Colts Neck Township Community Energy Aggregation

January 29, 2016 | Author: Joleen Rose | Category: N/A
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Colts Neck Township Community Energy Aggregation Program Update! The Colts Neck Township Committee is pleased to announce that Wednesday, September 10th, 2014 the Committee passed a resolution to award a power supply contract to ConEdison Solutions to serve as the power supplier for the Colts Neck Community Energy Aggregation (CNCEA). The Township accepted the bid of ConEdison Solutions, a subsidiary of Con Edison, Inc., who bid a fixed price of $0.0928 per kilowatt hour (KWh) for a twenty-one month contract beginning in March 2015, and running until December 2016. ConEdison Solutions was the lowest bidder. At the $.0928/KWh price, the typical Colts Neck Township residential customer is projected to save about 9.5% off of the JCP&L tariff price for power supply, which translates to about $14 per month or about $300 over the contract term for the typical customer. Based upon the number of residential customers in the Township that are eligible for the program (about 2,700), aggregate Township-wide savings would be about $800 thousand over the 21-month contract.

Here are answers to some frequently asked questions about the program:

What is Community Energy Aggregation?

Community Energy Aggregation is a program that allows the municipality to conduct a “bulk purchase” of energy supply on behalf of its residents, at prices lower than the average utility price. New Jersey regulations allow municipalities to take this approach to procure savings on your behalf. The Township hired an experienced consultant, Gabel Associates, to implement a procurement process for a Third Party Supplier to provide power supply to its residents.

How will the CNCEA program work?

In December 2014, Colts Neck Township residents that do not have their own Third Party Supply contracts will receive a notice in the mail. This notice, known as the Opt-Out Notice, will provide all the details of the program as well as the various

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ways to opt-out of the program, including ConEd's toll free telephone number, email address, and a postage-paid opt-out card. Customers will have 30 days to review the program details and decide whether they wish to opt-out of the program. After that 30 day opt-out period, those residents who do not opt-out of the program will be enrolled by ConEdison Solutions. Beginning with your March 2015 meter read date, every participating customer (those who did not opt-out) will be billed by ConEdison Solutions at the lower rate of $0.0928/KWh, saving approximately 9.5% on the power supply portion of each bill! Even after your electric account is enrolled, any Colts Neck resident may “opt-out” of the program at any time if they wish to. It is important to emphasize that this program covers only the power supply portion of your electric bill. Under New Jersey’s retail choice regulations, you may purchase power supply from the electric utility under its Basic Generation Service (“BGS”) tariff rates, or you may purchase your power supply from a third party supplier. Most residential electric customers have not switched to a third party supplier; therefore the majority of Colts Neck Township residents will be eligible to participate in the CNCEA program. Importantly, the delivery and distribution of electricity under this program will continue to remain the same, through the regulated utility (JCP&L) that serves your home. The utility will continue to handle your account, addressing any outages and maintaining service. The only thing that will change is the billing and cost of the electricity provided.

What is the legal basis for the program?

The New Jersey Legislature approved the Government Energy Aggregation Act in 2003, to ensure that the benefits of energy deregulation were passed on to consumers, in the form of lower costs and greater choice of suppliers. (“Energy deregulation” refers to legislation passed in 1999 that separates the provision of energy as a competitive arena from its distribution, which remains in the hands of the regulated utilities which have a monopoly on the “pipes and wires” that deliver the energy to your home or business. This means that companies are now free to compete to generate electricity (or supply natural gas), and consumers are free to choose who to buy it from.)

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The 2003 law gives communities the ability, after passage of an ordinance, to “aggregate” all of the residential accounts within their boundaries, and solicit bids from suppliers in order to get the best price and terms for everyone. On October 30, 2013 Colts Neck Township passed an ordinance authorizing the formation of a Government Energy Aggregation program.

Why is this happening now?

