Community Choice Electricity Aggregation (CEA) is a program in Massachusetts that came out of the Restructuring Act of 1997, specifically Chapter 164: Section 134. Aggregation of electrical load by municipality or group of municipalities; adoption of energy plan. The Act empowers cities and towns to create large buying groups of residential and business electricity accounts in order to seek bids for cheaper supply rates, essentially bulk-purchasing. The purpose of the Act was to ensure that the benefits of energy deregulation were passed onto residential customers and businesses by providing the ability to “aggregate” their accounts within their municipal boundaries in order to obtain competitive bids from Third Party Suppliers (TPS). Grouping residential accounts together creates economies of scale, enabling participating municipalities to achieve greater savings for account holders as a whole. You may find more information about the electric industry in the state by visiting the Department of Public Utilities (D.P.U.) website or the Department of Energy Resources website on municipal aggregation.
The objective of CEA is simply to lower the cost of electricity bills through the formation of a buying group composed of residents and businesses of one or more municipalities without interfering with the level of service provided by the utility, in this case, National Grid, distributing the electricity supply.
First, the municipality passed a motion at City Council. The city then selected Good Energy, L.P. to seek bids from third party suppliers (TPS) to obtain competitive electricity rates for participants. An account holder is initially able to opt out from joining the program during a 30-day period at the onset of the program by returning the opt-out letter sent to the account holder by the winning supplier on behalf of the town, or they may leave the program at any point with no associated termination penalties or fees.
Gloucester joins over 130 Massachusetts municipalities, closest among them being the Town of Hamilton, to take advantage of the state law that allows this type of municipal aggregation. View a list of them here.
The program will initially launch in December of 2018. Participants will see the new supply charge reflected on their bill for the previous launch month’s service.
If you are currently receiving your electricity supply from National Grid Basic Service, you do not need to do anything. You will automatically be enrolled in the program unless you choose to opt out.
The opt-out notification letter provides details about Gloucester’s Community Electricity Aggregation program. It will be sent by the winning supplier for the program, Direct Energy Services, LLC, on behalf of the City of Gloucester. By sending the enclosed opt-out card back to the supplier, you will be indicating that you do not wish to participate in the Gloucester Community Electricity Aggregation program. If you do not receive an opt-out letter, this may be because you are already in contract and receiving electricity supply from a third party supplier. If you are not in contract with a third party supplier and believe you should have received the letter, contact the winning supplier by phone between the hours of 8:00 AM and 8:00 PM Monday – Friday, or 8:00 AM and 5:00 PM on Saturday at (866) 968-8065.
The goal of CEA is primarily savings and long-term price stability, though savings cannot be guaranteed, due to the fact that there is no visibility into future National Grid rates. Participants will see no change in their utility bill other than a change in price on energy supply. They will continue to receive a single bill, make one payment, and continue to receive the same level of service from National Grid.
Your electricity bill has two cost components – delivery and supply. The aggregation program only changes the supply component of your bill. The delivery portion of your bill will not be affected.
No, you will not be charged a higher delivery rate; delivery rates do not change based on participation in a CEA program. Delivery rates are set by the utility and are regulated by the Massachusetts Department of Public Utilities.
Yes, your single bill will continue to come from National Grid.
Each eligible account holder will initially receive written notification after the bid informing them of the winning supplier price compared to National Grid’s rates, in addition to the account holder’s right to opt out. After the 30-day
opt-out period has ended and the program has begun, each eligible account holder that did not opt out will see the following message indicated on their National Grid bill:
“As of your next cycle meter read your supplier will be Direct Energy Services.”
This is the only notification from National Grid confirming participation in the program that account holders will receive.
Initial enrollment will take place through November 14, 2018. The program will then actually begin the month following enrollment. Changes to your electricity bill will be reflected on the following month’s bill.
No, there is no contract to sign. The program is designed to be as easy as possible for participants. Accounts are automatically enrolled as long as they are currently receiving Basic Service supply from the utility. Regular updates will be posted on the city’s website as the opt-out period approaches.
The contract term will be 36 months in duration. The final term was based on the most favorable price and was selected by the city’s governing body.
No, there are no changes to your current meter. National Grid continues to read your meter.
No, no deposit is required.
No, residents and businesses can opt out without penalty during a 30-day opt-out period. Opt-out notices will be provided via USPS mail prior to the program commencing. Simply return the opt-out notice within 30 days and your account(s) will not be included. Participating account holders may leave the program at any time without penalty.
Residents and businesses who are enrolled in the program may terminate their participation at any time without any early termination or exit fees. You can return to the program, but are not guaranteed the original contract rate.
Residents and commercial accounts that are enrolled in the program may terminate their participation in the program at any time without any early termination or exit fees. They may also re-enroll in the program at a later date with no associated re-enrollment fees, but are not guaranteed the original contract rate. The aggregation program rate will be reflected on the following month’s utility bill. Because switching suppliers requires at least two days to process by National Grid, you are encouraged to re-enroll in the program at least five business days prior to the meter read date indicated on your utility bill in order to ensure re-enrollment occurs on a timely basis.
A Third Party Supplier is a for-profit company that sells electricity supply into the grid which may be purchased by individual electricity customers under contract.
Third party suppliers are currently very active within the Commonwealth. This is due to the recent significant increases in electricity rates for all utilities within Massachusetts. We strongly advise any account holder to read the complete contract fine print and have a clear understanding of any termination penalties, along with rate details, before agreeing to purchase electricity from a third party supplier.
No, unfortunately you may continue to receive other third party supply offers. It is important, therefore, to remember the details of the aggregation program, i.e., the duration of the program, rate, etc. Very often, due to the length of time commonly associated with these types of programs, participants forget the program is still in effect, when in fact there may be months or even years remaining. Sometimes this results in a participant inadvertently leaving the program for what they believe may be a better offer. You are encouraged to remember that the CEA program is operated under the due diligence of your municipality and though not impossible, it is unlikely that other offers will be more competitive. Please regularly visit this site and the City of Gloucester’s site(s) for updates.
If you move within the municipal boundaries of the city, you may preemptively contact the supplier, Direct Energy Services, LLC by phone Monday through Friday from 9:00 AM to 8:00 PM EST at (866) 968-8065 to re-enroll your new account in the aggregation program at the original rate for the duration of the term. If you do not preemptively contact the supplier, you will receive an opt-out notification letter which details the program. Simply disregard the opt-out notification letter if you wish to participate in the program. Please note that your first month of service will default to National Grid Basic Generation Service supply, but will then transition to the Gloucester Community Electricity Aggregation program on your next available billing cycle.
Yes, you can continue to participate in a budget billing/equal payment plan.
All service and billing questions will continue to be directed to National Grid at (800) 322-3223.
No, the delivery of your electricity is always the responsibility of the utility. As a result of energy deregulation in 1997 in Massachusetts, utilities are only able to collect revenue from delivering the power to your meter, not from the actual supply. This is why utilities in Massachusetts are indifferent to the supply portion of the bill. Simply put, your utility does not make any money on the actual electricity they supply to your account(s). They only generate revenue from the delivery of that electricity.
No, the program will focus exclusively on electricity.
Yes, any account currently on Basic Service that is not enrolled with a third party supplier is eligible and will be automatically enrolled unless they choose to opt out.
The final contract requires the winning supplier to maintain the new rate for the entire term. This is called a “fixed rate”.
The consultant has extensive knowledge of how utility tariff rates are determined, and as such, structured a term with the goal of providing annual savings throughout the term of the contract.
Only third party suppliers licensed by the state were eligible to bid. In addition, an in-depth request for proposal was disseminated by the energy consultant to interested third party suppliers requiring them to provide their qualifications. Among other things, the request required suppliers to demonstrate financial strength, experience, and customer service capabilities.
No, by law, utilities are not permitted to bid. With regard to supply, the utility only provides default service, however, the utility will always be responsible for delivering your electricity.
Having a solar system which allows you to earn net metering credits does not preclude you from participating in the aggregation program. As long as the account holder is receiving Basic Service supply from National Grid, they are able to participate in the aggregation program and will continue to receive net metering credits from the utility. Net metering will work in the same way as before you joined the CEA program. Your net metering credits will continue to appear on your National Grid bill and will continue to be calculated based on National Grid’s Basic Service price. In addition, there is no change in SREC eligibility or the ability to sell the SRECs. For a more detailed explanation, please click here.
Direct Energy Services, LLC is the winning supplier for the program. They may be reached at (866) 968-8065 between the hours of 8:00 AM and 8:00 PM Monday – Friday, or 8:00 AM and 5:00 PM on Saturday, or via email at firstname.lastname@example.org.
Good Energy, the energy consultant, will be responsible for managing all aspects of the program and keeping the city appropriately informed.
No, the City of Gloucester does not profit from a CEA program.
Various public meetings and information sessions will take place in your area. Please check for announcements from the city and local news outlets. You may also call and speak to a Good Energy representative at (866) 456-8232.
Good Energy’s due diligence process requires bidding suppliers to meet strict qualification requirements. Among other things, the request requires suppliers to demonstrate financial strength and experience, as well as customer service capabilities. This process minimizes any chance of a supplier going out of business. If the supplier is bought, the purchasing entity will be contractually obligated to continue to provide supply service under the existing contract terms.
Good Energy will work with your community to obtain renewal pricing. Similar to the original term, eligible customers will be given the opportunity to opt out.
No, the municipality does not pay any administrative fees.
In 1997, the State of Massachusetts became the first state to pass municipal electric aggregation legislation, a type of program designed to save consumers money on their electricity bills. In fact, in 1997, the Commonwealth formed the Cape Light Compact, the first municipal electric aggregation program in the country. Six other states have since followed. The programs go by different names in different states, but the bulk-purchasing principles upon which they operate are largely the same. By aggregating, or grouping, a large number of electric accounts together, economies of scale are created, enabling participating municipalities to achieve greater savings for consumers than could normally have been achieved by the individual customer.
For the City of Gloucester and other communities in Greater Boston, Green Energy Consumers Alliance, Inc. (previously Massachusetts Energy Consumers Alliance) is supplying the local renewable energy above the amount required by the state law known as the Renewable Portfolio Standard. Green Energy Consumers Alliance, a Boston-based nonprofit, purchases renewable energy wholesale mostly from community-based wind power projects located in Massachusetts and Rhode Island. Green Energy Consumers Alliance has entered into a number of long-term contracts with wind power projects located in communities such as Plymouth, Gloucester, Scituate, and Ipswich.
Good Energy, L.P. is an energy consulting firm and national leader in the design and implementation of community choice electricity aggregation programs.
Good Energy is the retained community choice electricity aggregation consultant for over 200 communities across the country and has 31 active aggregations in Massachusetts comprised of over 300,000 households and businesses.
Good Energy is the selected vendor for three highly competitive bids by the selection committees of 1) the Metropolitan Area Planning Council (MAPC), 2) the Southeastern Regional Planning and Economic Development District (SRPEDD) and the 3) City of Melrose, administered by MAPC.
Good Energy has partnered with the City of Gloucester to design and operate this program.