When it comes to purchasing electricity, Massachusetts residents have not done much shopping around, even though that option has been available for about 25 years. That may change in Needham, however, as the town is in the early stages of creating its own “MuniAgg,” Needham Power Choice — a municipal aggregation program that will give locals the choice to purchase electricity for their homes or businesses at a town wide group rate from a mix of sources.
The process was set in motion by a vote at the May 2022 Town Meeting. The town has since drafted a plan “to bring the benefits of renewable energy and electricity choice to its residents and businesses and to help the town achieve its sustainability goals.”
Nick Hill, a member of the Green Needham Collaborative steering committee and a veteran energy management professional, has described it as a form of group electricity purchasing that pools the buying power from residents and businesses across Needham, allowing the town to negotiate with electricity suppliers on behalf of its residents. Hill, who advises clients on energy-related issues in his day job, said aggregation could provide residents the scale and leverage benefits that generally are gained with group purchasing.
“Legally, we can’t say you will save money with aggregation,” he said. “But as a means of managing volatility, the aggregation advantage is very real and has a lot of potential.”
Hill is also a member of the town’s Climate Action Plan Committee (CAPC), which values the option to negotiate the percentage of power that is derived from renewable sources. With residential and commercial buildings being far and away the leading source of greenhouse gas emissions in Needham, a greener source of energy would contribute to a reduction of those emmissions.
Under the draft plan, Needham residents would choose from three plan tiers that will vary by percentage of renewable energy and price:
Needham Standard: This will be the default option, and resident feedback will help determine the percentage of renewables it will contain. It will have more renewables than the 26% Eversource is currently mandated to use, as the goal for this product is to incorporate additional renewable energy at an affordable price.
Needham 100% Green: The goal for this tier is to provide an option for those seeking a carbon-free option.
Needham Basic: This tier has no additional renewables above state minimum requirements and is intended to provide an option that will likely be less expensive than the other products, at least at the outset.
Pricing of each tier will be determined when contracts are awarded. All three will offer a fixed price for a term that could be as long as three years — again with individual opt-outs at any time. Hill said that, under current Eversource terms, prices change at six-month intervals, so opting in provides improved price stability.
“It’s going to keep being that way,” Hill said of Eversource’s plan, noting the dramatic price increases that occurred last winter. “They will still change every six months. So you’re being whipsawed.”
A long time coming
CAPC has identified MuniAgg as the single most impactful near-term action Needham can take to reduce its greenhouse gas emissions. The town’s work has begun, but completion could take months or even years.
It took decades to get to this point. Power purchase options have been available since a late 1990s deregulation effort that was intended to broaden the ways electricity could be bought and sold in Massachusetts.
Instead of offering just the single option of utilities such as Eversource that both produce and distribute electricity, the deregulation opened the market for the production of electricity to other energy suppliers, with distribution remaining under the purview of regulated utilities.
Consumers were no longer tied to a sole provider offering a standard price set by regulators. They could now shop for their electricity from retail sellers. In another twist, whole communities could choose to create a municipal aggregator to negotiate on behalf of all residents for its own fixed community rate. That’s the approach now under consideration in Needham.
The Select Board unveiled the draft Aggregation Plan on Dec. 5 and opened it up to a 30-day public comment period. This will provide residents the chance to influence how MuniAgg will work in Needham. This is not a vote on whether residents wish to opt in at this juncture, but rather an opportunity to weigh in on what their options will be. The town invites public comment on the program through Jan. 5.
The actual implementation of the program cannot begin until the state’s Department of Public Utilities approves Needham’s plan.
Once Needham’s plan is approved, resident participation will not be mandatory. Eversource customers can opt out of participating, but must do so affirmatively as it is an “opt-out,” not “opt-in,” process.
Individual opt-in or opt-out decisions are not final, as there are no individual contracts.
A challenging process
For all its seeming appeal, the shift away from utilities to other power suppliers has not been dramatic over the first two decades of deregulation. According to 2022 data, the electricity supply market in Massachusetts is split among three buckets:
• 2.4 million customers on basic Eversource service
• 1 million on municipal aggregation, or MuniAgg
• 400,000 purchasing power on their own through competitive suppliers
Considering that some 170 Massachusetts communities have either established MuniAgg programs or have filed with the DPU to do so, one might expect the number of customers purchasing through the aggregation model to be higher.
Some, including state legislators, attribute the gap to the failure of the DPU to process municipal applications in a timely manner. Weston, for example, has been waiting for three years for a DPU decision. Legislation has been filed to amend the program amid accusations that the DPU has been slow-walking applications through its process.
The draft Aggregation Plan is available for public review and comment through Jan. 5. It can be downloaded at the town website or a hard copy of the draft plan can be obtained from the Office of the Town Manager, located on the first floor of Town Hall.