HOWELL — Mayor Bill Gotto says an energy aggregation program that has been in effect in Howell for 12 months was initially confusing and left questions unanswered.
During a recent meeting of the Township Council, municipal officials discussed the program, its progress, and what steps need to be taken in the future.
Energy aggregation is a program in which a governing body selects an electricity supplier and places residential customers into service from that supplier with the promise that a lower cost for the energy will save the customer money.
Under energy aggregation, residents are automatically enrolled in the program, but they retain the right to opt out.
Commercial Utility Consultants (CUC) is Howell’s energy consultant and has been managing the energy aggregation program.
A public auction in May 2014 resulted in a cost of 9.709 cents per kilowatt hour, which is less than the Jersey Central Power and Light (JCP&L) cost of 10.56 cents per kilowatt hour, according to an energy aggregation mailer that was sent to residents by municipal officials.
The winning energy supplier at the auction was TriEagle Energy.
According to Nicholas Reynolds, chief operating officer for CUC, TriEagle’s rate is required to remain below the rate offered by JCP&L.
“During the summer, JCP&L has a tiered rate which consists of a lower rate for usage up to 600 kilowatts an hour and a higher rate for usage over 600 kilowatts per hour. TriEagle provides one flat rate, so it reduced its flat rate to be below JCP&L’s lowest rate,” Reynolds said.
“What was confusing about this (energy aggregation) program was the confusion that came up among individual customers where we had to issue multiple letters to 17,000 residents regarding a change in rate structure for those residents on a budget plan. This change actually lowered rates which did save residents money, but since it changed, it now changes whether or not some residents may require a true-up,” Gotto said.
According to Reynolds, energy aggregation is functioning as intended with residents receiving a lower rate for electricity.
“Notices were sent to customers on the budget bill program because once a rate changes in the JCP&L system, this triggers a true-up to a customer’s budget bill. A true-up is a leveling out of the budget bill that is based on the rate the customer is being charged and the customer’s average annual usage. Since the rate is being lowered, JCP&L must recalculate the budgeted amount,” he said.
Reynolds said a true-up usually occurs annually.
“If the customer has used less electricity than expected, the customer will receive a credit. If the customer has used more electricity than anticipated, they will owe a balance. This true-up will occur earlier than usual, so TriEagle is notifying customers so they know how their budget plan will be affected by the rate reduction,” Reynolds said.
Township Attorney McKenna Torcivia said Howell’s contract with CUC will expire in December. Officials will determine if they want to retain the firm or seek a new energy consultant.
Gotto said he will consider retaining a new consultant. He said despite any dissatisfaction he may have with CUC, he believes energy aggregation was a good idea.
“The governing body doing this on behalf of the residents was worthy and I stood by that decision even though there was chaos early on which I understood.
“Now we are 12 months into the program and the exact same thing happened again. I am very dissatisfied with the way they worked the program,” the mayor said.
“I am glad people saved money, but next time we should come up with a list that identifies what was wrong with the program so that with a different vendor it would not happen again,” Gotto said.
“I also believe there were a lot of variables to the program we did not understand and that were not explained to us, but when we go out to bid again, there will be a bigger pool of energy applicants to choose from,” Toricivia said.
— Taylor M. Lier