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Boston lobbies Mass. regulators to approve city power aggregator plan

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Boston lobbies Mass. regulators to approve city power aggregator plan

The City of Boston is pushing Massachusetts utility regulators to approve without further delay their community choice aggregation plan to create a municipal-owned electricity supplier as an alternative to the default utility, Eversource Energy subsidiary NSTAR Electric Co.

City officials want to implement the CCA plan at the start of 2020, but concerns raised over impacts to consumers and Eversource's basic service rates are threatening to push back the start date. With Eversource's basic service procurement for power supplies fast approaching, all parties are urging the state Department of Public Utilities, or DPU, to make a decision sooner, rather than later, to reduce uncertainties over the program's start date.

Under Massachusetts state law, cities and towns can come together to buy electricity in bulk to meet the needs of their residents and businesses instead of relying on electric distribution companies. Such municipal aggregators also enable communities to procure greater percentages of renewable or clean energy resources than required by the state renewable portfolio standard.

Boston's "green" municipal aggregation plan, filed June 20 with the DPU, seeks to buy more clean energy to achieve the city's goal of achieving carbon neutrality by 2050. Boston's "Community Choice Energy" proposal also aims to stabilize electricity bills for Boston residents and address growing concerns around predatory business practices by for-profit energy suppliers that promise savings but fail to deliver on them.

From among NSTAR's 248,000 Boston customers, Boston would coordinate with Eversource to identify and enroll in the CCA plan eligible basic service customers who will have a choice to opt out. Customers being served by third-party retailers would not be automatically switched over to the CCA plan.

While not taking a stance on the CCA proposal, Eversource warned regulators of the uncertainty the CCA plan is causing regarding the amount of load they need to procure in a basic service procurement Nov. 12. That load amount will depend on the timing of a DPU decision on the CCA plan and its implementation, according to Aug. 20 filings with the DPU.

Until that market uncertainty is eliminated, as acknowledged by Eversource, power supply bids for its basic service procurement will include a "risk premium." In their initial petition, city officials stressed to regulators that approval of their CCA plan by no later than Aug. 31 was "critical" to reducing that uncertainty and soliciting the necessary power in time for the January 2020 launch date. It is now mid-September and the DPU has yet to make a decision.

Fears of implementation delays, impacts

With the possibility of a "large portion" of current basic service customers in the Eversource Northeast MA load zone migrating into the Boston CCA program, Eversource said in an Aug. 20 filing that the program's implementation "will likely have a significant impact on basic service procurement — including extreme price risks and load uncertainty."

Further, the utility warned of increased generation supply costs resulting from the CCA plan's impact on the basic service procurement, not just in Boston, but throughout the company's eastern Massachusetts service territory.

Eversource told regulators that price risks and impacts to the solicitation process could be mitigated if the DPU issues an order by Nov. 1 and the Boston CCA plan's implementation is postponed until at least July 1, 2020. This delay will avoid any impact on basic service wholesale suppliers that have already committed to serving the Northeast MA load, which includes Boston, for the January-June 2020 time period covered by the Nov. 12 procurement.

The utility also noted that the CCA plan will have consequences in Eversource Southeast MA load zone as well because the utility is required to establish one price for residential and small commercial customers by blending and load weighting the basic service prices of the two load zones.

As the state's ratepayer advocate, the office of state Attorney General Maura Healey echoed Eversource's worries in a separate Aug. 20 filing and told regulators that "the timing of the program launch could impact basic service procurements and, ultimately, basic service rates for non-program participants."

Healey's office also urged that a "robust education and information plan is necessary to provide each potential customer with the ability to make an informed decision about whether to participate in the city's program and should be tailored to reflect Boston's size and diverse population."

The state attorney general's office recommended a coordinated transition and implementation of the CCA plan "in a way that mitigates any potential harm to customers that remain on basic service" and requested a procedural schedule with dates for discovery and the ability to request evidentiary hearings and/or the submission of briefs.

In response, the City of Boston, with Colonial Power Group Inc. as its CCA implementation consultant, dismissed Eversource's and the attorney general's concerns as "wholly irrelevant" and not worth delaying the DPU's consideration of the CCA plan.

"The consideration of the plan's effect upon Eversource basic service procurements or rates is simply not relevant to this proceeding," Boston said in its Aug. 30 filing. In addition, the city asserted that both Eversource or the attorney general failed to cite any statutory language "that suggest any limitations on the amount of load that can be shifted to newly formed municipal aggregation plans or the timing of such plan initiation."

"Prolonged deliberation of the stated concerns with impacts upon other customers will only increase the likelihood such concerns realized; such a self-fulfilling approach is hardly logical or in the interests of Massachusetts electricity customers," the city said. Boston also noted that their plan is "nearly identical" to numerous aggregation plans that have been submitted to and approved by the DPU since the first CCA in Massachusetts formed in 1997.

If approved, Boston would join at least 170 towns and cities with either approved CCA plans or proposals awaiting approval, including six municipalities with suspended CCA programs, according to data collected by S&P Global Market Intelligence. (Massachusetts DPU Docket 19-65)