The Saugerties Town Board has agreed to try Community Choice Aggregation — a way to stabilize and possibly reduce electricity prices — for a second time, after the first try ended after one year of a three-year contract.
Jessica Stromback of Joule Energy assured the Saugerties Town Board at its regular meeting on March 15 that the company has tightened the rules in its relationship with suppliers. During the period that Joule contracted with local municipalities, the plan saved them some $970,000 “during a time of strong market volatility,” she said.
What Stromback was seeking at the meeting was a provisional signature on a Memorandum of Understanding (MOU) that would allow Joule to seek bids on a contract specifying prices. The MOU would become full a contract only if the Town Board agreed to the proposed price, Stromback said.
The previous contract, which involved ten municipalities, was supposed to last for three years, but after the first year the supplier, Columbia Utilities, backed out of the deal. Stromback said that Joule has tightened the conditions in its proposed contracts, increased the requirements “and is limiting possible participation to the larger and most experienced providers in the United States.”
One advantage of Joule’s system is that customers are free to drop out at any time on a month’s notice, Stromback said. But should a customer who dropped want to come back in, they can do so, noted Saugerties supervisor Fred Costello. He recalled that when electricity costs spiked, many people who had not originally signed up for Community Choice Aggregation wanted to join the program, and they were able to. Later, “If some of them wanted to drop out, that’s okay,” he said, “whereas if you sign up with Common Energy, you’re stuck for three years.”
While the previous contract with Columbia Energy included ten municipalities, the current bid, if successful, would encompass 13.
Councilman Zach Horton asked whether the contract would be with one company or several. Stromback replied that when the bids come in, the companies would be evaluated and the lowest bid from a company that Joule felt is competent would be accepted.
Horton also wanted to know whether the Town would hold public hearings before committing to a contract. Costello said that public hearings on the issue had been held, and now the Town would have to commit to a contract if it wants to go forward. However, public information sessions might be possible to let residents know how the program works. The sessions could incorporated into Board meetings, or run as jointly sponsored by the Town and Joule, Costello said.
Horton said that he wants to be sure residents know enough to decide whether to stay in the program or opt out. The reason for using an opt-out model is that this brings more residents into the program, creating a larger customer base for utilities and an incentive to attract this base with a guaranteed price that, at first at least, is lower than Central Hudson’s.
One snag in the discussion was the timing of the Town Board’s next meeting, April 5. The deadline for bids is before that date. Stromback said that the Town has made clear what price and conditions it is looking for, and if these are not met, the contract would not go forward.
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