Community Electricity Aggregation Public Information Session May 21, 2015 Martha Grover, Energy Efficiency Manager Office of Planning and Community Development City of Melrose

What is Community Electricity Aggregation? The process by which a municipality purchases electricity in bulk from a competitive electricity supplier on behalf of the residents and small businesses in the community. This process was laid out in 1997 under deregulation of the electric utility industry in Massachusetts (M.G.L Chapter 164, Section 134). Large commercial accounts such as the City of Melrose, Melrose Wakefield Hospital, grocery stores and corporate chains are usually already on competitive supply contracts.

Electricity Bills 101 There are two parts to your National Grid bill: Delivery Services National Grid charges a rate for delivering electricity to your home or business that includes five price components which are approved by the Department of Public Utilities. Delivery Service prices are not expected to change much in the short term and add up to about 7 cents per kWh for residential customers. Supply Services Under the Supply Services section of your bill is the cost of the actual electricity you use each month. Although you have a choice of electricity suppliers, most customers are on the default option, which is the Basic Service Fixed supply provided by National Grid. For residents, this is the part of your bill that increased to 16.3 cents per kWh on November 1 st. This compares to last winter’s Basic Service Fixed rate of 10 cents per kWh. The rate usually goes down again in May for the summer.

Why consider aggregation now? Recent National Grid Basic Service price increases this winter and predicted future increases due to supply and demand issues. As a result of rising electricity prices, more suppliers are coming to Melrose to offer competitive supply contracts to consumers (ie Dominion, Viridian, Direct Energy, Just Energy, Energy Plus, etc.) They are marketing heavily using direct mail, phone calls, door-to- door sales, credit card promotions, airline miles, and other tactics. The deals are often too good to be true and the devil is in the details: Initial rates are good for only 3 to 6 months then go up to variable or undisclosed rates High termination fees Promise big savings but don’t really offer any

Benefits of Aggregation Price stability for a term of 12, 18, 24, or 36 months instead of 6 month Basic Service increments Potential savings through group purchase Consumer protections such as no termination fees and transparent rates Public procurement process Consumer education and increased awareness of competitive electricity supply market My favorite: The opportunity to purchase more than the minimum 10% green power offered by National Grid Basic Service

Is Melrose in good company? Municipal Light Plants, Active Aggregations, Cape Light Compact

Milestones to date 5/19/14 Board of Aldermen approve the development of an Aggregation Plan 9/8/14 Request for Proposals issued for Aggregation Consulting Services 11/10/14 Good Energy, LLP selected by a committee including Martha Grover, a member of the Melrose Energy Commission, and a Melrose resident who is also an energy broker 3/9/15 Melrose Plan available for public review 3/16/15 Board of Aldermen approve the proposed Aggregation Plan for submission to Department of Public Utilities (DPU) 5/20/15 Department of Energy (DOER) review of the Melrose Plan

What comes next? Public comments and DOER review comments incorporated into the Plan and filed with DPU for review and approval DPU review process:  Public hearing  Procedural conference  Questions and comments by intervenors (DOER, Local Utilities, Attorney General) DPU Approval of the Melrose Aggregation Plan Develop and issue an RFP for competitive supplier bids Accept a competitive bid and start the 30-day opt-out period Any Melrose ratepayer on Basic Service rate who does not opt- out is automatically enrolled in the new plan Monitor and manage the program over the contract term

Melrose Aggregation Plan Elements Aggregation Plan Principles  Universal Access  Reliability  Equitable treatment of rate classes Public Outreach and Education  New outlets (Melrose Free Press and Melrose Weekly)  Mayor’s Blog and City of Melrose website  Public Information Sessions targeted at a variety of groups  Direct Mail  Opt-out Notification  MMTV  Other – suggestions?

The Product Offerings Melrose Local Green: The Standard Product contains 5% additional green energy above the current 10% Renewable Portfolio Standard (RPS) of the Commonwealth from locally generated renewable sources Sources based on Renewable Energy Certificates (RECs) from the Mass Energy Consumers Alliance. Mass Energy is the recognized leader in the Commonwealth in the sourcing and distribution of Massachusetts Class 1 RECs. Mass Energy has unique access to Massachusetts renewable energy projects and provides clear audit trails as it relates to additionality. Melrose Basic: Offers the same amount of green energy as the Basic Service supply from National Grid (10%) Melrose Premium Local Green: Offers 100% green energy from the purchase of Massachusetts Class 1 RECs

Opt-out Process An opt-out notice will be mailed to every customer on Basic Service with National Grid. The notice will be from the City of Melrose and it will be sent in an envelope clearly marked as containing time-sensitive information related to the program. The notice will:  Introduce and describe the program ;  Inform customers of their right to opt-out and that they will be automatically enrolled if they do not exercise that right;  Explain how to opt-out; and  Prominently state all program charges and compare the price and primary terms of the Municipality's competitive supply to the price and terms of the Basic Service with the Local Distribution Company;  Will include an opt-out reply card. Customers will have 30 days from the date of the mailing to return the reply card if they wish to opt out of the program; and  Will be designed by Good Energy and the City and printed and mailed by the competitive supplier, who will process the opt-out replies.

Q&A Melrose Community Electricity Aggregation website: Martha Grover Energy Efficiency Manager John P. O'Rourke