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City exploring options for buying energy

City exploring options for buying energy

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GLENS FALLS — The city is continuing its research on obtaining energy from alternative sources.

The Sustainability Committee met recently with Municipal Electric and Gas Alliance to learn about the process of community choice aggregation, in which the city would buy energy from an alternative supplier.

Municipal Electric and Gas Alliance was incorporated in 2001 as a nonprofit. It has agreements in 35 counties, according to Louise Gava, project leader of the company. Gava said aggregation took off when the electricity market was deregulated and the supplier and delivery of energy could be separated.

“If we form a whole bunch of people together as a big buying group, we can drive prices down,” she said.

Only cities, towns and villages can join the buying groups, not counties.

The Electric and Gas Alliance received its first approval to operate a buying group in New York in 2017. The way the program would work is the alliance would send out a request for proposals from energy suppliers.

National Grid is currently the default provider. Gava said the alliance can tailor the request for proposals to a community’s wishes. For example, if the community wants more energy derived from renewable or local sources, that can be included.

Gava said the alliance would screen out energy companies that have what she called “predatory practices,” in which people are lured in to switch providers by a cheap introductory rate then trapped when the price goes way up.

Saratoga Springs and Queensbury have already expressed some initial interest in forming a buying group, Gava said. Adding Glens Falls would increase the buying power to get a better rate than National Grid. She said the alliance would like to get 20,000 to 40,000 households.

“For us to have a good certainty that we can have a proposal that can beat that price, we have to be big enough,” she said.

Gava said people would automatically be enrolled but have the ability to opt out of the program.

“If we had to do opt-in, the financial savings would not be there. The clout to go into the market would not be there,” she said.

Westchester County has the only active buying group right now, she said.

Gava said if the city decides to go this route, the first step would be to choose the alliance as the buying group’s administrator. The organization would try to round up the municipalities. The agreement would be voided if the alliance cannot obtain a sufficient number of participants within a certain time frame, she said.

Councilman Bill Collins, chairman of the Sustainability Committee, asked if the city was locked into the initial rate for electricity. Gava said yes, the rate would be for the time frame of the contract.

At times, the city might be paying a slightly higher rate for electricity, but over the long run it would be a lower rate and would avoid the spikes, according to Gava.

“When the market is really low like it is right now, it’s a better deal to have a long-term contract,” she said. “The chance of the price going up is much greater than the price of it going down.”

The alliance is a nonprofit corporation, she said.

“We’re not trying to make money for shareholders. We’re trying to save money for our municipalities and our board,” she said.

Collins said the discussions are preliminary and the city is just exploring alternatives.

“These meetings are part of a process where we’re gathering information about these companies. No less than nine companies reached out to us,” he said.

The alliance was the second organization to meet with the city after Johnson Controls made a presentation in March about ways it could save the city energy.

Collins said the committee plans to invite the rest of the companies to make 30-minute presentations. The committee will meet on May 1 and May 3 from 6 to 9 p.m. in the mayor’s second-floor conference room.

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