In February of 2014 the Colts Neck Township Committee issued a bid to licensed electric Third Party Suppliers in the State to participate in a competitive bid for suppliers to provide electric power supply to the residential customers of Colts Neck. On April 30, 2014 bid were received from 4 electric suppliers and the lowest bid received was $0.0965/KWh. This bid price would have resulted in an estimated savings of about 5.3% for the typical residential customer over the contract term, as compared to the applicable JCP&L tariff price for power supply. Since energy markets were still somewhat elevated back in April 2014 due to the lingering impacts of the exceptionally harsh winter, the decision was made at that time by the Township Committee to defer an award, keep the bid open, monitor market conditions and aim to take refreshed pricing by September 10, 2014 in the hope of seeing a greater savings margin. With the relatively mild summer experienced this year, energy market prices gradually improved through the summer relative to prices prevailing at the end of April. Accordingly, the Committee sought re-freshed bid pricing on September 10, 2014 and received bids from 3 suppliers. ConEdison bid the lowest price for a 21month term beginning in March 2015 that will result in a 9.5% savings for Colts Neck residents.

Do I have to be part of the program?

No. Residential customers have the right to “opt-out” during the initial 30-day optout period, or at any time during the 21-month contract. Customers can remove their electric account from the program by simply calling ConEdison Solutions toll free at (855)-884-9794, or by email at [email protected]

Can I opt-in to the CNCEA Program?

Yes. Customers who have their own third party supply contracts but would like to join the CNCEA program can call ConEdison Solutions toll free at (855)-884-9794, or

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by email at [email protected] and provide their electric account information. It is very important that residents currently purchasing energy from a third party supplier read their existing contracts very carefully before deciding whether to terminate the existing contract and join the CNCEA program. Some third party supply contracts have penalties for terminating the contract prematurely, and some third party suppliers have automatic "roll over" provisions which renew your contract without consent or action from you. Please be sure to read your current agreement and take the necessary actions to alert your third party supplier that you wish to terminate service at the end of your contract term in order to join the CNCEA. Please note that we are not responsible for informing your existing supplier or terminating your agreement with them. However, if you have any difficulty with them, please let us know and we'll try to help you resolve issues. Also, it is important to emphasize that the contract the Township has signed with ConEdison Solutions provides that ConEd must honor the fixed price of $.0928 per KWh for the full 21-month term, and prohibits ConEd from charging any early termination fees if customers decide to opt-out, as well as prohibiting ConEd from automatically ‘rolling over” the contract.

Will this include both gas and electricity?

The Law allows for a community energy aggregation to cover electricity and natural gas. Colts Neck Township has elected to conduct the initial program for electricity only, as greater opportunities for immediate savings exist in the electricity market. The Township intends to study the results of the electricity program and decide at a later date whether to expand the program into natural gas supply.

As a consumer, what action do I need to take?

As a resident currently receiving power supply from the utility, you do not need to take any action in order to be automatically included in the program. If you do not want to join this program, you can return the form that will be sent to you by ConEdison Solutions, or call the toll-free phone number, to indicate that you wish to opt out of the program. If you are already purchasing energy through a third party supplier, you will be given the opportunity to join the CNCEA at the end of the existing contract with your

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present supplier.

I currently receive budget/equalized billing from JCP&L. If I participate in the Community Energy Aggregation program, will I be able to keep my budget or equalized billing?

The Township required that the ConEdison Solutions provide budget billing for their power supply charges to those customers that currently have such arrangements with JCP&L. JCP&L will continue to provide budget billing for their delivery charges. Therefore, the consolidated bill issued by JCP&L will continue to contain equalized payments.

Why is the program set up so that residents can only opt-out, rather than having it so that residents may opt-in if they wish to join?

The program is set up this way to ensure that a sufficient number of households will participate to obtain a meaningful bid, and to avoid the costly and time-consuming process of having everyone affirmatively sign up for the program. The aggregation rules incorporate consumer protections, and recognize the logistical challenges of a residential procurement program, while at the same time providing a structure that will attract bidders. When the retail choice program was originally enacted in NJ in 1999, the rules required that government aggregators be required to obtain a so-called “wet signature” from each residential customer demonstrating the customer’s affirmative consent to join. After a number of years it was recognized that this “opt in” approach put such a burden on the programs that none got off the ground, and the model was changed to “opt-out” for residential customers. Unlike business customers, residential customers represent large numbers and (relatively) small usage/margins for each account. In order for an aggregation of residential customers to work, it is necessary to get large volumes with as low transaction costs as possible. This results in the opt-out approach, which gives suppliers a firmer basis for the load they are bidding on and to thereby assure that the municipality received the best possible bid price, but still provides residential customers with the ability to opt out. The regulations also require that an aggregation program show savings versus the utility-provided rates. Each residential customer will receive a written notification from ConEdison Solutions in December, informing them of the fixed, $0.0928 per kilowatt hour KWh price, the comparison to the utility price, and their right to opt

