Refuting Common Objections to Community Choice Energy for Boston

In advance of the City Council hearing today at City Hall, BostonCAN has compiled a list of responses to the common objections we hear from the Office of Energy Environment and Open Spaces (EEOS) about why they should delay implementing Community Choice Energy.

Community Choice Energy (CCE) could cost more than basic supply, which would put an unacceptable burden on ratepayers.

The cost of renewable energy is steadily dropping and will continue to drop as economies of scale are achieved. Already many community choice aggregations (CCAs) have been successful in getting better rates. In a study by the Applied Economics Clinic in Nov. 2017, the residential rates procured by local aggregations saved 19% on average below the Eversource rate. By delaying the implementation of CCE, the Office of Environment, Energy, and Open Space (EEOS) is costing ratepayers by not getting residents and businesses a better option.

There will be fluctuations in the market, but if the City finds that all the bids it receives for CCE are higher than Basic Service it can delay entry into the market until a better opportunity arises. Over the course of a contract the price will likely stay below Basic Service since many forces mitigate against significant declines in Basic Service rates. If at the time of contract renewal the bids would be significantly above Basic Service, the city can choose not to renew. In addition, individual ratepayers can always opt out.

But it happened in Chicago. In fact, Chicago’s aggregation had to be stopped when basic service prices became cheaper than their aggregation’s. What if that happens here?

In Illinois, rates for basic service had been kept high by a temporary state regulation for several years. Then that regulation expired, so basic service became much cheaper and was able to underbid aggregation contracts. In Massachusetts, there are no temporary regulations on basic service rates that are set to expire.

What about Melrose, MA? When their first contract was up, none of the new bids was competitive with basic supply.

Melrose had to pause its aggregation due to a spike in capacity charges in National Grid territory. Boston’s default electricity supplier is Eversource, who has not had the problem with capacity charges that National Grid has. Melrose plans to petition DPU to re-start its aggregation once the capacity charge issue has abated.

The Request for Information (RFI) invited vendors to share historical pricing data for municipal aggregations. Since none of the respondents did so, the cost of CCE to Boston ratepayers cannot be estimated.

Vendors were probably the wrong people to ask for historical pricing information. It is understandable that they might consider this information proprietary. Typically, vendors provide prospective pricing information in response to a Request for Proposals (RFP).

CCE will cost too much to administer. Between start-up activities and on-going maintenance, EEOS simply does not have enough staff.

Most municipalities with CCE programs hire a consultant who handles most administrative details of the program. The best way to ascertain administrative cost is to issue an RFP and see what competing consultants would charge.

Additionally, however, the city needs to weigh the cost of providing a CCE program with the cost of not providing one. The slower we reduce greenhouse gas emissions, the more the city will have to spend on adaptation and on responding to emergencies.

Boston is so big it has to move cautiously when considering CCE and can’t follow the same template that smaller towns followed.

Boston has more than 600,000 residents. It can follow the example of the Southeast Regional Planning and Economic Development District (SRPEDD), which also has a population of more than 600,000, and has had a joint municipal aggregation since early 2015. SRPEDD followed the standard aggregation pattern of using a consultant to create an aggregation plan and administer the program.

EEOS needs time to study the trade-offs of making CCE an opt-in vs. an opt-out program.

This is not the way the law works—the path to set up a municipal aggregation is a clear and well- understood process. Setting up an “opt-in,” and entering the market as an individual competitive supplier muddies the waters and is not what the city council authorized the mayor’s office to do.

According to a city report showing GHG emissions through 2015, Boston is on track with its GHG reductions, based on a per capita decrease.

Boston’s commitment to reduce GHG emissions from 2005 levels was never based on per capita emissions, nor are the commitments in the Paris Accord. Global warming depends on CO2 levels in the atmosphere and not on how many people live on the planet. So tying GHG reductions to population doesn’t make sense. Moreover, in 2017 Mayor Walsh pledged to reduce GHG emissions to zero by 2050, changed from the previous goal of an 80% reduction and zero emissions can’t be adjusted per capita. In order to get to the new 2050 goal, the 2020 goal not only has to be met, but exceeded.

BostonCAN on Earth Day

BostonCAN celebrated Earth Day in Dorchester this weekend, handing out fliers for Community Choice Energy and talking with local residents and activists.  We had lots of people pose in front of Rosie the Riveter to make a statement to the City of Boston to speed up its climate action efforts.

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National Grid Suing City to Allow Continued Pollution

Natural gas utility National Grid has chosen to sue the City of Boston. The purpose of the suit to protect National Grid from having to conform to the gas leak ordinance passed by the City Council and signed by the Mayor in 2016.  The ordinance was passed in the wake of a multi-year campaign kicked off by BostonCAN in 2013.  You can see a video of our gas leaks street theater here.

“Unfortunately, utilities have filed suit to prevent the implementation of our gas leaks ordinance. National Grid has filed suit,” said O’Malley to Jamaica Plain News. “It is incredibly disappointing because it is something that was worked on and got to the heart of fixing the 4,000 to 5,000 gas leaks in the city. Instead of working to address these public health and safety issues the utility company has chosen to prevent its implementation by filing suit.”

The decision by the utility is short-sighted and clearly driven by “business over community welfare” thinking.

CCE Op-Ed in Commonwealth Magazine

Darlene Lombos, the Executive Director of Community Labor United, wrote an editorial piece for Commonwealth Magazine last month about Community Choice Energy and the need for the Mayor’s office to take swift action implementing it for Boston.

As the largest metro area in the state, Boston must play a leading role in meeting our climate goals as a state, while also reducing emissions and increasing resiliency in the city. Through CCE, Boston can expect to increase its clean energy portfolio by at least 5 percent, helping to reach its goal of a 25 percent reduction in greenhouse gas emissions by 2020.

You can read the whole article here.

BostonCAN on the News

BNN News interviewed members of BostonCAN as part of a larger piece on climate readiness in Boston in the wake of two recent “Once in a Generation” storms that caused so much flooding.

Storm Prompts Call for Climate Action from Chris Lovett on Vimeo.

BNN interviewed Boston University professor Nathan Phillips, who discussed the need for Community Choice Energy to be acted on more urgently as a critical part of the climate plan for the City of Boston.

Rising Seas Rally in the News

BCAN’s Rising Seas Rally made a splash.

We got picked up by multiple news outlets.  The Boston Globe interviewed our campaign coordinator Andy Bean:

Bean said he hopes the city this year implements the Community Choice Energy plan that Boston’s City Council approved in October 2017, which would increase the amount of renewable energy residents and businesses use without raising costs.

The city has a Climate Action Plan, which aims to cut greenhouse gas emissions 25 percent by 2020 and be carbon neutral by 2050, but Bean said it is overdue for an update.

We were also in the North End Waterfront neighborhood news and Universal Hub.  Attendees were also interviewed by Boston Neighborhood Network News.

Upcoming CCE City Council Hearing

Boston City Councilors Michelle Wu and Matt O’Malley recently filed a new order to monitor the progress of the implementation of CCE for the City of Boston.  The direct result of the order will be a new hearing:

THEREFORE BE IT ORDERED:
That the appropriate committee of the Boston City Council hold a hearing to discuss the implementation of Community Choice Energy in Boston, and representatives from the Office of Environment, Energy and Open Space and other interested parties and members of the public be invited to testify.

We don’t know when the hearing will take place, but BostonCAN and its allies will need to show up in full force again to let our officials know that we expect them to take quick and resolute action to implement this energy policy as part of their climate mitigation plans.

We’ll keep you posted on when the hearing happens, so check back here in the coming days.