From Watts Up With That?

Opinion by Kip Hansen — 11 May 2023

My local town has just chosen, for us, the residents of the town, to pay more for “renewable” energy. 

“The Town of ##### is pleased to announce our participation in the program relaunch of  ##### #### Community Power, a Community Choice Aggregation (CCA) program administered by Joule Community Power, a division of Joule Assests, Inc. that puts control of energy supply choices into local hands.”

[Note:  In this part of the USA a town is: “an urban area that has a name, defined boundaries, and local government, and that is generally larger than a village and smaller than a city.”]

The U.S. Environmental Protection Agency (EPA)  explains it this way:

“CCA [Community Choice Aggregation] —also known as municipal aggregation—programs allow local governments to procure power on behalf of their residents, businesses, and municipal accounts from an alternative supplier while still receiving transmission and distribution service from their existing utility provider. CCAs are an attractive option for communities that want more local control over their electricity sources, more green power than is offered by the default utility, and/or lower electricity prices. By aggregating demand, communities gain leverage to negotiate better rates with competitive suppliers and choose greener power sources.”

That sounds nice, and in part, it can offer lower electricity prices – through the aggregation step:

“Prices for electricity under CCAs may be lower than the residential retail price for electricity—sometimes by 15 to 20 percent—because of the collective buying power of entire communities and current market trends. CCA customers continue to receive the same delivery and maintenance services from their local utility, with a single utility bill that reflects the change in supplier. The only changes for customers are the sources and prices of electricity generation.” 

And in the case of my community, this turns out to be the case. Customers of the CCA will receive electricity at a rate ($/kWh) that is 6% less than last year’s average price charged by our local utility company.

But there is a hook – a trick – an unexpected ‘gotcha’ in the program. In the quote from the EPA above, it is in the “and/or”….

“All eligible residential and small-commercial electricity customers will be automatically enrolled in the 50% renewable supply product….”

Our Town fathers, encouraged no doubt by the representatives of Joule Community Power,  has have decided for us that the electricity we use should be 50% from ”renewable sources”.  That “50% renewable supply” electricity will be sold to us at a rate 14% higher than “standard supply” electricity.   Still, all-in-all, because of the advantages of the buying power of aggregated supply agreements, that higher cost for “50% renewable” is, bless their souls, 6% cheaper than what we paid to our local utility last year (on average).

The New York State law that authorized CCAs to operate in the state requires the Town to inform us of the decision they have made on our behalf, and give us citizens the chance to “opt-out” of the program.

If one is very clever, and has access to the internet, and an understanding of the program (gained through an extra half hour of research), then as a residential customer it is possible to “opt-out” into the “CCA Standard Supply” option – which is , as you have guessed, 14% cheaper than the “50% Renewable Supply” which is the default into which we are “automatically enrolled” by our caring Town officials. 

But overall, with the total of an hour of effort, this electricity customer (your ever-striving author) has opted-out by opting-in to the “Standard Supply”  option, thus achieving an overall rate reduction of 21%.

The numbers:

My utilities average rate for 2022: $ 0.1195/kWh

My rate with CCA Standard Supply:  $0.0987/kWh

My local CCA’s 50% Renewable rate:  $0.1124/kWh

My local CCA’s 100% Renewable rate:  $0.1240/kWh

Thus, my local rate will be less than 10 cents per kilowatt/hour – more precisely $0.09870/kWh.

And that, my friends, is a good thing.  Compare to this chart of average rates in the U.S.:

Here we see the “national average” is running above $ 0.16/kWh. 

My new rate, with the power aggregation scheme, will be reduced to the 2001 national average rates.  [A savings of 22 years – sort of.]

Note that the reduction is gained through aggregate purchasing power, not through renewable energy.  The 100% renewable rate is higher than the utilities original rates.  Customers taking no action –which are automatically opted-in to the 50% renewable scheme —  will have a new rate very slightly below their old rate, lower by  $0.0071/kWh, getting the advantage of the lower aggregated rate for standard supply electricity for the other 50%.

How does this work?  Can we follow the money?  Joule Community Power is a division of Joule Assets, Inc..  Joule Assets uses its link to Joule Community Power to provide instant customers for federal-government subsidized Solar Farm Developers.  In addition, the price breaks, for them, come from “savings in the form of solar bill credits derived from NY State incentives for renewable generation.”

BOTTOM LINE:

Your money (tax dollars – both State and Federal) is being spent to provide you, as an electricity customer in NY State, with conveniently more-expensive renewable-supplied electricity. Without this opportunity to pay twice (first in your tax dollars and secondly in  increased electricity rates) you could be paying over 20% less.

Aggregated energy buying is a good thing – it saves customers money.  Mixing that good idea with the “go green” mania is a silly thing, and increases electricity costs to the customer.  

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Author’s Comment:

And that’s the latest energy news from Upstate New York, USA.

In this area, perfectly good farm land is being turned into solar farms taking advantage of Federal subsidies and State incentives. 

As you can see, it is driving our electricity prices UP – not down as usually claimed by advocates and the main stream media.

Aggregated energy buying though presents the possibility of lowering electricity rates if it can be de-coupled from government mandated renewables policy.

Thanks for reading.