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Energy companies pitch bulk purchasing plans to Schenectady City Council

Energy companies pitch bulk purchasing plans to Schenectady City Council

Energy companies pitch bulk purchasing plans to Schenectady City Council
Photographer: Gazette file photo

SCHENECTADY — Outside energy consultants are lining up to pitch the city on programs that would allow the bulk purchase of energy.

Two outfits recently briefed the City Council on community choice aggregation programs, or CCAs: Municipal Electric and Gas Alliance, or MEGA, and Manhattan-based Good Energy.

Under each plan, National Grid would still be responsible for delivery, maintenance and power outage problems. But administrators would shop around for the lowest-cost energy supplier, which would ideally lead to cost-savings for consumers.

“The only thing that changes is the supply portion,” said Javier Barrios, managing partner of Good Energy, which runs 400 CCAs nationwide.

Barrios referred to their model as the “Costco theory," or using economy of scale to allow localities to capture the most competitive prices for electricity or natural gas in the market. 

MEGA is based in Ithaca, and is a non-profit with 300 clients which only aims to operate in New York state.

The state Public Service Commission has authorized local governments to aggregate utility customers for energy supply, one of seven states to allow the practice. 

Cities, towns and villages are authorized to participate in this program, said Louise Gava, MEGA project leader, who gave a similar presentation to the Niskayuna Town Board last month.

MEGA hopes to sign up 40,000 households in the Capital Region.

“We’re just sort of aligning everyone with education this fall,” Gava said.

Schenectady can also work with localities in nine counties and portions of three more, Gava said, as part of municipal collectives.

If the City Council opts to move forward, they would select one of the companies as administrators and would ink a deal with a second energy service company, or ESCO, to manage the CCA effort.

Gava said the city of Saratoga Springs and town of New Scotland have already entered into “handshake agreements,” while Niskyuana and the Albany County towns of Bethlehem, Guilderland and Knox are all considering their options.

The administrator would pay for and conduct a 60-day outreach campaign to educate property owners.

Afterward, the City Council would be required to pass enabling legislation.

Both Good Energy and MEGA use "opt-out" models, which means all customers are automatically eligible unless they decline to participate. 

Localities do have the option of revisiting energy suppliers after a period of time, but the specific time frame varies. 

Gava cited communities entering deals with low-bid providers for anywhere between 18 months to three years. 

“The contracts we just executed in the Southern Tier were for two years,” she said. “It’s whatever the sweet spot is.”

Mayor Gary McCarthy on Monday said agreements would be “subject to some level of negotiation” and would be better discussed in executive session.

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