City to Offer New Choice for Electricity Consumers

Good news Melrose! The City received notice from the Massachusetts Department of Public Utilities that our plan to procure electricity supply on behalf of Melrose residents and businesses has been approved. We hope to have electricity supply pricing available over the next six weeks with new rates in effect as early as January 2016.

What does this mean for you? It means that if the electricity supply bids are favorable and accepted by the City you will have the ability to take advantage of lower electric bills over the term of the contract which could be up to three years—providing household budget stability.

Will you save money under the City plan? No one has a crystal ball and the ability to tell you what future electricity prices will be. However, by conducting a bulk purchase for a two to three year term with the help of an experienced energy consultant, the City anticipates getting bids that are less than National Grid’s winter rates and close to current summer rates. On average over the year, you can save money and count on a steady rate. National Grid recently announced their new supply rates will go into effect November 1st at 13.1 cents per kWh which combined with the delivery cost of 8 cents per kWh, rates this winter will be over 22 cents per kWh. It is expected that National Grid’s rates will continue to spike over the next few winters.

What do you need to do now? Nothing. Shortly after the City accepts a supply bid, all National Grid customers in Melrose who are currently on the Basic Service Fixed rate (and not already signed up with a competitive supplier) will receive a notice in the mail from the City of Melrose which will explain your options. Those customers will then have 30 days to either do nothing and be enrolled in the new plan or opt out and stay with National Grid’s Basic Service Fixed rate.

Will you still get a bill from National Grid? Yes. The charges from the new supplier the City selects will appear on page two of your National Grid bill in the Supply Services section which you will pay to National Grid in one payment each month just like you do now. And National Grid will still be responsible for outages and other service issues.

How do you learn more about it when you have to make a decision? The City will get the word out to each eligible household by mail, via the Mayor’s Blog and other social media, press releases to local papers, and via community service segments on MMTV in addition to holding public information sessions in a variety of locations. All of this will likely take place in November and December. Stay tuned. But in the meantime, the City of Melrose Community Electricity Aggregation website has more information and links to articles and presentations.

What’s the backstory? The City of Melrose has been working on this initiative since early 2014. It is called Community Electricity Aggregation (CEA), made possible by Massachusetts General Law in 1997 which many cities and towns are now taking advantage of as a way to provide residents and businesses another choice of electricity supplier and utility savings. Under CEA, municipalities create large buying groups of local accounts in order to purchase electricity supply in bulk. The Melrose Board of Aldermen provided approval for the City to explore aggregation in May 2014. The City then procured the services of a consultant who drafted a Municipal Aggregation Plan which was approved by the Aldermen in March 2015, reviewed by the Department of Energy Resources in June, and approved by the Department of Public Utilities on September 29.

Why now? The City of Melrose is aware that the last two winters have been tough as electricity rates have gone up to unprecedented levels. But at the same time, Melrose households and businesses have been swamped with solicitations from other suppliers which are confusing and not always a good deal over time. Many ratepayers have trouble deciphering their electric bill and rarely bother to look at it every month other than when payment is due. Community Electricity Aggregation presents Melrose ratepayers with another option that:

  • has been vetted by Massachusetts regulatory agencies,
  • provides household budget stability instead of crazy six-month rate swings,
  • benefits from the experience of competitively procured brokers selected by a committee of Melrose residents, and
  • consumers can cancel at any time without penalty.

And the bottom line is that unlike other suppliers, the City isn’t profiting from this initiative, but simply providing residents with another choice. Look for a letter in the mail in the coming weeks.

Questions? Contact Melrose Energy Efficiency Manager Martha Grover at mgrover@cityofmelrose.org or 781-979-4195.

This is the section of your National Grid bill that shows the Supply Services, which represent about two-thirds of what you pay.  If you’re currently on Basic Service Fixed supply from National Grid then you will be eligible to participate in the City supply program when it starts.

This is the section of your National Grid bill that shows the Supply Services, which represent about two-thirds of what you pay. If you’re currently on Basic Service Fixed supply from National Grid then you will be eligible to participate in the City supply program when it starts.

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