The Saugerties Town Board recently applied to be part of community choice aggregation (CCA), a system designed to reduce energy costs through large-scale purchasing, offering economies of scale and a stronger bargaining position. On December 7, Jeff Domanski, the executive director of Hudson Valley Energy, outlined the CCA program for the village board. Domanski’s company is local agent for Joule Energy, which negotiates with power providers to get the best price for its customers through group purchasing by municipalities, offering economies of scale.
“In the late 1990s New York, along with many other states, broke up the power monopolies, separating the generation of electricity from its delivery. This has resulted in a marketplace with dozens of companies with whom you can engage in a contract for electricity,” Domanski said.
Trustee Jeannine Mayer said she had been told by town officials that the village, as part of the town, would be automatically enrolled in the program. Domanski said he believes the village, as a separate entity, would have to apply on its own.
For people unwilling to go through the proposals of many energy production companies, New York allows the utility supply companies to make the choice for them. The distribution company — in this area Central Hudson — may not make a profit on the sale of power; it simply arranges the distribution for the customer and a power producer, Domanski said.
Domanski said people go into the energy marketplace either to try to get a lower cost or to get electricity from a cleaner source. However, the two aims are incompatible, as it is generally more expensive to produce energy from renewable sources than from burning fossil fuels, he said.
What’s different about community choice aggregation is that it gives consumers the ability to form a “buying club,” increasing their bargaining power because they operate as a large group negotiating together, Domanski said. “CCA makes it possible for municipalities to bargain on behalf of their constituents for better prices while opting for companies that produce power from renewable sources.
“Communities aggregate together to get that leverage, to get another choice for electricity supply,” Domanski said
The private electricity marketplace has been very good for some people, but many people have bad experiences because the market is complex, confusing and frequently changing. Community choice aggregation allows cost savings, environmental benefits and consumer protection. “It is a state-regulated program overseen by the Public Service Commission,” Domanski said. “There is a requirement to be a resource for the community, for community trust building, so it is not something that just happens without public awareness.”
Domanski said there were no long-term contracts, but customers of the local utilities were automatically enrolled in the program, They had to opt out.
Joule Energy would not replace Central Hudson as the delivery company, Domanski said. “This would be a line item change in the supply section of their Central Hudson bill.”
Mary O’Donnell of the Saugerties Conservation Advisory Commission said small businesses, as well as households, could join this program.
“When the town passed its local law, it just says ‘we’re exploring this, we’re going to look at CCA,’” said Mayer.
A local law expressing an interest in joining the program would be the first step. The next step would be to select an administrator for the program.
Joule is working with 16 communities in the Hudson Valley, and more than 40 around the state.
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