The energy aggregation has accepted a bid for with a clean energy supplier that is expected to lower residents’ rates as well.
COURTESY OF AMERICAN POWER ASSOCIATION

BY JAIMIE JULIA WINTERS
winters@montclairlocal.news

The community energy aggregation Montclair joined last summer, as part of an effort to seek cleaner energy at lower rates, has chosen a supplier.

Maplewood, the lead town in the six-town community energy aggregation, voted to approve  the third party power supplier, Direct Energy Services, LLC, last Tuesday, April 2. The contract will begin in July and will run for 17 months at a rate of 11 cents per kilowatt per hour.

Residents here should soon get notification about the new supplier in their mail.

Montclair has teamed up with Maplewood, South Orange, Millburn, Glen Ridge and Verona to bid on behalf of 53,000 households for a cleaner energy source. The group, the Sustainable Essex Alliance Energy Procurement Cooperative, is now one of the largest community energy aggregations in the state.

The 1999 Electric Discount and Energy Competition Act deregulated the energy market with the intention of bringing energy choice to New Jersey ratepayers.

Instead of PSE&G giving all customers the same default rate and energy source, energy deregulation encourages competition by giving customers a choice when it comes to who supplies their natural gas and electricity.

Maplewood, the lead agent, asked for Requests for Proposal on March 5.

SAVINGS

The group had been looking for supply rates at least 5 percent lower than the current rate and to be at 40 percent renewable energy. Montclair is currently at 17 percent clean energy.

At the April 2 meeting in Maplewood, officials said Maplewood residents were expected to save $140 on average a year, and the energy supplied would be 40 percent sustainable.

Montclair officials did not answer a request for details on how much Montclair residents were expected to save, but it is expected to be inline with Maplewood, according to officials.

Gabel Associates, hired as a consultant, was hoping to go out to bid in the fall and have bids back in December, but decided to wait until energy rates went down. Gabel was not confident the group would receive acceptable rates, said Gray Russell, Montclair’s Sustainability Officer.

At the time, Russell said homeowners were expected to save about $100 a year on average, or about $1 million for Montclair overall, through the aggregation.

The New Jersey Division of Rate Counsel and the New Jersey Board of Public Utilities reviews the contract ensuring that what is claimed to be renewable is clean energy.

In New Jersey, if the switch is to more renewable energy, the program doesn’t have to necessarily save money. But “we are looking to get savings for residents,” Jesse Castellanos of Gabel Associates told Montclair Local when the group first formed last summer.

Currently, Montclair households can pick their own energy suppliers, and many already do in order to get cleaner energy, but it’s usually at a higher rate.

When the Montclair council voted on joining the aggregation, council members William Hurlock and Robin Schlager voted against the ordinance to join the aggregation, expressing concerns that rates could rise at a later date.

Montclair’s 70 municipal energy accounts are already part of an aggregation through the Essex-Hudson Regional Cooperative Purchasing System. It consists of 40 towns that have lowered energy costs by about 13 percent with 25 percent renewable energy.

WHAT’S NEXT

Residents are automatically enrolled in the aggregation.

Each resident will receive a written notification informing them of the price, the comparison to the utility price and their right to opt-out.

After a number of years, it was recognized that an “opt-in” approach put such a burden on the programs that none got off the ground, and the model was changed to “opt-out” only for residential customers.

Households currently with a third-party energy provider will not be enrolled. They can wait for their contracts to end and then enroll in community aggregation, or break their current contracts, which could entail fees. Solar households will not be enrolled.

PSE&G and Jersey Central Power & Light will still provide services and residents will still receive their bills through them. In the case of a power outage, PSE&G or JCP&L will still be the utility to notify and will respond to repair lines and service. Any resident enrolled in equal payment plans can continue to do so.

The contract would allow for a non-variable rate for the entire term. The rates could go up with an increase in transmission rates, but must be approved by the State Board of Public Utilities.