The House today approved legislation sponsored by Rep. Deborah Ruggiero designed to better enable municipalities to take advantage of the economy of scale and get lower electrical prices for customers in their towns. It would also better enable communities to demand more green energy, and encourage a more competitive electricity supply market in Rhode Island.
The legislation would overhaul the state’s law enabling municipal aggregation, which already allows such negotiations, but has gone unused due to burdensome requirements included within it.
Representative Ruggiero’s bill (2017-H 5536A), which now goes to the Senate, aligns Rhode Island’s aggregation law more closely with the law in neighboring Massachusetts, under which 115 communities, including Fall River and New Bedford, now have such programs.
Under the bill, cities and towns, or groups of municipalities, could negotiate with power suppliers for a contract to provide power to the entire town, including businesses, public properties and homes, although all customers would maintain a right to individually opt out of that agreement.
Because the city or town would be offering a sizable, bulk purchase of power to the supplier, it would likely be able to negotiate better rates for customers.
“Municipal aggregation, also known as ‘community choice,’ enables a city or town to choose an electric supplier for residents and businesses in that community after a public hearing. It saves residents and businesses on their electricity costs because municipally aggregated communities often beat the local utility’s price per KWh and save on their bills. There’s also consumer protection, because a customer can opt out of program without paying a penalty. This is reviewed by the town council, public stakeholders, and the Public Utilities Commission to ensure that rate payers are getting a good deal. It also allows a municipality to procure more renewable energy,” said Representative Ruggiero (D-Dist. 74, Jamestown, Middletown.)
Rhode Island allows competition among electric suppliers, but National Grid, which also operates the transmission system and once was the only supplier, remains the largest supplier by far.
The legislation removes one of the biggest roadblocks to aggregation by eliminating a provision that requires individual customers to opt in to the aggregate purchase. Instead, it creates programs in which all customers in the contract area are included unless they opt out. Opting out, however, must be allowed at least every two years and without penalty.
The legislation also requires that the municipality hold a public hearing on the plan before entering any aggregation agreement, to ensure that customers have input and can get their questions answered. All plans must also be approved by the Public Utilities Commission.
Besides better facilitating the negotiation of lower electricity prices and price stability, since contracts are usually for periods of more than six months, the legislation provides consumers extra protection because all contracts would be subject to scrutiny by the town or city council, public stakeholders and the Public Utilities Commission before adoption.
The bill is cosponsored by Rep. John G. Edwards (D-Dist. 70, Tiverton, Portsmouth), Rep. Lauren H. Carson (D-Dist. 75, Newport), Rep. Julie A. Casimiro (D-Dist. 31, North Kingstown, Exeter) and Rep. Aaron Regunberg (D-Dist. 4, Providence). Sen. Erin Lynch Prata (D-Dist. 31, Warwick, Cranston) is sponsoring companion legislation (2017-S 0877).