The City of Worcester, Mass., has entered into a 34-month contract with Direct Energy Services LLC to buy electricity for the Worcester community choice electricity aggregation program, which will launch in February 2020.
“The contract will help Worcester take a significant step toward decreasing its carbon footprint by providing its electricity customers with at least double the amount of local renewable energy compared to what is required by state law,” the city said in a news release.
Worcester started the aggregation process in the summer of 2017 when the city council voted to authorize its administration to develop and file the aggregation plan with the state.
The plan, which was approved by the Massachusetts Department of Public Utilities on September 30, 2019, has the following goals: (1) improve community sustainability and reduce Worcester’s carbon footprint; (2) stabilize electricity supply costs; and (3) protect consumers.
The program is a group buying program for electricity authorized by Massachusetts state law that allows cities and towns to choose the electricity supplier for their electricity customers rather than having the local electric utility buy the electricity.
Currently, approximately 140 cities and towns in Massachusetts have municipal aggregation programs.
Through the program, participating customers in Worcester will receive an additional 20% renewable electricity from renewable energy projects in New England, over and above the minimum amount required by state law, for a total of 36% renewable electricity in 2020, 38% renewable electricity in 2021, and 40% renewable electricity in 2022.
In addition to providing additional renewable electricity, the aggregation program will also provide price stability for almost three years, the city said.
Worcester said the long duration of the price makes the program different from National Grid’s basic service, which most electricity customers in Worcester have. National Grid’s fixed basic service prices change every six months for residential and commercial customers and every three months for industrial customers.
“Long-term price stability can also make the program different from many electricity supply offers in the marketplace, which can offer a low introductory price that rises after the introductory period is over,” the city said. “It is important to note, however, that the Worcester Community Choice Electricity Aggregation Program cannot guarantee to provide savings compared to National Grid’s basic service price because future National Grid prices are not known.”
Contract procured through competitive bid process
The 34-month contract signed by the city was procured through a competitive bid process. The program will provide two electricity choices. Program participants will be automatically enrolled in Worcester Standard Green and will receive 20% renewable electricity in addition to the 16% state-required minimum in 2020 for a price of 11.442 cents/kWh. This compares to National Grid’s six-month winter residential basic service price of 13.957 cents/kWh, which will be in effect at the time the program launches.
Participants can also choose Worcester 100% Green to receive 100% renewable electricity, all from renewable energy projects in New England, for a price of 14.031 cents/kWh.
The American Public Power Association has initiated a new category of membership for community choice aggregation programs.
