Bristol Latest Municipality to Start Community Electricity Aggregation Plan
Program will enable town to buy its own electricity supplies, apart from Rhode Island Energy
October 16, 2023
WARWICK, R.I. — The town of Bristol is set to declare independence again, this time from the state’s utility company.
Regulators at the state Public Utilities Commission last week unanimously approved the town’s petition for a community aggregation plan. The program, once enacted by the town, enables Bristol to buy its own electricity supplies, separate from what is automatically provided by Rhode Island Energy.
While the utility company itself will still be distributing the power, as well as still mailing electric bills every month, the town is free to choose from any number of electricity suppliers, including local renewable sources such as wind and solar.
The change comes with a number of upsides; the plan includes an option for residents to choose to pay more for electricity that comes from renewable sources, aiding the state in reaching its 100% by 2033 Renewable Energy Standard (RES) goals. But the overall electricity is expected to be cheaper, for now, than the default service offered by the utility company.
The plan authorized by the PUC was originally approved by the Bristol Town Council in June, and members expressed interest in keeping the town’s energy options open.
“The magnitude of the cost savings might not be extravagant,” council member Aaron Levy said at the June meeting. “I think that for me, I’d like to do the due diligence to explore how much our residents could save.”
Seven other municipalities — Providence, Newport, Barrington, Central Falls, Portsmouth, Narragansett, and South Kingstown — launched the first community aggregation programs in May. The law enabling municipalities to buy their own electricity has been on the books for more than 20 years, but as reported by The Providence Journal in March, it took another piece of legislation to make a key change to make the program possible.
Municipalities with community aggregation plans must have their residents opt out of the program, instead of opting in, allowing municipalities’ programs to have enough residents in bulk to justify buying the electricity from a third party, and it is the aggregation that makes the electricity cheaper than what can be offered by Rhode Island Energy.
Electricity has been cheaper in the seven original municipalities with aggregation plans, so far. Through November, the programs are charging 9.361 cents per kilowatt-hour (kWh) compared to Rhode Island Energy’s rate of 10.675 cents per kWh. An average customer in the program using 500 kWh per month saves around $6.57 on every bill.
(Notably, customers can also opt in to use more renewable energy sources, but their electric bill will rise as much as 12.321 cents per kWh).
But rates are going up, beginning Nov. 1, as expected with winter rates. Residents in the seven municipalities with active community aggregation plans will increase to 17.641 cents per kWh, slightly lower than the electricity provided by Rhode Island Energy, which is 17.741 cents per kWh this winter.
The initial contracts are scheduled to end next month, and the municipalities will have to go out and bid for new energy contracts entirely dependent on the condition of the current energy market, and there’s no guarantee the price will be lower than what is offered by the utility.
A study performed by the University of Massachusetts at Amherst released in March showed 79% of towns with community aggregation plans saved monthly compared to the utility’s basic service rates, with a savings, on average, of 88 cents per kWh, or $93 per household per year.
Rhode Island isn’t alone in pursuing community aggregation plans; they are growing in popularity nationwide. As of 2020, 7.5 million U.S. customers are enrolled in community aggregation plans, procuring 192 megawatt-hours (mWh) of renewable energy. Ten states, including Rhode Island, Massachusetts, New Hampshire, and New York, have passed legislation authorizing the plans.
Whether power will remain cheaper than Rhode Island Energy’s default service over the long term remains to be seen. Ratepayers enrolled in the utility company’s last resort service received a 24% rate hike starting Oct. 1, the average customer using 500 kilowatts a month is expected to pay an extra $32.29 on average every month. Rates for the state’s low-income customers meanwhile are increasing, on average, $25.03 per month this winter.
It’s the second year in a row Rhode Island Energy has steeply raised the electric rates for the winter, citing supply chain problems and a growing global demand for natural gas, which fuels much of the electricity used in the state.
With approval awarded from state regulators, it’s now up to Bristol to launch the program.
Editor’s note: This story was updated Oct. 24.
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