MEGA CCA - The Power of Aggregation | Saratoga Springs studies community power buying
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Saratoga Springs studies community power buying

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SARATOGA SPRINGS — The city is exploring whether to launch a program that would let the city bid for electric and gas supplies on behalf of city residents.

Finance Commissioner Michele Madigan said the city has a non-binding handshake agreement with the Municipal Electric and Gas Alliance to pursue a community choice aggregation project, though actually getting it off the ground is likely to be a long process requiring other municipalities to sign on as well.

“We are the first in this region to join, but it is actively moving forward in other regions of the state,” Madigan said.

Under community choice aggregation, which is being encouraged by the state Energy Research and Development Authority, municipalities contract with a company like the alliance to negotiate and bid energy contracts on behalf of their residents. The state Public Service Commission approved rules for the program in 2016.

The alliance estimates that in the Capital Region, about 40,000 households will be needed for a buying group. Saratoga Springs has only about a quarter that many households, so other cities, towns and villages would have to agree to join. Individual households would be able to opt out. All participating municipalities, including Saratoga Springs, would need to pass local laws adopting the program.

“It is contingent on getting other communities involved,” Madigan acknowledged.

But first, the alliance will be putting on consumer education workshops for city residents to explain how a buying alliance would work and the potential for energy savings.

“It has to work through municipalities, but the focus is on residents,” said Louise Gava, a community choice aggregation project manager for the alliance and a city resident.

No community aggregations are functioning, though one is just a couple of community approvals away from getting started in central New York, Gava said.

The alliance, which is a non-profit, has worked with 35 counties and 240 municipalities or organizations to bid out their municipal energy use, but municipalities couldn’t until last year bid on behalf of their residents’ utility supplies. Gava said the potential advantages include negotiating protection against consumer rate increases.

Gava acknowledged getting enough municipalities to agree may be a long process, but said it may not take as long as some might fear. “Once you get a couple of folks interested and on board, the pace picks up,” she said.

The community education meetings aren’t likely to be scheduled for several months, Gava said.

Madigan described the idea of aggregate buying as building on other energy initiatives the city has taken, including the opening last month of a 2.5 megawatt solar array at the former city landfill on Weibel Avenue, and the city’s efforts to encourage residential solar.

While a community could specify that its energy supply come from renewable sources, Madigan said the fundamental goal is to reduce costs for residents.

“I think price is going to be key,” Madigan said. “I think we’re really trying to do this for the sake of price. I’m very excited about this and I think it’s going to be exciting for the whole region — but it’s going to be a long process.”