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Municipal Electric & Gas Alliance

July 2019 Newsletter

By on Jul 15, 2019

Gordon Boyd recently joined his long-time business partner, Gene Salerni in retirement from MEGA’s consultant firm, EnergyNext.

Gordon’s career spanned over four decades in public service and leadership in the energy field. His environmental consulting experience and service to the NYS Assembly as staff professional in several environmental committees and commissions prepared him for his leadership in founding EnergyNext corporation.

MEGA attributes its evolution and success to Gordon’s and E/N’s guidance, expertise and commitment.

Presently Gordon serves as President of Mercy House of Saratoga, a non-profit provider of housing for the homeless and other deserving populations.

We wish the best of health, happiness, blessings and gratitude to Gordon and Sharon as you continue life’s journey.

Ron Feldstein

Community Choice Aggregation Update

Just over three years ago, the Community Choice Aggregation (CCA) Order was issued by the Public Service Commission. This Order outlines the process for City, Town and Village governments to aggregate the electric and/or natural gas accounts of the residents and small businesses within their jurisdiction. CCA offers better rates, consumer protections and access to renewable electricity. Upon signing contracts in March, MEGA officially operates the first CCA Program in New York State outside of Westchester.  

MEGA’s CCA in the Southern Tier includes 21 municipalities and around 30,000 households. Of these municipalities, 6 elected 100% renewable electricity as the default offer. This represents about 36% of the total aggregation.

MEGA’s review team assessed responses to the CCA Request for Proposal and ultimately selected Constellation, an Exelon Company, as the supplier for all municipalities participating in the CCA. Constellation has 13-years of experience serving CCAs, including Sustainable Westchester in New York. The value of this experience was obvious in the robust customer service and opt-out opportunities as well as the pricing offer. The CCA pricing MEGA recommended is below the average utility supply price for the previous year and previous five years. For a slightly higher price, the CCA offered access to 100% renewable electricity from hydroelectric facilities in New York.

All CCA participants will be billed through the utility and can leave the CCA at any time without a fee. In addition, the CCA is compatible with budget billing, community solar and rooftop solar.MEGA’s role in creating the CCA market in New York is significant and ongoing. After three years of delays and challenges at almost every stage of the process MEGA can proudly say that our efforts and success have been critical in building a solid foundation for CCA.

With the CCA in the South Tier operational, MEGA is focusing our aggregation efforts on the Capital Region. A number of Capital Region municipalities have already decided to explore CCA with MEGA and from this core group our aggregation will grow. We look forward to offering the benefits of CCA to our second aggregation.

The MEGA Guarantee

New York State General Municipal Law §103 establishes standards for purchasing of commodities like electricity and natural gas with the goal of serving the public interest and protecting taxpayers. The Courts have held that these bidding laws are intended to guard against favoritism, fraud and corruption in the award of contracts, and to foster honest competition. When these standards are applied, governments can be reasonably assured of obtaining the best goods and services at the lowest possible price.

MEGA’s bid to select an electric and natural gas supplier includes language that will authorize other local governments to enter into contracts with the winning bidders. This provision, known commonly as “piggybacking”, permits all local governments to benefit from the bid results without having to engage in their own bids. This is permissible provided the supplier consents and specific language is included in the bid documentation. MEGA’s bid, issued by a host county, includes the requisite language to enable the extension of the contract to all local government subdivisions.

This cooperative purchasing approach whereby a single government entity has already gone through a formal bid process, established a contract for products or services, and issued awards to one or more successful bidders has been proven to reduce administrative costs, increase efficiencies and stretch local budgets stressed by demands to do more with less.

Given this backdrop of legislation governing the procurement process, it is important to note that the energy market has expanded exponentially over the past few years. While expanded choices support the goal of “fostering honest competition”, increased competition requires increased vigilance and attention to detail. One way to meet this obligation is to ask any suppliers of electricity or natural gas that may contact you if their pricing approach meets the GML requirements for an open competitive process as MEGA’s does. Participation in the MEGA program provides this guarantee.

For further explanation, the Office of the State Comptroller offers guidance on the provisions in GML § 103. Visit: https://osc.state.ny.us/localgov/pubs/piggybackinglaw.pdf