Relates to municipal energy aggregation programs; authorizes inter-municipal agreement for the purpose of coordinating efforts by municipal energy aggregators to requests bids for and potentially select an energy service provider to provide electric and/or gas supply services to participating customers.
NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A7896C
SPONSOR: Paulin TITLE OF BILL: An act authorizing certain municipalities to partic-
ipate in a municipal energy aggregation program through an inter-munici-
pal agreement with one or more municipalities in order to coordinate
efforts to procure electric and/or gas supply services on behalf of its
residents; and providing for the repeal of such provisions upon expira-
tion thereof
PURPOSE: To authorize municipalities in the County of Westchester to
establish municipal energy aggregation programs on their own or collabo-
ratively through an inter-municipal agreement. Such aggregation program
would allow municipalities to procure electric and/or gas supply for
residents.
SUMMARY OF PROVISIONS: Section 1 Provides definitions.
Section 2 Provides that a municipality may, by resolution, establish an
energy aggregation program or participate with one or more munici-
palities through an inter-municipal agreement to coordinate efforts to
procure electric and/or gas supply on behalf of its residents. This
section also establishes the required contents of the inter-municipal
agreement, including the designation of a program administrator to
request and compile data from the distribution utility or utilities
delivering electric and/or gas to residents whose municipalities are
participating in an aggregation program.
Section 3 Requires the program administrator to provide a copy of the
agreement to the distribution utilities and submit a formal request for
bulk usage information. Distribution utilities would be required to
supply the bulk usage information within sixty days of such request. The
Public Service Commission (PSC) would be directed to determine a reason-
able cost to be charged to the aggregators for the provision of bulk
usage information.
Section 4 Authorizes the program administrator to request bids from
Energy Service Companies ("ESCOs") for the provision of gas and/or elec-
tric supply. Any contract for supply would be limited to 30 months and
include a provision that the ESCO or ESCOs selected provide gas and/or
electric rates for first six-month sub-period that would be less than
those offered distribution utility for the previous 12 month period.
Additionally, any ESCO selected would be required to provide participat-
ing customers with the fixed monthly rate for the any subsequent six-
month period no later than two months before such subsequent gas and/or
electric rates take effect. ESCOs would be prohibited from levying any
cancellation charge and required to provide a website for participating
customers to view the monthly rates. Energy Aggregators would authorized
to select the ESCO that will offer the best service, or could elect to
reject all bids and re-advertise.
Section 5 Requires the aggregator to obtain from the distribution utili-
ty a list of customers affected by the contract with the ESCO, and
directs the municipal aggregator must provide notice to those customers.
Such required notice would be required to include instructions for how
to opt-out within the sixty-day opt-out period. After the sixty-day
period, residents which do not opt-out would be automatically enrolled
to receive gas and/or electric supply, but would be authorized to opt-
out at any future point with no penalty. Additionally, the distribution
utility would be required provide a list to the aggregator of the number
of residents that elected to opt-out and opt-in, and those customers'
information. The administrator would be authorized to submit that infor-
mation to the ESCO or ESCOs selected.
Section 6 Provides for the requirements of a distribution utility in
providing information to a program administrator.
Section 7 Provides requirements for the ESCO or ESCOs providing supply
under an energy aggregation contract, including the responsibility to
provide the program administrator with fixed monthly per kWh and/or per
Btu rates for electric and/or gas supply for each upcoming six month sub
period. Additionally, ESCOs would be prohibited from issuing any sepa-
rate charge, fee or bill for aggregation program services to an aggrega-
tor, resident, participating customer or program administrator in order
to recover its expenses. All costs would be required to be reflected in
the ESCO or ESCOs supply rates.
Section 8 Requires the program administrator to mail to each participat-
ing customer a notice providing the fixed monthly per kWh and per BTU
rates for the upcoming six-month sub-period and other information
comparing the price of gas and or delivery charges of the distribution
utility for the previous six month period. Additionally, any written
communication from an ESCO, program administrator or aggregator to a
participating customer would be required to meet certain standards for
clarity and ease of understanding.
Section 9 Provides for a PSC audit, within 365 days of commencement of
the contract, to ensure that cost benchmarks have been reached. If the
PSC determines they have not been reached, the contract shall be termi-
nated immediately.
Section 10 Requires the PSC to submit, within thirty months of estab-
lishment of a contract, a report to the Executive, Senate and Assembly
detailing the performance of the aggregation contract.
Section 11 States that the Energy Services Company Bill of Rights is
applicable to participating customers.
Section 12 Provides the effective date.
JUSTIFICATION: The Northern Westchester Energy Action Consortium
(NWEAC) and Southern Westchester Energy Action Consortium (SWEAC) are
comprised of municipalities which have joined together to collaborate to
reduce reliance on fossil fuels, save money for residents and busi-
nesses, increase energy efficiency, enable renewable energy generation,
increase economic activity, and align local efforts with county, state
and federal initiatives.
The creation of the community choice aggregation pilot program arose out
NWEAC and SWEAC's efforts to further these important goals, most notably
the desire to save residents and businesses money. Community choice
aggregation programs allow a large number of residents to pool together
and shop around at different ESCOs and obtain the best price. Pooling
together will increase their purchasing power, potentially resulting in
a better price, similar to the idea of buying in bulk. Community choice
aggregation programs are already authorized in six states: California,
Ohio, Massachusetts, Rhode Island, Illinois, and New Jersey.
This act will help to examine the effectiveness and impact of aggre-
gation programs in New York, where energy costs are among the highest in
the nation. The results of this program will help policy makers and
communities understand how they may play a role in reducing the cost of
gas and electric supply.
FISCAL IMPLICATIONS: None.
HISTORY: 2013: A7896-A Reported from Ways and Means.
EFFECTIVE DATE: Immediately; and shall expire and be deemed repealed 5
years after such date.
