COMMUNITY CHOICE AGGREGATION

Community Choice Aggregation allows local government to combine the purchasing power of its residents and businesses to provide them with an alternative electricity supply option. Community Choice Aggregation has proven to be a valuable replacement for the utility last resort service option by delivering choice and price stability.

Unrealized Benefits from Consumer Choice

In 1996, the legislature enacted the Rhode Island Utility Restructuring Act, which restructured the state’s utility industry by requiring utilities to sell their generating assets and unbundle their energy supply and distribution functions. The Act introduced retail choice, thereby giving customer’s the option to purchase electric supply from a competitive electric supplier rather than from their electric utility. Restructuring was meant to bring competition to the electric industry and thereby incent suppliers to compete for consumers with better rates and innovations. Consumer choice has been a success for most commercial customers but mixed for residential and small business consumers, most of whom continue to receive last resort energy service from Rhode Island Energy.

The challenge for many competitive electric suppliers is profitably serving individual residential or small business consumers at rates that are consistently lower than utility last resort service. Community Choice Aggregation overcomes this fundamental challenge because large buying groups attract robust participation from the region’s leading electric suppliers. As a result, aggregation programs can help bring the benefits of the competitive market to consumers who have been previously left out.

Community Choice Aggregation Programs

A Community Choice Aggregation Program is an optional buying group organized by a municipality to benefit electric consumers in the community. The Program enters into electricity supply contracts for “Eligible Consumers”. Eligible Consumers are residential and business consumers currently receiving last resort service from Rhode Island Energy. Eligible Consumers are automatically enrolled in the Program unless they elect to opt-out. Consumers under contract with third-party competitive electric suppliers will not be automatically enrolled in the Program, though they may opt in after their individual contract ends.

The Alternative Default Service Program

In some ways a Community Choice Aggregation Program serves as an alternative last resort electric supply option for consumers. When a new resident moves to a town and establishes a new electric service, the resident is automatically enrolled in Rhode Island Energy’s last resort service pool. Rhode Island Energy purchases last resort service on a routine schedule regardless of market conditions. That same resident moving into a community with an opt-out aggregation program would be offered an alternative to the last resort service option, one that is instead managed strategically and in a manner that seeks to maximize consumer benefits and provide options.

Local Decision Making and Control, without the Burden

Local governments can set their own energy related goals based on community priorities and preferences, such as stable long-term rates and renewable supply options. Many programs offer optional products that consumers can opt into, typically products that include higher renewable energy content at modestly higher rates. Aggregation programs can provide the necessary foundation for municipalities to pursue local energy development projects or unique energy services.

Municipalities who work with Colonial Power Group rely on us to provide complete turnkey services, whereby we manage all facets of program design, planning, and operations. We lead consumer education and outreach activities and manage regulatory compliance. As such, our client aggregation programs create no burden on municipal staff or local budgets. Further, the program is entirely self-funded with no costs imposed on non-participating consumers. Participation in the program is entirely optional. Consumers can opt-out at any time without penalty.