Community choice aggregation expands into New York

June 27, 2016 | By

New York is the seventh state to allow community choice aggregation, the Associated Press reported, joining California, Illinois, Massachusetts, Ohio, Rhode Island and New Jersey with a state policy that permits local governments to aggregate electricity demand, often requiring alternative energy sources, while maintaining the existing electricity provider for transmission and distribution services.

Consumers pay a fixed price for power under a contract negotiated by the local buying group, or can opt out and switch back to the local utility. In New York, the development of community choice programs began as part of the state’s 2014 energy reforms intended to promote more renewable energy development, energy efficiency and a move from large-scale centralized power plants to a locally generated power network.

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Sign up for our FREE newsletter for more news like this sent to your inbox!Westchester Smart Power, which includes 112,000 homes in 20 communities in Westchester County, took bids from energy service companies to supply electricity for two local utility territories. ConEdison Solutions, sister company to utility Consolidated Edison, and Constellation Energy won the contracts, and agreed to charge lower rates than 2015 prices for either 100 percent renewable energy or a mix of fossil fuels, nuclear and some renewables.

“As an energy delivery company, we aren’t affected by our customers’ choice of energy supplier,” Clay Ellis, a spokesman for the utility NYSEG, which serves part of Westchester, told the AP. “We do buy energy since we’re also the default supplier for many customers, but the energy supply costs we pay are passed directly through to the customer with no markup.”

Consumers are expected to save $4 to $5 million a year, according to AP’s reporting. The region has some of the highest energy prices in the country, and 14 of the 20 communities opted for 100 percent renewable energy. About 7,000 customers, or 6.3 percent, opted to switch back to buying energy through the local utility.

“We’re getting calls from municipalities and grass-roots activists throughout New York,” said Mike Gordon, coordinator of Westchester Smart Power, launched as a pilot project in 2015 as the first community choice energy program in the state. “We are transforming the way we buy, consume and generate energy.”