Municipal electricity aggregation is a mechanism by which a city or town can bundle the electricity supply needs of residents and businesses in their community and procure the electricity in bulk, typically for a multi-year term.
Municipal aggregation is allowed under Massachusetts General Laws Chapter 164 Section 134. More than 140 cities and towns in Massachusetts already have active electricity aggregation programs, and other nearby communities are pursuing similar programs.
By default, customers receive “Basic Service” electricity supply from Eversource. Under a municipal aggregation program, like Somerville CCE, all customers receiving Basic Service are automatically transitioned to the aggregation’s standard option. However, before the aggregation begins, all customers must be given the chance to stay with Basic Service, known as “opting-out”. After customers are enrolled, they can still opt out of the program at any time without penalty.
In October 2015, the City Council authorized the creation of a community choice electricity aggregation program in Somerville. The City then selected consultant Good Energy, L.P. to assist with all aspects of program implementation. The City developed a draft aggregation plan and solicited public comment. As required by law, the plan was reviewed with the MA Department of Energy Resources and then sent to the Department of Public Utilities (DPU) for review. DPU approved the plan in spring of 2017. Click here to see the plan.
Somerville CCE Aggregation Plan Highlights
- Provide for universal access, reliability and equitable treatment of all classes of customers
- Automatically enroll all customers currently on basic service, but allows them to opt out or leave the program without penalty at any time
- Achieve a price for energy that will either
- Not exceed the price of Basic Service currently offered by the local distribution company (LDC – Eversource), or
- May exceed the price for Basic Service due to the purchase of renewable energy
The City conducted a competitive bid for electricity supply and secured its first supply contract to start in July 2017. The contract was with Dynegy for 30-month fixed-price contract. This contract had a standard product which added 5% more MA Class I renewable energy on top of the Commonwealth’s minimum requirements. The contract also had an optional product with 100% extra renewable energy and one with no extra renewable energy. Click here for product details.
Prior to the start of the program in July 2017, the City conducted an educational campaign , followed by an opt-out mailer sent to every resident and business receiving Basic Service supply from Eversource. The opt-out mailer gave the account holder the option not to participate in Somerville CCE. At program launch, roughly 27,000 residential and business accounts enrolled in the program.
Somerville conducted another competitive bid to secure a subsequent contract, which began in January 2020 and will last for 22 months. In this next contract, Somerville Local Green is doubling the amount of extra MA Class I renewable energy it includes from 5% to 10%.