Mayor: Questions About Newton Power Choice Answered

NEWTON, MA — Nearly 3,400 residents responded to a questionnaire the mayor's office sent out in November asking residents how much more they'd spend on electricity if they knew it was coming from a greener source. Two months later, the mayor's office is attempting to answer some of the questions that come up most.

The city is working on giving residents a choice when it comes to how green their electricity is. The program, called Newton Power Choice, would allow residents to choose how much (if any) renewable electricity they'd like their electric company to offer.

The average household in Newton pays Eversource about $150 per month for electricity, which currently includes 13 percent clean renewable electricity as required by state law.

The program will provide a standard amount of renewable electricity automatically, above the minimum state law requirement. Next year the percent will go up to 14 percent and then hit 15 percent in 2020.

The city says Newton Power Choice will give residents more control over the environmental characteristics and price of their electricity.

See the new FAQ directly from the mayor's office below:

How do we know the energy is truly green? Is this just a feel good program?
Newton has contracted with Direct Energy to supply to Newton electricity customers only Renewable Energy Credits (RECs) produced by the types of renewable resources that qualify as Class I under the State Renewable Portfolio Standards (RPS) law.
This needs a bit of explanation. The Massachusetts RPS law requires that utilities and others that provide electricity in Massachusetts ensure that 14% of that electricity come from so-called Class I RPS-eligible renewables. Those are mainly wind and solar resources located in New England.
But the New England electric grid delivers to electricity users whatever is on the grid at a particular moment in time. Even if you pay for more renewables, the electrons that come to your home are the same as the electrons that come to all of your neighbors’ homes.
New England deals with this on a regional basis by tracking the electricity that is put into the electric grid on customers’ behalf. A neutral third party does this by issuing a REC for each megawatt-hour generated by a Class I RPS-eligible resource. The REC represents the so-called “renewable attributes” attributable to a megawatt-hour generated by a Class I resource. When you spend money for 100% renewable electricity, you are buying the number of RECs that matches 100% of your own electricity use. In other words, if you use 600 kwh of electricity per month, and you pay for 100% renewable electricity, you are buying RECs that document that 600 kwh of renewable electricity was put into the grid on your behalf. Those RECs are then retired, that is, they cannot be used by anyone else.
This system works by increasing the demand for renewable electricity relative to the supply. As the demand for RECs increases, their price goes up, which incentivizes developers to build more renewable energy resources.
Other parts of the country use this same type of system. Since there is no way to send “green” electrons to one home and “brown” electrons to another, this is the widely accepted system for ensuring that payments for renewable energy are effective in causing more renewables to be built.

Why does renewable energy cost more?

Actually, renewable energy does not always cost more than electricity generated with fossil fuels. For example, wind energy in the Plains states is cost-competitive with other types of generation. But there are a number of reasons why it often does cost more.
One of the factors accounting for the cost of renewables is the fact that modern solar and wind technologies are relatively new and still the subject of research, development, and commercialization efforts.
But even though the price of renewable energy reflects research, development, and commercialization costs, renewable energy should not cost that much more than fossil fuels. A key reason that it costs more is because the price of fossil fuels is lower than it should be by virtue of the fact that the price does not reflect their true cost. For example, mining and burning coal causes various kinds of lung disease, but the price of coal does not fully reflect that public health burden or the health care costs of the people affected. This results in what is in fact a kind of subsidy for fossil fuels.

What if I am already participating in an additional renewable energy program? Should I switch?
You may be buying electricity from one of the many competitive electricity suppliers, rather than from Eversource through its Basic Service program. Many of these supply companies market their electricity by claiming that it comes from renewable sources, and that it is less expensive than Basic Service.
Some of these claims are true. But some are not. Sometimes the electricity marketed as renewable comes, for example, from wind farms in the Plains states, where energy from wind is already less expensive than energy from fossil fuels. These renewables do not need the support that local New England resources need and that is provided by municipal aggregation programs like Newton Power Choice.
You should check the contract you’ve entered into with an electricity supplier, to see what renewable power is provided, where it comes from, what the contract price is, and whether the price is stable. Some of these companies attract customers by advertising low prices, which rise dramatically over time, and which also have steep cancellation fees. By contrast, Newton Power Choice is a City-vetted program. You can leave or join Newton Power Choice at any time. There are no cancellation fees.

Should we as residents hold off to sign up for these other renewable energy services?
We recommend Newton Power Choice, which has been carefully vetted by the City, over these other services. Some of these other services advertise low prices, but the prices may rise over time. They may also have high cancellation fees. If you sign up for these other services, be very careful to read the contract’s fine print. With Newton Power Choice, the power price is stable for the 22-month duration of the contract, and you can leave or join the program at any time with no fee.

What if I already use my own solar panels?
If you use your own solar panels you can still participate in the program. This program impacts you when the sun is not shining and you must buy electricity from the grid. During those times, you will be paying the Newton Power Choice price for electricity rather than the Eversource Basic Service price.
If you receive credits on your bill when your solar panels produce more electricity than you use and you sell it back to the grid, that will not change. Those credits will continue to be calculated using Eversource’s Basic Service price, not the Newton Power Choice price, and they will continue to appear on your bill as always.
Nothing else will change.

Does this affect the speed of repair work?
The speed of repair work will not be affected, and the quality of service that Eversource provides you will not be impacted by your participation in Newton Power Choice. Under the program, Eversource is no longer buying your electricity for you, but nothing else changes. Eversource delivers your electricity, sends you your electricity bill, and you call Eversource if your power goes out.

I’m concerned because of fixed income/inability to pay...
Right now, the standard Newton Power Choice level (i.e., with 46% additional renewable energy above the State-required minimum) will actually save you money—about $16 per month relative to Eversource Basic Service for a typical Newton household that uses about 700 kwh per month. That household will save about $13 per month as compared to Basic Service even if it opts up to 100% renewable power. Staying in the aggregation but with no renewable energy above the State mandate will be about $19 per month less than Basic Service.
The Newton Power Choice prices will stay in place for the duration of the program’s electricity contract, which is 22 months. But for residential customers, the price of Eversource Basic Service changes every six months. There may be periods of time when Eversource’s Basic Service price is less than the Newton Power Choice price. It’s likely that Newton Power Choice customers at the standard level, and perhaps even at the 100% level, will save money over the duration of the 22-month contract, but there is no guarantee that this will be the case.
Additionally, it’s important to remember that you can opt out of Newton Power Choice at any time, with no cancellation fee. Also, if you are eligible for a low-income discount, you will continue to receive it as a participant in Newton Power Choice.

Can this be an opt-in program?
Municipal aggregation cannot be an opt-in program. Massachusetts State law requires that if a city or town adopts a municipal aggregation program, it must be opt-out.

What progress has the city made in negotiating various rates for the electric generation of various levels of renewable energy?
The City went out to bid in late November 2018, soliciting prices for various electricity contract lengths and various amounts of renewable energy. The 22-month contract was extremely advantageous for the City with 60%--and even 100%--renewable energy.

Will the cost eventually come down?
The Newton Power Choice contract with the electricity supplier, Direct Energy, is for 22 months. The cost will not change during that time.
It’s not possible to predict whether the prices under the next Newton Power Choice contract, when the current contract expires in 22 months, will come down. Electricity prices are dependent on a number of factors, most significantly the global price of natural gas.

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