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Municipal Electric & Gas Alliance

Queensbury Town Board considers residential electricity buying group

By on May 22, 2016

QUEENSBURY – Queensbury Town Board is exploring the feasibility of establishing a municipal electricity buying group that would establish a single power provider for all town residents, except those who specifically choose not to participate.

The “community choice aggregation” buying group would enable residents to save on their electric bills and reduce the chances of multiple electricity companies soliciting business via telemarketing and door-to-door sales, said Louise Gava, project leader for Municipal Electric & Gas Alliance, commonly known as MEGA.

“This is very exciting. It’s a brand-new program,” she said in a May 16 presentation to the Town Board.

“It’s solid. There’s no flim-flam about it,” said Supervisor John Strough.

The state Public Service Commission recently authorized the program statewide.

A demonstration program is being conducted in Westchester County.

MEGA, on behalf of the town, would conduct a competitive bidding process, based on parameters set by the town.

“The focus is on residential and very small business customers in the municipality,” Gava said.

Larger commercial businesses could join the buying group if they wished.

Electricity companies would offer low rates because of the economy of scale and because the arrangement saves marketing expenses, Gava said.

Rival companies would be less likely to use telemarketers or send out door-to-door salespeople in the town, because there would be little chance of gaining enough business to offset expenses, she said.

National Grid would continue to transmit the electricity over its lines, and continue to bill customers on behalf of whichever company the town contracted with.

There would be no cost to the town.

 The electricity provider selected would pay MEGA a commission based on parameters in bid documents.

Once a company is selected, town residents would be automatically enrolled in the program after 30 days, unless residents notify the program they want to stick with their current electricity provider.

After that, residents automatically enrolled would have three monthly billing cycles to switch back to their previous provider without paying a penalty.

Queensbury at-large Supervisor Rachel Seeber, who was in the audience, said it would be better to operate the program on a voluntary enrollment basis rather than an automatic enrollment.

Third Ward Councilman Doug Irish said senior citizens might not realize they have the right to opt out.

Gava said the Public Service Commission does not allow the program to be on a voluntary enrollment basis, partly because voluntary enrollment typically does not get as many people to benefit from economy of scale.

“The state has decided it’s opt-out. So we can’t change that,” she said.

Gava said there would be educational outreach that would include public presentations at places such as Queensbury Senior Center.

“There really is not any fear or risk to consumers because they have plenty of time to make a choice,” she said.

Travis Whitehead, an electrical engineer who was in the audience, said MEGA has a good reputation in the industry.

MEGA already handles energy buying, under a different program, for some of the town’s municipal buildings, Strough said.

“I think it’s a very interesting concept and we’ll see where it goes,” Strough said.

“There’s absolutely no force on anyone to get involved,” said 4th Ward Councilman William VanNess.