What is Municipal Aggregation?
Municipal Aggregation is the method by which a municipality or a group of municipalities can buy electric power on behalf of the consumers within their borders. Municipal Aggregation is possible in Massachusetts due to the passage in 1997 of "An Act Relative to Restructuring The Electric Utility Industry in the Commonwealth, Regulating the Provision of Electricity and Other Services, and Promoting Consumer Protections Therein". The Act allows consumers to purchase electric power from an entity other than their distribution company. A key provision of the Act specifically allows local municipal governments to aggregate the electric loads of the consumers within their boundaries in order to negotiate more favorable terms with a power supplier. However, this option, as well as most of the provisions of the Act, is not available to those served by existing municipal power plants.
Potential benefits of municipal aggregation include:
- Lower electricity supply rates via group purchasing power
- Pricing stability - long term budget certainty
- Broader choices for "green products"
- Local control over contract terms
- Customers will continue to receive a single bill from their Local Distribution Company (LDC) (National Grid & Eversource) as well as continue to contact their LDC for services issues (outages, downed power lines, etc.)
According to the Massachusetts Department of Public Utilities (DPU), there are currently more than 70 municipalities across the state with approved municipal aggregation programs.
Interest from a number of municipalities in the Old Colony Region prompted the Old Colony Planning Council (OCPC) to form the "Old Colony Municipal Aggregation Committee" in December 2015 to explore this initiative on a regional level. In partnership with interested municipalities across the region, OCPC will look to select an aggregator, who will serve as a consultant who will work on behalf of the municipalities. The aggregator's primary role is to act as a catalyst or agent, who will then introduce interested municipalities to a suitable supplier. The aggregator will determine the service constituents want to acquire, solicits bids, and assist in choosing a supplier.
Additional information on municipal aggregation can be found on the Massachusetts Office of Energy and Environmental Affairs (EEA) Municipal Aggregation website as well as via the following links: