Cappadona said Eversource's basic supply rates will jump for the winter and NextEra's prices are lower. He doesn't expect the supply prices to drop in the coming years.
PITTSFIELD, Mass. — The city has signed an agreement to have NextEra Energy Services become the default electric supplier.
The move is part of the municipal aggregation program in which consultants Colonial Power essentially bundled all residential, commercial, and municipal usage into a single group purchasing bid for electric supply.
NextEra offered a contract of a rate of .09976 per kilowatt-hour for a period of three years, which is less than what Eversource has currently planned for supply this winter.
"It is not a scam. This is a legitimate program. The city has taken a leadership role in combining the electric load in the city for a favorable rate," Parks and Open Spaces Director Jim McGrath, who headed the effort, said.
In January, Eversource's supply is expected to rise to .10641 for residential users and higher for commercial users.
"For the next three years residents and businesses are part of a combined purchasing power to provide less expensive energy alternative to the existing Eversource basic service cost," Mayor Linda Tyer said.
Currently, when a user signs up for service, they are automatically enrolled to have the power supply come from a company of Eversource's choosing. Users then have the ability to shop for another provider on their own.
The city has now done that shopping for supply, with NextEra's bid coming in at what Colonial Power believes will result in 13 percent savings for residents, businesses, and the municipality.
Those who were on Eversource's basic supply package will automatically have supply come from NextEra at the lower rate. Those who shopped on their own have the ability to move to NextEra's bid but will need to opt out in order to stay with the supplier of their choosing.
"This is a legitimate opportunity for residents and businesses to take advantage of savings for electricity services. This is especially important in light of the Eversource rate case, which has not been settled and could cost us a great deal more for the distribution," Tyer said.
Eversource will remain the distributor so nothing will change with calls for service or billing. Those who are enrolled in low-income assistance, net metering, or auto-deduct payments will see no change to those aspects of the program.
Should residents want to stay with Eversource's basic rate for supply, they can opt out of NextEra by either signing the postcard which arrived with letters to all residents informing of the change or online.
"The choice is up to the consumer as to what they want to do," said Colonial Power President Mark Cappadona.
The city joins a dozen other communities in the Berkshires to take on municipal aggregation. In 2015, the City Council approved the city becoming an aggregator, which started the process of being able to group buy. That was approved by the state Department of Public Utilities. Colonial Power then went out to bid on multiple occasions, looking for the lower price but hadn't found one.
"They went into the marketplace and said this wasn't the right time," Tyer said.
This August, Cappadona said there was a "hole in the market" and the bids came in below Eversource's price.
Eversource goes to market twice for supply, once in the winter and once in the summer. The company has filed for winter rates at the .10641 rate starting in the new year, small commercial at .11559 and medium and large at .12368. NextEra's price is uniform at .09976 among those type of users and is locked in for three years. Colonial Power's payment for consulting is included in the NextEra price.
Meanwhile, Eversource is continuing its push to raise rates on the delivery side. That is still ongoing. The city's aggregation program is eyed to lessen the blow somewhat when it comes to the overall increase on the horizon.
Cappadona said there is a chance Eversource could drop back down closer to the current .08563 next summer for supply but he again expects winter rates to shoot back up. He said due to future capacity issues, the price is expected to stay high after this winter's jump.
Users will continue to have an opt-out ability at no charge at any point. The city is already planning to take advantage of the opt-out clause for streetlights, of which the Eversource rate is expected to be less than NextEra.
"We are definitely going to be opting out for streetlights for this program," Tyer said.
Cappadona said the purchasing agreement provides three years of stable supply prices, is less expensive, and is greener. Cappadona said the city's program "is as green as anyone in the state."
"We selected a program that includes 25 percent more solar renewable energy certificates than required by the Commonwealth of Massachusetts. This is another example of Pittsfield furthering its investments in renewable energy sources," Tyer said.
When the three years of a locked in price expires, Colonial Power can again go out to bid and try to secure a new supplier. But, the city has no obligation to do so.
The city is planning on hosting two public information sessions. The first will be at the Senior Center on Thursday at 1:30 p.m. and the second will be at 6 p.m. on Wednesday, Dec. 6 at the library.
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