as reported by M. M. Tirion
Most of us in North Country pay National Grid for our electricity without further thought. However, National Grid does not generate the electricity we use: National Grid’s business in the USA is only the transmittance and delivery of power to customers. It purchases the electricity it needs to deliver to customers from the electricity wholesale market known as NYISO. More than 400 power-generating businesses, from hydrodams, nuclear power plants, natural gas/fossil-fuel plants, to wind and solar farms, sell their power to this wholesale market (1). Utilities like National Grid, Central Hudson, NYSEG, Con Edison and RG&E buy their electricity here and transmit and deliver this power to our homes. For a few fees.
Since the deregulation of the energy market in 1998, every NYer has been free to purchase her/his electricity from any supplier. Few have exercised this freedom, as the energy market is very confusing. Occasionally we receive in the mail invitations to use local suppliers but few feel emboldened to accept such invites, with the result that the hoped-for competition in the “retail” energy-market never materialized. Yet the government of NY is committed to a zero-emissions electricity sector by 2040 and a 70% renewable energy generation portfolio by 2030 (2). How to reconcile these two opposing trends: a retail market that does not encourage competition and a mandate that requires the entry of lots of renewable resources into our energy grid? The latest effort is Community Choice Aggregation or CCA.
Community choice aggregation permits a community (village, town or city but not a county) to negotiate, as a group, directly with energy suppliers instead of accepting the utility’s pricing scheme. National Grid, not being in the power-purchasing business, buys and sells its electricity with no markup: National Grid does not make a profit on the purchase and sale of electricity. However, if our electricity is said to come from Niagara’s hydropower dam and not from Massena’s hydropower dam, then we suddenly pay quite a bit for transport fees, as Massena Electric Department can attest (3). Or if a utility makes unwise purchase agreements with suppliers, then customers can suddenly see a 10-fold increase in the cost of electricity, as Central Hudson customers recently discovered in the Hudson Valley region (4). Choice in suppliers and fixed, agreed-upon rates extending over agreed-upon time-periods (1-3 years typically) are the primary reasons to switch to a CCA.
To adopt a CCA format, our village would have to pass a local law permitting such activity. The adoption of this law permits, but does not require, the municipality to adopt a CCA format. If adopted, the municipality would solicit offers from companies that specialize in implementation of CCAs, like Joule Assets or Good Energy. These professional administrators would provide the village with contract-offers of so many cents/kWh over the term of the contract. The rate will depend on the type of restrictions requested: How much power should be sourced locally or derive from renewables or from legacy sources like hydro? If the village board accepts one of the offers, everyone in the municipality (with a few exceptions) will be enrolled in the CCA. Everyone has the choice to opt out…or to opt back in if they change their minds.
Would customers notice any change in their service or prices? Not unless they’re very attentive. All billing continues to come from National Grid, with one additional line to source electric-usage. What about the municipalities? Will they have to hire specialists or ask their staff to learn new skills or even answer the phone from customers? No, the administrator-agency replies to customers and files all paperwork. For their service, the administrator- agency receives a small cut on the total energy supplied to the community (in March of 2021 Joule charged communities at the rate of $0.0008/kWh (5)). Line breaks and other service interruptions continue to be serviced by National Grid. So far, most municipalities that have adopted this format report satisfaction and some have already renewed their contracts.
(1) nyiso.com/faq HowhaveNYISOmarketschangedtheelectricindustryinNY?
(2) www.nytimes.com/2021/11/29/nyregion/hochul-electrical-grid-climate- change.html
(3)www.massenaelectric.com/businesscustomer/greenpower.htm#:~:text=Almost%20all%20of%20the%20power,utilities%20in%20New%20York%20State%20.
(4)www.nysenate.gov/newsroom/in-the-news/james-skoufis/state-sen-skoufis-leads-probe-new-york-utilities-pricing-surge
(5)https://villagemusings.org/wp-content/uploads/2022/06/86c94-jouleccaannualreport2020.pdf
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