Norfolk Residents Could Enjoy Lower Electricity Rates
By Joe Stewart
Norfolk residents may see their electricity rates decreasing as soon as fall 2024 or spring 2025. How so? Norfolk has submitted their aggregation plan, known as the Norfolk Community Choice Power Supply Program, for initial state review. Assuming quick state approvals and a short contracting process, Norfolk could have its own plan by the end of the year.
A municipal aggregation plan is a method by which a town purchases electricity on behalf of its residents and businesses. Norfolk’s program will provide Norfolk customers with the choice to pay Norfolk’s negotiated rate or to opt-out and enter into a contract with another supplier.
According to the Green Energy Consumers Alliance, 167 Massachusetts cities and towns currently have an aggregation plan approved by the Massachusetts Department of Public Utilities. Three local communities--Ashland, Franklin, and Holliston--already have their aggregation plans up and running, while two others—Medway and Mendon--have plans in the state approval process, like Norfolk. For a map with aggregation plan data, visit https://www.greenenergyconsumers.org/aggregation.
Why has Norfolk created an aggregation plan? Simple, really: Norfolk consumers are paying too much for their electricity. According to the Massachusetts Attorney General’s 2023 Market Update, consumers have paid more for their electricity from third-party suppliers than if they had paid the regulated rate.
“Over the entire six-year study period (July 2015 to June 2021), Massachusetts consumers in the individual residential electric supply market paid $525 million more than they would have paid if they had received electric supply from their electric distribution company,” notes the report.
The report continues to say, “... in all of the Commonwealth’s towns and cities that were open to competition, residents who signed up directly with a supplier experienced a net consumer loss.” The report is available at https://bit.ly/3SgPC7p.
Jim Lehan, longtime member of Norfolk’s Select Board and current Vice Chair, noted that the Board began investigating community aggregation to benefit residents of Norfolk, asking “Can we find a way to save money for residents?” The Board hired Colonial Power Group to help with the process, including creating a community aggregation plan with community input and working through the state’s plan approval process. If Norfolk were to move ahead following state approval of the plan, negotiating and securing electricity supply at a competitive rate and ongoing operation of the plan would be performed by Colonial with oversight from the Select Board.
According to Mark Cappadona, President, Colonial Power Group is working with nearly 100 Massachusetts cities and towns including 80 who are currently operating community aggregation plans. Cappadona noted that Norfolk residents will be able to opt out of the aggregation plan at any time and without any penalty, highlighting that third-party electric supply plans often have termination fees in addition to higher rates for electricity supply.
The State’s Electric Power Division tracks basic rates and Norfolk residents have experienced significant changes in their rates from a low of $0.10753 in the summer of 2021 to a high of $0.25776 in the winter of 2022. The average rate since January 2021 has been $0.16479:
As a point of reference, local towns with community aggregation plans enjoy lower rates than Norfolk residents. Ashland’s rate is $0.15988/kWh, Holliston’s is $0.14771, and Franklin recently negotiated a $0.15 rate which will be good through November 2025. Currently, Norfolk residents pay $0.1823/kWh under National Grid’s basic rate.
Cappadona outlined that the next steps would be consulting with the state’s Department of Energy Resources to confirm that Norfolk’s plan conforms with regulatory requirements, and then a review and public hearing with the state’s Department of Public Utilities culminating with an order authorizing the plan. Following those reviews, Norfolk would then be in a position to negotiate for electricity from licensed suppliers.
Norfolk’s aggregation plan is available at https://norfolk.ma.us/news_detail_T3_R97.php and more information about Colonial’s client-towns is available at https://colonialpowergroup.com/our-communities/.