Community Choice Aggregation Proposal For Haverhill/MVPC. Leo D. Sullivan

Transcription

1 Community Choice Aggregation Proposal For Haverhill/MVPC Leo D. Sullivan 1

2 Objective of Presentation To discuss the opportunity to lower the electric power rates for the entire City community by 7-10% (excluding customers on supply) through competition, while increasing the green portion of that electric power. 2

3 Strategy: 1. To ascertain viability of objective, authorize Global to analyze load data & solicit sample indicative quotes from sample of suppliers. 2. Majority vote of City Council & Mayor s approval to authorize aggregation (G.L. c.164 & 134a) 3. Execute Community Choice Aggregation Plan. 3

4 Community Choice Aggregation A huge new opportunity for greener, lower energy costs in an otherwise volatile energy market. 4

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6 Massachusetts Law: Allows municipalities to aggregate their communities to be served by Electric Service Providers (ESPs). Provides opportunity for ESPs to break into MA electricity market to serve towns or cities with bulk power services + energy efficiency programs. 6

7 Mass General Law 164 sec 134 Section 134. (a) Any municipality or any group of municipalities acting together within the Commonwealth is hereby authorized to aggregate the electrical load of interested electricity consumers within its boundaries. A City may initiate a process to authorize aggregation by a majority vote of the City council, with the approval of the mayor, or the City manager. Two or more municipalities may as a group initiate a process jointly to authorize aggregation by a majority vote of each particular municipality as herein required. 7

8 Deregulation in Massachusetts Residential and commercial electric power customers now have ability to choose electric supplier The majority of large commercial and industrials will choose not to choose because they already served by Electric Service Providers In most states default supplier is incumbent utility MA has given towns and cities the ability to serve these customers 8

9 Deregulation in Massachusetts MA is a deregulated state that allows its towns and cities to be an aggregator of power. Individual customers are free to opt out or choose own supplier. Community will represent those who do not opt out. 9

10 What will aggregation mean? Aggregation creates community pools of electricity customers large enough to command leverage on the market & with sufficient legal authority & financial flexibility to demand contracts from energy suppliers that satisfy local economic and environmental goals. Places authority in hands of those who will feel impact of their decisions, thus making investment in renewable electricity more likely. 10

11 Global Electric Power Brokerage Who we are: Global Partners LP A Waltham based Fortune 500 Public Company, with 75 years energy experience the Northeast. On NY stock exchange [GLP] with $15 Billion in sales. [ ] Global Montello Group Corp. Wholly owned subsidiary offering customized electric power procurement & management services. (Awarded over two hundred electric power procurement RFP s over last 9 yrs.). What we do: Achieve the most competitive electric power costs for our customers. Work as an independent & unbiased representative of the town s residents. 11

12 Global Electric Power Brokerage Competitive Advantages: Guidance in contract terms to meet specific needs, term length & save customers time & expense Develop customized plan & strategy to establish future price objectives Procurement process provides significant savings due to identification of dramatic & volatile price swings Winning supplier pays Global nominal, predetermined volumetric transaction fee. 12

13 Global Electric Procurement Value Proposition Independent & unbiased company Extensive network of electric power suppliers Agreements in place with largest & most active electric suppliers in marketplace Relationships plus bidding process provides our customer base ability to receive the most comprehensive and transparent pricing of electric power...following chart portrays price range of quotes of actual bidding session + range of quotes & savings 13

14 How can difference in supplier bids impact your cost? (Actual example) Cost of ElectriCity $420,000 $400,500 $87,500 Difference from Highest/Lowest Bid $393,000 $362,500 $332,500 $362,500 $393,500 $400,500 $420,000 $300,000 $250,000 $200,000 $332,500 Supplier A Supplier B Supplier C Supplier D Supplier E Bids: $.0665 $.0725 $.0786 $.0801 $.0840 Example of Annual Costs for 5 Million kwh Electric Customer 14

