A switch in power service — Montclair in transition to a new supplier
COURTESY AMERICA PUBLIC POWER ASSOCIATION
By JAIMIE JULIA WINTERS
Township residents currently participating in the community energy aggregation program will be temporarily transitioned back to getting their electricity through PSE&G.
In April 2019, Montclair joined Glen Ridge, Maplewood, South Orange and Verona to form the Sustainable Essex Alliance, as part of an effort to seek cleaner energy at lower rates. They contracted with a third-party power supplier, Direct Energy Services, LLC, beginning in July 2019 and running for 17 months at a rate of 11 cents per kilowatt hour. The contract expires in December, which requires SEA to go out to bid again.
SEA’s energy consultant, Gabel Associates, estimated that in the first 12 months of the program the aggregate savings for participating residents in the five towns was nearly $1.9 million, with 10,000 ratepayers out of 19,258 in Montclair saving a total of $684,000 and possibly ending with a total of $1 million in savings. On average Montclair households saved $100.
Almost half of Montclair households chose to opt out of the SEA.
During the summer SEA began the process of soliciting new bids for round two of the cooperative energy program. SEA also added Glen Rock and Livingston to its membership, bringing the number of towns to seven and increasing the number of households by about 10,000.
The goal has been to obtain 40-percent sustainable energy and at least a 5-percent savings compared to PSE&G rates, said Montclair’s sustainability officer, Gray Russell.
On Sept. 15, however, SEA received price proposals for the next 12 to 24 months from four energy firms that did not meet SEA pricing criteria relative to the PSE&G rates. Only one came back that would result in any savings, and only at 1 percent. Residents enrolled in round one have been saving 10 percent compared to PSE&G rates, Russell said.
“The market we are working with is volatile, and you are estimating futures,” he said.
On Nov. 4, after observing market improvements and changing the start date for the contract to improve the chances for favorable pricing, the SEA accepted new bids that were significantly improved compared to the bids received in September. The SEA awarded a contract for round two to Energy Harbor, the low bidder, for an 18-month contract that will begin in March. The new contract will offer 4-percent savings at a price of about 13 cents per kilowatt hour.
But due to the lead time involved and the SEA’s rejection of the September bids, a new contract could not be in place by the time the current contract expires in December. So all residents currently participating in round one will be temporarily transitioned back to PSE&G.
Residents are already being notified by PSE&G that Direct Energy is ending its supply service, signifying the end of the round one contract, and will be automatically switched back to PSE&G effective with the December meter reading. There will be no charge for the switch, and it will be temporary, until the round two contract begins.
In early January residents will receive a mailing providing the details of the contract with Energy Harbor and will have 30 days to opt out via phone, internet or return of a postage-paid opt-out card. For residents wishing to remain in the SEA program, no action is needed.
At the conclusion of the opt-out period, Energy Harbor will enroll all residents who did not opt out of power supply service beginning with March 2021 meter readings. Those who do not opt out will receive a notice from PSE&G in mid-February stating that Energy Harbor has enrolled them, and service with Energy Harbor will begin effective with the March meter reading. Those who opt out will remain with a PSE&G power supply.
In addition, participating residents will have the ability to voluntarily “opt up” to 100-percent renewable energy, which will be priced slightly higher than the PSE&G tariff price.
PSE&G and Jersey Central Power & Light will still provide services, and residents will still receive their bills through them. In case of a power outage, PSE&G or JCP&L will still be the utility to notify and will respond to repair lines and service. Any resident enrolled in equal payment plans can continue to do so.
The 1999 Electric Discount and Energy Competition Act deregulated the energy market, with the intention of bringing energy choice to New Jersey ratepayers. Instead of PSE&G giving all customers the same default rate and energy source, energy deregulation encourages competition by giving customers a choice.