice” component, allowing towns to join together to negotiate the price of their electricity. As electricity costs rose, “Community Choice” agreements became an appealing way to keep prices down. And so, last year, a number of Berkshire towns, including Clarksburg, Lanesborough, North Adams, and Williamstown, formed the Berkshire Aggregation, signing on for supply from Northampton-based Hampshire Power. Unless a customer opted out—for example, to remain with National Grid’s Basic Service, or to try a competing supplier, or to switch to wind or solar—all local ratepayers, even those with solar panels, were automatically supplied by Hampshire Power. Last year, only 3% of Williamstown residents opted out.
The first year’s contract was for 12.191 cents per kWh. Over the same period, National Grid’s Basic Service rate was 16.273 cents from November through April, and 9.257 cents from May to October. The Berkshire Aggregation gave local residents greater price stability and an overall savings on their electricity bills. And customers eligible for the 25% low-income discount from National Grid continued to receive this benefit under the Aggregation.
In late August, the Aggregation met with its consultant, Colonial Power Group, to determine a new twelve-month contract. Again with Hampshire Power, this new contract—signed by former Town Manager Peter Fohlin in August as mandated, 4–1, by the Selectboard—starts on December 1 and is priced even lower than last year, at a rate of 10.4 cents per kWh. By comparison, National Grid’s Basic Service rate is expected to be 13.1 cents per kWh from November to April. In a significant change from last year, under the new contract 90% of the Aggregation’s power will be sourced directly from existing Massachusetts small hydroelectric plants and Maine hydro power sources, with the remaining 10% covered by the purchase of RECs (Renewable Energy Certificates). RECs are a market device used to encourage the growth of renewable energy. The development of the Berkshire Aggregation’s forward-thinking contract comes as a result of the group’s commitment to renewable energy. Area residents will pay less than National Grid’s Basic Service rate for a product that comes close to being fossil-fuel free.
According to Mark Cappadona of Colonial Power Group, the Berkshire Aggregation has achieved a “highly superior” product that should attract the attention of municipalities across the Commonwealth. As he noted in an August 11 email to Aggregation members, “the Berkshires [will] receive actual hydro power for their individual load profiles. This means that the generator would be required to deliver the actual production of hydroelectricity” to Berkshires customers. This, he continues, is “a huge paradigm change from what has happened with renewable energy to this point. Normally, a retail electric supplier would take the system mix (brown power, i.e. power created by fossil fuels) and purchase RECs. . . . This new model means that the hydro power created is directly applied to the Aggregation’s load in the Berkshires.”
Residents are still free to opt out of (or back into) the arrangement at any time. Those who want their electricity to be sourced from 100% renewable energy (hydropower is renewable, but environmental advocates point to the negative impact of dams on fisheries and water flow) may select one of the two suppliers offered by National Grid from the Massachusetts Energy Consumers Alliance: New England Green Start (a mixture of renewable energy power sources, mostly small hydro) at an additional 2.4 cents per kWh above the National Grid rate; or New England Wind (100% wind) at 3.8 cents per kWh above the National Grid rate. Both are guaranteed to be 100% renewable energy. The upcharge is 100% federal-tax deductible.
Some residents may wish to opt out in search of a lower price, although competing offers should be studied carefully, as some suppliers add hidden charges or punitive clauses to their contracts that consumers are not aware of. Last year, local resident Deb Burns opted for a contract with Liberty Power that has proven more expensive than what she would have paid via Hampshire Power. She declared Liberty “a disaster” for her.
As it happens, “opting out” is the decision that former town manager Peter Fohlin took concerning the Town’s municipal services, as separate from the electricity provided to individual residents. For the fourteen-month period starting this past September 15, the Town municipal services has contracted with Direct Energy at a rate of 8.99 cents per kWh. This product will be primarily, if not completely, fossil-fuel based, as the supplier can be expected to look for the cheapest available source on the market on any given day. The deal will undeniably save money for the Town. Some will applaud Fohlin’s financial savvy and cost-cutting; others will lament his lack of environmental stewardship.
Next year, a number of other variables may weigh on the supplier choice, and the Town municipal services might consider opting back into the Aggregation. Among other things, if the Massachusetts Legislature passes a bill raising the net metering cap, the Town will be able to move forward with a municipal solar array on the landfill, reducing its overall electricity bill. In light of the substantial progress the Town has made with energy efficiency and its status as a “green community,” fossil-fuel-based electricity for Town municipal services does not make sense in the long run.