15 Community Choice Aggregation Target Market % of kwh in MA not Purchased from Competitive Supplier by Category: Residential 87% Small Commercial 60% Medium Commercial 40% Large Commercial 11% Source: Massachusetts Department of Energy Resources January

16 MA Residential Customers Purchasing Electric Supply from Competitive Supplier Cape Light Compact City of Marlborough Town of Ashland Town of Lunenburg Town of Lanesborough Total Served by Community Choice Aggregators 200,000 HHs* 14,903 HHs** 5,794 HHs** 3,478 HHs** 1,106 HHs** 225,281 HHs *Cape Light Compact Website **City Data 16

17 Community Choice Aggregation in MA* Cape Light Compact Marlborough Lunenburg Lanesborough, Ashland *Mass DOER 17

18 Advantages of Community Choice Non Profit Non Discriminatory Subject to DPU approval after consultation with DOER Subject to Ethics and Open Bidding Laws Subject to local consumer control Can attract businesses to community due to lower electric power rate. 18

19 Advantages of Community Choice Cont. No Penalties for consumers: they can opt-out Town/City can set its own energy goals No tax dollars used. No need to add staff No Cost To The City 19

20 Estimate of potential Haverhill City residents savings to be put back into the local economy 9,500 kwh (Avg. annual usage by residential utility customer [EIA]) X23,737 (# Haverhill HHs [CityData Website] 225,501,500 Residential kwhs 96,643,500 Est. kwh Commercial/Industrial (est.30% of total) 322,145,000 Total Est. kwhs X $0.01 (Est. diff. Choice Aggregation vs. utility rate) $3,221,450 Ann. Est. Savings on electric power by Haverhill residents to be put back into local economy $3,221,450 Potential Ann. Savings on Electric Power 20

21 Estimate of potential Merrimack Valley Regional savings to be put back into the local economy 9,500 kwh (Avg. annual usage by residential utility customer [EIA]) +23,737 (# Haverhill HHs [CityData Website] +5,118 (Amesbury HHs) +7,913 (Newburyport HHs) +16,885 (Methuen HHs) +3,689 (Andover HHs) + 9,943 (N. Andover HHs) 67,285 Total Residential HHs X 95,000 kwh Avg. 639,207,500 Est. Annual Residential kwhs 273,946,071 Est. Annual Commercial/Industrial kwhs (est.30% of total) 913,153,571 Total Est. kwhs X $0.01 (Est. diff. Choice Aggregation vs. utility rate) $9,131, Ann. Est. Savings on electric power by Regional residents to be put back into local economy $9,131, Est. Potential Ann. Savings on Regional Electric Power 21 21

22 (sample Web page) The City of Haverhill Has Negotiated Lower electric rates for its residents and businesses*! Did you know that the Commonwealth of Massachusetts has created the Community Choice Aggregation program? What does this mean to you, a resident or business owner of Haverhill? It means lower electric rates! What is Aggregation: Energy aggregation is the process in which energy is sold to consumers who have joined together as a group (the residents and businesses of Haverhill*). By buying large blocks of energy, aggregation groups can reduce a supplier s marketing and administration costs, thus giving the aggregated group greater buying power. The reduced costs are then passed on to YOU, the Haverhill resident or business* as savings to your electric bill.

23 Steps to implement plan: 1) Authorize Global to analyze load data and solicit sample indicative quotes from sample of suppliers (no cost to City) 2) If viable, authorize Global to execute Aggregation Plan 3) Majority vote of City Council to authorize aggregation (G.L. Ch ) 4) File plan and related documents with MA DPU 23

24 Cont. 5) Upon approval, solicit final pricing offers from Competitive Suppliers 6) Execute Electric Service Agreement (ESA) with supplier 7) Commence local marketing/pr/education efforts 8) Manage opt-out process 9) Interface with supplier & utility to manage enrollment of participating customers 24

25 Thank you! 25