Village waits for green light on green energy
SARANAC LAKE — The village is preparing to enter the last step in a process that would give local electric customers the chance to support renewable energies through their monthly bill. The village is waiting on the electric rate to dip low enough to lock in a better rate.
On Monday, the village board unanimously agreed to move forward with a Community Choice Aggregation agreement that would give locals the option to source all of their electricity from renewable producers.
Essentially, by bunching together all of the purchasing power of electricity users in Saranac Lake with other municipalities across the state, this collective group of utility customers would be able to purchase renewable power at a cheaper bulk rate than individuals would be able to purchase on their own.
When this CCA agreement starts, National Grid would still deliver electricity to its customers and maintain its infrastructure, but it would not sell electricity to those who opt in to the CCA.
People in the CCA would still pay their bills to National Grid, but the electricity passing through those lines would be purchased from companies offering more renewable energy sources, essentially allowing the community to choose what energy industries it supports.
The CCA purchase rate, the company the village will contract with, and the length of the contract, won’t be determined until the day it is signed. The whole thing relies on the price the village is given by the electric market, which fluctuates by the hour.
On Friday, the village’s CCA administrator, Joule Community Power, began going out to bid for contracts from energy suppliers. The consultants will do this every day and report the most up-to-date rates to village Manager Erik Stender, who will then decide if the village will act.
He said the first three bids that came in on Friday were all pretty high and did not come close enough to the village’s benchmark rates.
On Monday, the village set benchmark rates for this contract at just under $0.08 per kilowatt hour. If bids come back at or under these benchmarks, Stender will sign the contract and they can begin. If the bids are not under the benchmarks, then he cannot sign the contract.
Things happen fast and at the last minute. These rates and bids are only good for one day.
If none of the bids are at or below the benchmarks by a June 2 cutoff date, a memorandum of understanding with Joule will expire. That wouldn’t mean the collective seeking renewable power would disband, though. The village could ask Joule to go out for an MOU again and would have to do this step again.
“I’m pretty confident we can get there,” Stender said on Friday. “We just have to be patient, monitor it and jump on it the second we get the chance to.”
Right now, National Grid chooses the energy it supplies for its customers, a mix of fossil fuels and renewable energy. This CCA agreement allows the village board to set the default electricity supply.
Climate Smart Communities Task Force Coordinator Erin Griffin said “renewable” means solar, wind or hydro power — mostly the first two with a little hydro, too.
It does not include nuclear power, since this is not considered a renewable source.
Stender said the company the village contracts with will change which sources it purchases power from almost hourly, changing with the market, like any other commodity.
On Friday, New York Independent System Operator’s real-time dashboard, which tracks energy usage in the state, showed that 32% of the state’s energy was coming from renewable sources like wind and hydro power. Around 24% was coming from nuclear power and the rest — 44% — was coming from fossil fuels. That dashboard updates throughout the day and can be viewed at https://www.nyiso.com/real-time-dashboard.
Customers could see a 6.5% increase in their monthly bill immediately, but that would likely shrink over time and even potentially reverse into a lower cost, Joule Chief Executive Officer of Assets Jessica Stromback said.
Currently, she estimated consumers are paying around $0.0575 per kilowatt hour and the village set its renewable benchmark at $0.0710, around a cent-and-a-half higher.
Joule analysts watch energy markets and tell the village when the best time to sign a contract is, trying to lock in prices on a dip.
The CCA contract would lock in a rate, instead of being variable, as it is now. This could be good or bad, because the price of that fixed rate fluctuates.
Griffin said by locking in now they are essentially betting on the price continuing to rise, which she said is a very safe bet. Graphs of electric rates in New York over the past two decades, provided by Joule with data from the U.S. Energy Information Administration, show an ever-consistent rise in prices.
Data going back to 2001 shows the average price of electricity rising from around $14 per megawatt hour then to almost $24 per MWh now. Prices rose steadily for six years from 2002 to 2008, plateaued for a while with some rises and falls, before shooting up again around 2020, increasing by $6 per MWh in the past three years.
Stromback said because of this rise in the average rates, these locked contracts tend to break even, or even save customers money, in the long run. So a longer contract is typically better. Stender said, ideally, he’d like to secure a three-year term.
According to Joule, contracts typically last between 12 and 60 months, and this program could start in September.
Who is opted in?
Nearly all residents and small businesses who have a National Grid account already would be automatically opted in.
People can opt out at any time, Stromback said; they’re not forced to do this. They can try it for a little while and if they don’t like the pricing, they can change.
Not everyone is opted in, either. People already part of another ESCO would not be opted in. People with low-income assistance on their electric bills, such as those on the state Home Energy Assistance Program or National Grid payment plans would not be opted in. And the biggest electric users — what are called demand meter accounts — are not enrolled.
Village Community Development Director Jamie Konkoski said people in community solar programs will be opted in, but this has no effect on their subscription to those programs.
Stromback said after a contract is signed, a letter will go out to everyone eligible letting them know of the change, which also has information on how to opt out. She said people can opt out over the phone, online or through a mailer card included with the letter.
Bernstein said people wondering if they should stay oped in or opt our should be educated consumers and make the best decision for themselves. She said currently, they don’t have a choice. State leaders have picked National Grid to make the decisions for energy sourcing for the majority of people in this region. The CCA, she said, allows local leaders to offer another choice and allows residents another option.
“Most people don’t do anything about their electricity,” Bernstein said.
It’s complicated and people don’t want to deal with it, even if they support renewable energy, she said. Opting people in automatically eliminates that paperwork for the individual.
Joule recommended the village go with a 50/50 “blended” renewable contract, but Stromback said this term is a bit of a misnomer. The 50/50 contract still uses 100% renewable energy sources — just 50% of it will be produced within New York state and 50% produced outside.
Konkoski said the New York State Energy Research and Development Authority prefers 100% to be sourced from New York, and offers more Climate Smart Communities points for the village toward grants for future green projects. But this contract is also more expensive on the customers’ monthly bill.
Nancy Bernstein, a local subcontractor for the NYSERDA’s Clean Energy Communities program, said renewable energy from elsewhere in the country — where wind, sun and running waters are more plentiful — is cheaper.
Konkoski said the village board was willing to forego those points for now, in order to get a better price for village customers. She said when it comes time for the village to renew its contract, there is always the chance the 100% New York energy option will be cheaper. And she said supporting New York renewable energy through this CCA agreement is one way to drive down the price.
Konkoski said the CCA agreement increases demand for renewable energy at a higher pace, which leads to increased supply. This makes it easier for average consumers to be early adopters and encourages the renewable energy market.
National Grid does not produce any power. It sells it and maintains the lines to transport it. But people can choose where their money for the electricity flowing through those lines goes.
The local CCA process started in September 2021 when the former village board passed a law allowing a CCA. New York is one of only nine states allowing CCA agreements currently.