COMMUNITY CHOICE AGGREGATION
Unrealized Benefits from Consumer Choice
In 1996, the New Hampshire Legislature enacted RSA 374-F, a statute which directed the Public Utilities Commission (Commission) to develop a statewide restructuring plan to implement electric retail choice for all customers by January 1, 1998. Retail choice equates to a customer’s ability to purchase electric supply from a competitive electric supplier rather than from their electric utility. The Commission issued a restructuring plan in February 1997, and the then-existing electric utilities restructured their operations (at different times and in different ways) to enable consumer choice. Deregulation was meant to bring competition to the electric industry and thereby incent suppliers to compete for consumers with better rates and innovations. Consumer choice has been a success for most commercial customers but mixed for residential and small business consumers, most of whom continue to receive default energy service from their local utility.
The challenge for many competitive electric suppliers is profitably serving individual residential or small business consumers at rates that are consistently lower than utility default service. Community Choice Aggregation overcomes this fundamental challenge because large buying groups attract robust participation from the region’s leading electric suppliers. As a result, aggregation programs can help bring the benefits of the competitive market to consumers who have been previously left out.
Community Choice Aggregation Programs
A Community Choice Aggregation Program is an optional buying group organized by a municipality to benefit electric consumers in the community. The Program enters into electricity supply contracts for “Eligible Consumers”. Eligible Consumers are residential and business consumers currently receiving default service from their local utility (e.g., Eversource, Unitil, Liberty, or New Hampshire Electric Co-op). Eligible Consumers are automatically enrolled in the Program unless they elect to opt-out. Consumers under contract with third-party competitive electric suppliers will not be automatically enrolled in the Program, though they may opt in after their individual contract ends.
The Alternative Default Service Program
In some ways a Community Choice Aggregation Program serves as an alternative default electric supply option for consumers. When a new resident moves to a town and establishes a new electric service, the resident is automatically enrolled in the utility’s default service pool. Utilities purchase default service on a routine schedule every six months regardless of market conditions. That same resident moving into a community with an opt-out aggregation program would be offered an alternative to the utility default service option, one that is instead managed strategically and in a manner that seeks to maximize consumer benefits and provide options.
Local Decision Making and Control, without the Burden
Local governments can set their own energy related goals based on community priorities and preferences, such as stable long-term rates and renewable supply options. Many programs offer optional products that consumers can opt into, typically products that include higher renewable energy content at modestly higher rates. Aggregation programs can provide the necessary foundation for municipalities to pursue local energy development projects or unique energy services.
Municipalities who work with Colonial Power Group rely on us to provide complete turnkey services, whereby we manage all facets of program design, planning, and operations. We lead consumer education and outreach activities and manage regulatory compliance. As such, our client aggregation programs create no burden on municipal staff or local budgets. Further, the program is entirely self-funded with no costs imposed on non-participating consumers. Participation in the program is entirely optional. Consumers can opt-out at any time without penalty.