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out. As such, each resident will be fully apprised of all pertinent information necessary to make an informed decision. Based on the experience in other states as well as recently-implemented GEA programs in New Jersey, it is anticipated that only a small percentage of households will opt out.

Does the program require a certain percentage of revenues in order to go into effect?

No. The program is structured so that the third party suppliers bid a price per kilowatt hour and, if selected, must hold that bid regardless of the number of residents who opt-out. The suppliers will have built the risk of some residents opting out into their bid price.

What about power outages?

Power outages are not under the control of the third party supplier. The delivery system is still under JCP&L’s control, and there is no difference in delivery services whether you purchase the power supply from a third party supplier or from JCP&L under its tariff. In the event of an outage, you would still contact JCP&L. As such, neither the existence of the CNCEA program, nor your decision regarding whether to participate in the program, will have any impact on service reliability or JCP&L’s response to calls regarding a power outage.

What if I have a solar system?

Customers with solar systems, especially that are larger in size and meet the majority of your home’s electricity consumption, typically experience solar production in some months (typically Spring or Summer) that exceeds your monthly electric consumption. In such cases, the monthly utility bill is usually very low and, under the State’s net metering rules, the utility allows you to carry-forward or ‘bank’ your excess solar production to offset futures months’ usage when solar production dips (typically during winter months). For these customers, the savings attributable to the CNCEA program would be very minimal, and your ability to take advantage of ‘net metering’ offered by the utility may be impacted. It is for these reasons that the Township elected to remove solar customers from the CNCEA program power supply contract.

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However, if you believe based upon a review of your past bills that your solar system is NOT producing excess energy that is being ‘banked’ on your JCP&L bill, you may consider opting-in to the program. You are encouraged to contact ConEdison Solutions or JCP&L for further information.

Will the chosen supplier be able to charge penalties for deviating from an average historical usage?

No. The Township will not allow for any provisions in the contract signed with the third party supplier which penalize residents for variances in usage.

Is it possible to opt out at any time?

Residents will be sent a Notification Letter from ConEdison Solutions advising them of the $0.0928 per KWh contract price and the comparison to the utility price, and will be given a 30-day window to decide to opt out of the contract. After the 30-day ‘opt-out’ period expires, ConEdison Solutions will enroll all remaining eligible residents in the program for power supply beginning in March 2015. However, even after the initial enrollment, a Township resident that is enrolled in the program may change his or her mind and opt-out of the program at any time, without penalty or fees!

Will the chosen supplier be able to charge penalties if I decide to opt-out of the program?

No. The contract that the Township signed with ConEdison Solutions for the provision of power supply to Township residents prohibits the supplier from penalizing residents who exercise their right to opt-out of the program.

Will the Township monitor the energy prices for changes?

The contract requires that the supplier maintain the fixed price of $.0928 per KWh for the full contract term; therefore the price you pay per kilowatt hour will not change over the course of the contract term.

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Will the LIHEAP and Lifeline benefit programs for low income residents still apply if I participate in the CNCEA?

LIHEAP (Low Income Home Energy Assistance Program) is federally funded program, administered by the Dept. of Community Affairs, to assist low income households with paying their heating bills (whether electric, gas, oil, etc.). There should be no impact of participation in the CNCEA program on customers’ eligibility. Lifeline or Universal Service programs are state-funded through State taxes and societal benefits charges, again with eligibility based upon a number of factors tied to income. Bill credits of up to $225 are provided to assist eligible customers with electric and gas utility bills. The CNCEA will provide consolidated billing through the utility; as such the bill credits would be unaffected.

For any additional questions, please contact Gabel Associates' customer call center at (855) 365-0770.

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