14 Franklin County towns enter new electrical aggregation contract

Utility meters on a Franklin County home. With a three-year contract about to expire, 14 Franklin County towns have entered into a new 24-month energy aggregation contract with Dynegy Energy Services.

Utility meters on a Franklin County home. With a three-year contract about to expire, 14 Franklin County towns have entered into a new 24-month energy aggregation contract with Dynegy Energy Services. STAFF PHOTO/PAUL FRANZ

By BELLA LEVAVI

Staff Writer

Published: 12-21-2023 1:58 PM

With a three-year contract about to expire, 14 Franklin County towns have entered into a new 24-month energy aggregation contract with Dynegy Energy Services.

The towns partnered with Colonial Power Group, an energy aggregation consulting firm based in Marlborough, to craft the new agreement, which will take effect in January.

Though new rates will take effect, residents will experience no noticeable changes in their electricity service itself. The new contract and the old one are both with Dynegy, which appears as the “supplier” on monthly bills. Each town’s utility company, National Grid or Eversource, will continue to serve as the towns’ electric utility, handling delivery, service and billing.

Standard rates under the new contract start at $0.142 per kilowatt-hour, with higher price points for cleaner energy options, compared to about $0.09 per kilowatt-hour from the current contract. Each town is in a specially chosen agreement with slight differences in the costs and percentage of clean energy use.

“Even though the cost of electricity has increased since the last time we were in the market, we are still able to offer rates that provide savings to start and stability for the next two years,” said Colrain Town Administrator Kevin Fox. “In addition, we are able to offer a second green product that provides residents and businesses another option to help reduce their dependence on non-renewable energy sources.”

“We see the impact climate change is having on the world and taking positive steps to reduce that impact is essential,” said Conway Town Administrator Veronique Blanchard. “Combining that with the ability to provide savings on residents’ electricity costs this winter is a win for the community.”

Through energy aggregation, municipalities enter into agreements to buy electricity on behalf of residents. Towns use energy aggregation to leverage the purchasing power of residents, allowing them to enter into contracts with electricity providers that can secure more affordable rates and cleaner energy.

“It is the opposite of third-party supply,” explained Mark Cappadona, president of Colonial Power Group. “Individual towns say, ‘These are our terms and conditions,’ and then go out to the marketplace and get bids to get prices.”

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Franklin County towns with new contracts include Buckland, Charlemont, Colrain, Conway, Deerfield, Gill, Leverett, Northfield, New Salem, Shelburne, Sunderland, Warwick, Wendell and Whately. Huntington in Hampshire County is also involved.

Heath and Orange are engaged in different contracts with Dynegy that will expire in December 2024 and November 2025, respectively.

Because energy rates get locked in when the communities enter a contract, residents have benefited from the locked-in prices of three years ago. The new contract locks in the prices for the next two years. Prices for energy in the area without an energy aggregation agreement are still higher. By comparison, Eversource’s current standard rates in Franklin County are $0.158 per kilowatt-hour.

“I think what’s great about this program is National Grid changes its rates about twice a year,” explained New Salem Town Coordinator Kathy Neal. “This program gives residents stability to know what it will cost for the next two years.”

Cappadona explained Colonial Power Group entered into a two-year contract instead of a longer one because of the current high energy prices. However, he noted rates are unlikely to go down.

“I don’t see anything in the marketplace that will drive down prices dramatically,” Cappadona said, indicating that the development of offshore wind may alter the market but that will not happen in the next couple of years.

Residents and small business owners participating in National Grid’s or Eversource’s basic service programs are automatically enrolled in their town’s standard plan unless they choose to opt out. They can opt out at any time with no penalty. In the event that energy prices decrease below what is charged under the aggregation contract, it would benefit residents to opt out at that time.

“I would like to praise the municipal officials,” Cappadona said, “for their vision and foresight to protect their customer base.”

To learn more, residents may visit colonialpowergroup.com/our-communities and select their town’s name.

Reach Bella Levavi at 413-930-4579 or blevavi@recorder.com.