Westwood MA
7-17-2024 12:28am

LETTER TO THE EDITOR: Westwood's Community Choice Electricity Program Offers Stable Rates

We are writing to comment on Prof. Ittig’s July 12 informative letter on lowering electric bills. As noted by Prof Ittig, Eversource sets a new rate for the supply of electricity every 6 months, generally on Jan 1 and on August 1. He also notes that the town has offered a program called the Community Choice Electricity (CCE). Through this program the town bids for electric supply products. The period covered by the current contract with the supplier (Direct Energy) is March 1, 2023, to December 31, 2024.

Because the Eversource rate varies over time, 6 months, and CCE rates are stable during the period of the contract, 22 months in our case, comparing one data point, as Prof. Ittig does, is not very meaningful. Over this 22-month period, the fix supply rate for the CCE has been 16.71 c/kWh in comparison to an average of 18.04 c/kWh for Eversource (rates have ranged between 15.77 c/kWh and 25.65 c/kWh). As an aside, the town of Westwood has recently signed a new 3- year contract with Direct Energy with a rate of 14.289 c/kWh for the Standard product (10% additional renewable energy) and of 15.193 c/kWh for the Plus product (100% renewable electricity).

Prof Ittig has looked into cheaper electricity options and suggests a supplier that offers a startling 6-month fixed rate of 10.69 c/kWh. This rate is for “new customers” only. The contract would be automatically renewed unless it is canceled. He lists other options with a similar product. If this cost increases significantly after the 6-month period due to weather events or market pressure, one’s presumed savings would quickly disappear. We feel that one should be cautious in signing these kinds of risky contracts. Prof. Ittig seems to be aware of the pitfalls, but does not indicate whether he has had experience working with any of these suppliers. The CCE is a program vetted by the State and monitored by the DPU and the Town. It is transparent, offers a competitive and stable rate, and choices of renewable energy content.

Respectfully submitted by Maria Costantini and John Isberg

Maria Costantini is a retired environmental health scientist who lives in Westwood. John Isberg is a retired energy executive who also lives in Westwood.

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7-17-2024 2:15pm

I have used the independent competitive suppliers for many years and have saved quite a bit of money by doing so. I agree that you need to note the contract expiration date for an independent supplier and switch suppliers at that time if necessary. This is a small price to pay for much lower rates. I have been very disappointed by the rates offered by the Westwood Community Aggregation plan. Also, customers using a competitive supplier may switch to Eversource or to the Westwood Community Aggregation plan if they were to offer lower rates than those available in the competitive market. In my experience, this has never happened. This is not “one data point”.

Also, your right to choose a supplier may be taken away soon. The Massachusetts Senate passed a bill on June 25 that would ban competitive energy suppliers. That bill, S.2838, is now being considered by the Massachusetts House of Representatives. Apparently, some consumers have been making bad choices and need to be protected from doing that. You may have received letters in the mail or telephone calls offering expensive options, i.e. scams. The existence of bad choices may represent regulatory failure in Massachusetts. Other states have been able to control such issues through regulation without banning the competitive energy market, e.g. Pennsylvania. The Senate bill would take away your least costly choices. If you have an opinion about this issue, you might consider sharing it with Westwood’s representatives in the state legislature, Senator Michael Rush and Representative Paul McMurtry. See below.

Representative Paul McMurtry:

Paul.McMurtry@mahouse.gov

(617) 722-2080

Senator Michael Rush:

Mike.Rush@masenate.gov

(617) 722-1348

by P. Ittig 7-18-2024

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7-19-2024 5:31pm

Details:

The letter in support of the Westwood Community Choice Electricity aggregation plan (CCE) mentions as a benefit that “the CCE is a program vetted by the State and monitored by the DPU and the Town”. Actually, all of the offers listed on the state Web site are from firms that are licensed and regulated by the state. The low-cost offers are not “risky”
so long as you avoid offers with a cancellation penalty and you pay attention to new rates available at the end of your contract term. You are also protected by your right to switch suppliers at any time if you are not satisfied.

The letter in support of the CCE also refers to the 22-month period between price changes as a benefit of that plan. This provides a form of insurance against future price increases, but at a cost. However, it is not clear that the price guarantee could be sustained in the event of a large increase in market prices. Firms have sometimes defaulted when called upon to honor such price guarantees. Further, the market price of electricity in Massachusetts may decline when the long-delayed connection to Hydro‑Québec is completed and when (if) the expanded pipeline for transmission of natural gas to Massachusetts is completed.

See your choices on the state Web site at,

https://www.energyswitchma.gov/

Customers who are willing to switch suppliers from time to time can save quite a bit of money.

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