First government-private energy aggregation program in state
By David Kilby, Special Writer
PLUMSTED — The Township Committee has voted to become the first town in New Jersey to buy energy in bulk in order to help lower monthly power bills for the municipality as well as homeowners and businesses within Plumsted.
The Township Committee’s action on Sept. 5 means the Plumsted Municipal Utilities Authority can now seek bids from state-licensed third-party energy suppliers via an online auction in October. The program will only move forward if the bids received offer lower rates than what Plumsted customers are now paying.
Plumsted residents’ Jersey Central Power & Light (JCP&L) bills have two different components: the charge for the energy itself and the transmission charge to deliver it. In an energy aggregation program, the town leverages the collective purchasing power of the municipality, residential property owners and businesses to contract instead with a state-licensed third party energy supplier for power.
JCP&L, as the local energy distribution utility, would continue to deliver power from the town’s chosen supplier so there would be no change in the way residents pay their power bills — only in how much they are paying.
NJ Board of Public Utilities spokesman John Reinert said Monday that if Plumsted’s program moves forward as scheduled it would be “the first government-private energy aggregation program in the state of New Jersey.”
Plumsted Township Business Administrator Ron Dancer, who is also a state assemblyman, said the program is made possible by energy deregulation.
”The Legislature about 10 years ago authorized the deregulation of energy and authorized municipalities to have energy aggregation programs, allowing a town to go out to bid for its supply of energy,” Mr. Dancer said.
There are approximately 3,000 homes and businesses in Plumsted that can potentially save money on their power bills through the energy aggregation program, he said.
By mid-October, there will be an online auction in which bidders throughout the country will submit proposed per kilowatt-hour rates. If those bids represent a savings over current rates, the township will notify every resident in Plumsted through a mailed letter by the end of October, Mr. Dancer said.
”In that letter we would inform them that the bids for the supply of energy have come in and there would be a savings (if the township switched to an aggregation program),” Mr. Dancer said.
”And if the resident wants to take advantage of cost savings, they don’t have to do anything,” Mr. Dancer said. “If they desire not to be part of the cost savings, they have the opportunity to notify the township. This is what the state law provides. Every resident has the opportunity to opt out. It’s totally voluntary.”
Mr. Dancer said the state wanted to make it easier for homeowners to save money by allowing townships to act on their behalf to negotiate lower energy rates. Otherwise, homeowners would have to individually contact the various third-party energy suppliers without the leverage that a large group of energy customers has.
”There’s greater purchasing power the more people you have,” Mr. Dancer said. “We’re going to tell residents whatever the bids come in at, and they’ll look at their bill and determine whether it’s in their best interest (to join the program).”
State law required the energy aggregation program to be approved by the Township Committee, but the Plumsted Municipal Utilities Authority (PMUA) will be the lead agency in the bid process, Mr. Dancer said.
”The PMUA (has) put many hours into it and it could pay dividends in significant cost savings for the township,” Mr. Dancer said.
—Managing Editor Joanne Degnan contributed to this story.

