Massachusetts is one of only six states that authorize "municipal aggregation" of electricity contracts, which is a practice that can allow Massachusetts residents to get more of their power from clean sources at a potentially lower cost. By adopting municipal aggregation, a city or town can contract for electricity for not only itself but also its residents and businesses. In other words, instead of residents and businesses purchasing electricity from a competitive supplier or from its distribution utility (e.g. Eversource, National Grid), the municipality purchases electricity from a competitive supplier in bulk on behalf of its residents and businesses.
Municipal aggregation can help protect consumers by providing consistent electricity prices year-round. Also, by purchasing electricity in bulk, a municipality can negotiate a better deal for its residents & businesses than they are able to get on basic service or from a competitive supplier. Energy suppliers will bid for the municipality’s contract, potentially leading to lower energy costs for individual ratepayers.
Any ratepayer - residential or business - still on the distribution utility’s “basic service” (i.e. default supply) would be switched to the new supply automatically, but can switch back at any time. Ratepayers who already buy their electricity from a competitive supplier are unaffected. Grid management, outage-repairs, and billing all remain responsibilities of the utility, and customers still receive just one bill.
Over 150 Massachusetts cities and towns have instituted municipal aggregation or are in the process of aggregating.
How does municipal aggregation help the environment?
Not all municipal aggregation contracts are greener than basic service. In the past, communities often chose aggregation to achieve cost savings and reduce price volatility rather than to green their electricity supply. However, many municipalities that have chosen to aggregate recently have done so to purchase more renewable energy. This potential to boost demand for clean energy has us at Massachusetts Sierra Club very interested in this program.
Thanks to Massachusetts' Renewable Energy Portfolio Standard (RPS), all energy suppliers are required to provide a certain percentage of renewable energy, which rises modestly every year. Municipal aggregation contracts can require a higher percentage of renewable energy beyond the level required by law. For example, the City of Brookline is enacting a plan that requires 25% more renewable energy than required by the RPS. Depending on what is negotiated, some municipalities have had to pay a slight premium for renewable energy requirements, whereas some have ended up with higher amounts of renewable energy at lower rates than basic service.
Important to ensure it's really green
If we are going to reach our goal of being powered by 100% renewable energy by 2050, we need to use every tool we have, and municipal aggregation is a pretty powerful one. But the devil is in the details. We want to ensure that the programs that purchase renewable energy are also boosting demand for more renewables. Our RPS law gets at this issue by requiring that energy suppliers purchase not simply renewable energy, but "Class 1 Renewable Energy Certificates", or Class 1 RECs, which are defined as solar, wind, small hydro, and a few other categories. Class 1 RECs must be from facilities built after 1998, and they must be local (from within the New England energy grid). We want to be driving demand for new renewable projects in our local economy, not just subsidizing those already in existence elsewhere.
In theory, since global warming is "global", what difference does it make if we buy RECs from Massachusetts or if we buy them from a distant state such as Texas? There are a couple reasons why it's important to buy local when it comes to renewable energy. First, we want to keep our energy dollars here at home. (Currently out of $22 billion Massachusetts spends on energy every year, $18 billion of it leaves the state, mostly to purchase dirty fossil fuels.) Second, as amazing as it sounds, it is actually more economical to build renewable energy projects than new fossil fuel projects in Texas and many other states in the Midwest. So, a REC bought from a Texas project is subsidizing a renewable energy project that likely would have happened anyway. In contrast, Class 1 RECs purchased from Massachusetts contribute toward renewable projects that would not be built without that demonstrated demand.
What You Can Do
- Contact your local elected officials and tell them you are interested in pursuing "Muncipal Aggregation."
- Contact us for help!
Resources & Other Links
Community Choice Energy (City of Boston)
Community Choice Aggregation (EPA)
Municipal aggregation (Mass.gov)
Green Municipal Aggregation (Green Energy Consumers Alliance)
Report: Green Municipal Aggregation in Massachusetts (Green Energy Consumers Alliance)
Metropolitan Area Planning Council Aggregation Toolkit
June 2017 Arlington's Electricity Aggregation Program
Brookline Green Electricity page
March 2015 Power Point Presentation to Melrose Board of Aldermen