Consumer Advocate Calls for 'Time Out' for Three Towns' Community Power Aggregation Programs

The Office of the Consumer Advocate asked the state's Department of Energy and Public Utilities Commission on February 13 to pause the implementation of Community Power Aggregation programs in three municipalities that planned to begin serving customers on March 1.  At issue are the town of Jaffrey, Milford, and New Boston.

"Each of these towns submitted a Community Power Aggregation plan to the PUC and each got approval, as required," said Consumer Advocate Donald Kreis.  "But each of these plans affirmatively stated that the program would not launch unless it were able to offer customers a rate that is lower than the one available from the local utility."

Jaffrey, Milford, and New Boston are all located in the service territory of Eversource, which as of February 1 offers a default energy service rate to residential customers of 8.285 cents per kilowatt-hour.  Each of the towns intends to begin providing electricity to customers within their borders on an opt-out basis at 10.586 cents, according to information available on each town's web site.

Pursuant to the state's Community Power Aggregation statute (RSA 53-E), cities and towns have the authority to become, in effect, the default electricity provider within their borders.  Dozens of communities have chosen to go this route over the past year, and all have designed programs that operate on an "out-out" basis -- meaning that, when the program launches, customers taking default energy service from the utility are automatically switched to the aggregation program unless they affirmatively indicate they do not want to participate.

"I appreciate the fact that when Jaffrey, Milford, and New Boston arranged for their wholesale power purchases, the Eversource default energy service rate was above 10.586 cents," said Kreis.  "But I cannot ignore the fact that each town promised the PUC it would not launch an aggregation program unless it could beat the utility's default service rate -- and that simply is not happening here."

Kreis noted that the law does not require, and customers should certainly not expect, that municipal aggregation programs will automatically offer the cheapest electricity available.  He urged customers to keep an eye on the default energy service rate offered by their utility, rates made available from competitive suppliers, and the rate offered by their municipality if they reside in a community with an aggregation program.

"No municipality -- including Jaffrey, Milford, and New Boston -- can guarantee customers will always save money by participating in community power aggregation," said Kreis.  "But a promise is a promise -- especially when the promise has been blessed by the regulator.  And it is not fair to raise the price of electricity for thousands of people by more than two cents a kilowatt-hour when that is exactly what you told the PUC you would not do when you launched your aggregation program."

Via a formal complaint filed with both the Department of Energy and the PUC, the Office of the Consumer Advocate asked the two agencies to conduct a formal investigation and put the aggregation programs on hold prior to any customers being automatically switched away from Eversource's default energy service.  To the best of the OCA's knowledge, no other Community Power Aggregation programs in New Hampshire are in the same situation -- launching at a price higher than the utility's default energy service rate.