Let's make Community Choice work
By Chris Powicki
Consumer choice has finally arrived for local residents and businesses, in the form of an electricity aggregation formed by the City of Marlborough and Colonial Power Group. This innovative public-private partnership is the first municipal aggregation created in Massachusetts since the Cape Light Compact emerged on Cape Cod and Martha’s Vineyard a number of years ago. What follows are some opinions based on my experiences as a Compact consumer and a consultant working on public interest issues within the electricity industry.
"County employees and municipal appointees make the decisions; these individuals are directly accountable to other municipal officials, rather than to voters.Like the new Marlborough aggregation, the Compact bands consumers together in an attempt to lower electricity rates. It also manages energy efficiency and green power programs and advocates at the state and federal levels. These latter areas are where the Compact has delivered its most consistent benefits to residents and businesses.
The biggest differences between the Marlborough aggregation and the Compact lie in the coverage of electricity supply agreements and in decision-making authority and accountability. The Compact negotiates contracts for all consumers - residents and businesses, as well as 21 Cape and Vineyard towns and two counties. County employees and municipal appointees make the decisions; these individuals are directly accountable to other municipal officials, rather than to voters. This situation has resulted in skewed decision-making: During 2006, for example, Cape and Vineyard residents and businesses suffered extremely high rates while subsidizing below-market rates for the Compact’s municipal patrons.
The Marlborough aggregation avoids this potential for “insider trading:” It seeks better deals only for residential and business consumers, while the city continues to buys power for City Hall and other municipal facilities under a separate contract. The mayor, acting in concert with other town officials, is authorized to approve rates and other terms for residents and businesses based on a procurement process administered by Colonial Power. If there is a problem, consumers can opt out, and they can register opinions at the ballot box.
"Compact officials have abused the privilege, keeping residents and businesses ill-informed on important issues." The Marlborough aggregation’s institutional structure should ensure that rates for residents and businesses are as low as possible. However, local consumers should continue paying attention, as state authorities have granted it the same disclosure waiver given to the Compact years ago. Compact officials have abused the privilege, keeping residents and businesses ill-informed on important issues. Most egregiously, the Compact chose not to issue an opt-out notification even when massive rate hikes were imposed and better deals were available elsewhere.
Marlborough consumers may want to require their aggregation to develop an aggressive disclosure policy and to provide opt-out notification whenever rates or other contract terms change substantially, as there may be times when National Grid or competitive suppliers offer lower rates. These measures will help ensure that residents and businesses are aware of their options with respect to price, fuel sources, and pollutant and greenhouse gas emissions.
Marlborough consumers also should be mindful of experiences with the Compact’s advocacy, efficiency, and green power programs, which have shown that aggregation can be effective agent of collective action in helping control energy bills, support renewable energy, and begin to address climate change. For example, the Marlborough aggregation could help ensure that residents and businesses reap maximum benefits from ratepayer-funded efficiency and renewable energy programs currently administered by National Grid and Massachusetts Technology Collaborative. Local consumers also may want to decide what kind of power they want to buy – whether to continue relying largely on burning fossil fuels imported from elsewhere, or whether to start purchasing more power generated by non-emitting renewable energy sources.
Marlborough is fortunate to now be a consumer choice community, to the credit of city officials and Colonial Power. It’s up to local residents and businesses to make municipal aggregation work for them, and perhaps, to set an example for others.