WAMC Northeast Public Radio | By James Paleologopoulos
The city council in Springfield, Massachusetts approved a plan that advocates say could lead to lower electricity bills for residents. A draft of a long-sought “Community Choice Power Supply Program” now heads to the state for approval.
A decade’s worth of discussions and planning came to a head Monday night, as the council approved a plan that could lead to the city negotiating on behalf of residents and entering into contracts with power suppliers for lower rates.
Tina Quagliato Sullivan, the city’s Director of Disaster Recovery and Compliance, outlined the “Community Choice Power Supply Program” before the city council Monday night.
The plan aims to potentially reduce rates by bringing together the buying power of Springfield’s over 155,000 consumers while negotiating.
“Once we get approval, then, our consultant on the city’s behalf would go out to the marketplace, attempt to look what the rates look like,” she said. “At that point, the city can decide whether the rates are favorable or not to residents, and determine whether it’s appropriate to move forward.”
The plan arrived before the council after a period of public review. Officials hope that by diversifying the city’s power suppliers and introducing competition, costs could be driven down.
Customers in Springfield currently get their power from Eversource, or negotiate on their own with private suppliers. With the program, residents would automatically be opted into the aggregation plan, which would mean getting power from a supplier the city has negotiated rates with.
Eversource would remain the delivery provider, with residents also able to opt out of any city contract without penalty and resume service with Eversource.
With no opposition voiced Monday, the council approved sending the plan to the state’s Department of Public Utilities for consideration – a process the city says could take six months.
Among the vocal supporters for the measure is City Council President Mike Fenton.
“Springfield has seen other municipalities across the state get involved, and get involved successfully in delivering reduced rates to customers,” he told WAMC in a phone interview. “We finished our vetting process and ultimately concluded that it was something that would be in the best interest of our ratepayers and taxpayers. And so, as those successes have been studied, we’ve found that savings are generally somewhere in the range of, I believe, 5-8 percent for communities that have done this historically, and there’s some empirical data to support that.”
Fenton tells WAMC that community choice aggregation has been pursued by Springfield for at least the past decade, advocated by past councils and residents.
In that time, he says, aggregation plans and programs have gone from being a relatively new concept to a tool that has yielded positive results for communities.
He added that the city has already diversified its own power suppliers by going out and “competitively sourcing the electricity providers” for municipal buildings and streetlights.
“And we found success with that program,” he added.
Another goal of the plan – weeding out predatory third parties that try convincing residents to switch electricity suppliers with false promises of reduced rates.
“You get a letter in the mail or you get a solicitation at your door, and it’s a salesperson for electricity – saying, ‘Aren’t you sick of your Eversource bill? It’s so high.’ Well, you know, every person who gets that question is going to say, ‘yes,’” Fenton said. “’We can help you get electricity from a different supplier from a different source, and over time, we expect that we’d be able to return savings to you.’ Well, there’s no guarantee of those savings and in a lot of cases, residents can go through switching their supplier, and actually end up getting charged more money than if they had just stuck with Eversource.”
Quagliato Sullivan addressed the same issue during Monday’s meeting.
“The state and the Attorney General have called out some of those practices as somewhat predatory,” she said. “The goal here is to try and minimize the number of residents that are entering into predatory agreements by providing choices and options that have been vetted by professionals that have experience, and that are not out to enter into predatory contracts with residents.”
Ward 6 City Councilor Victor Davila expressed concern over customers who might be confused by automatically being included in the aggregate plan and needing to opt-out.
“I’m looking at this from the consumer side, because I’m thinking of the elderly, I’m thinking of people who are going to be confused naturally with this, and I would hate to see a scenario in which somebody ends up in a higher rate, when they could automatically benefit from the lower rate.”
Addressing the councilor was Mark Cappadona, president of Colonial Power Group, which has been working with Springfield on the plan.
“We would never start a program that had a rate above basic service,” he said. “This is a fantastic chance to be a Monday morning quarterback – it’s very simple, we wouldn’t start the program. I just want to make sure that I’m clear – that doesn’t mean six months from now, when the basic service rate may have dropped, you might be slightly over that rate or what have you – it happens, it does happen. But someone could opt out at that time.”
A version of Springfield’s Community Choice Power Supply Program can be found here.