Cheaper, greener power coming to New Paltz

There is a change coming to how electricity is supplied in New Paltz, and it is expected to bring down the cost and the carbon footprint for nearly everybody in town. What’s most remarkable is that, for most ratepayers, nothing need be done to experience these benefits. Hudson Valley Community Power representative Jeff Domanski explained this at an information session on June 27, and he also dug into the details for those interested in how the program will work.

The plan is called community choice aggregation (CCA), and it’s a way to pool the buying power of residents to negotiate rates and sources with electricity suppliers. State legislators made this possible in 2016 with an eye on increasing green power by creating a demand for it, but saving money is a consequence as well. Behind the scenes, the process is enormously complicated: first came the enabling legislation by town and village board members, then they had to select an administrator from a very short list. That designation goes to Joule Community Power and naming Joule triggered a process of public information including this session and an upcoming mailing. Thereafter, prices for 100% green energy and for the least-expensive “brown” alternative will be sought, and most people in town will get the green energy option as of September. New Paltz is also joining other communities that use Joule in what’s called Hudson Valley Community Power in a consortium, and the information piece is being managed by Domanski, whose firm is called Hudson Valley Energy.

Compared to what’s going on in other states, Domanski calls this a “simple, beautiful model.”

“Choice” is part of the name of this model, and Domanski is aware that people in New Paltz like to have a choice. Electricity is not garbage, however, and CCA is not very similar to the garbage plan now in effect in New Paltz. CCA deals only benefit people who do not have a contract with a third-party electricity company. Since the 1990s it’s been possible to buy power directly from energy service companies, but most people do not. Instead, their electricity is purchased on the spot market because Central Hudson is not, by law, a producer of electricity. Electricity bills have two parts: distribution — that’s the Central Hudson piece — and supply. Purchasing from an ESCO hits the supply line on the bill, but most people simply don’t bother and take what they get. Under CCA rules, that do-nothing option becomes the green plan, which by all accounts will still be cheaper than the brown energy most people now consume. The distribution fees charged are set by state regulators.

Therefore, the first choice is to use an ESCO. Anyone under contract remains under contract, and anyone can enter a new contract whenever they wish. The mailing to be sent out will lay that out, as well as providing several methods by which to opt out of cheaper, greener power even if one does not have a standing arrangement. One way to opt out will be by selecting the second CCA alternative, the least costly. In communities further along in this process, the brown option is fractions of a cent less than the green per kilowatt hour. However, it’s hoped that the savings from existing bills will be enough to convince most people to participate in green power, dropping an economic barrier to environmental change. However, up until now some people have been willing to pay a premium for greener energy; this means that they will continue to pay higher rates under those contracts even if they are getting energy from the same company as their neighbor who participates in the CCA instead.

In Westchester, where the average rate paid was 6.87 cents per kilowatt-hour, the green alternative came in at 6.36 cents and the brown option at 6.08 cents per kilowatt-hour. Suppliers who offer these rates are not guaranteed any participation and use typical opt-out rates to inform their bids, but 110,000 do in Westchester (95% on the all-green option), for a savings to-date in excess of $17 million. “There will be many people who won’t even know this program is happening,” Domanski said.

Domanski explained that CCA rules also can help address an unintended consequence of energy deregulation in the 1990s: sometimes, people signing up with an ESCO find it’s hard to get out, and the prices advertised often don’t last. CCA contracts are with municipal governments, not with residents. Consumer and environmental protection are baked into the same state law.

The mailing will provide details on how to opt out right away, but the CCA deal will be in effect for two years and opting in or out will continue to be available throughout. After two years, the process of selecting a supplier for the two fixed-rate options and the process of public engagement begins again. If it’s decided not to continue with a CCA, all the users simply revert to brown Central Hudson power at higher rates.

Expect a letter from the mayor or town supervisor explaining the details; that should be mailed in July. That begins a 30-day opt-out period before the cheaper rates and cleaner energy kicks in for everyone else. Do nothing, and suffer the consequences: cheaper electricity that does less harm to the planet.