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NYC Explores Municipal Aggregation

February 25, 2015 By Josh Kessler

New York City is exploring Community Choice Aggregation (CCA). On February 17, the City submitted comments with the Public Service Commission on case 14-M-0224, which would create a framework to enable CCA in New York State. In its comments, the city deemed the concept “meritorious and worthy of consideration.” The comments also included three points of concern:

1)      Unlike other states permitting CCA, New York allows default service rates to vary on a monthly basis, which more accurately reflects current market pricing. Although customers would be able to opt out, the opt-out provision could increase the cost of the supply agreement.

2)      A more thorough evaluation of program costs is necessary. The existing White Paper contains no data on costs to establish and administer the program, or comparative supply costs, and Chicago CCA customers may be paying a substantial premium.

3)      The proposed CCA structure raises concerns about the “limits and interplay of Commission and municipal authority.”

In November 2014, the Department of Environmental Conservation delivered a presentation on CCA that showed similar programs in Illinois generated initial savings of 25 percent, though the gap has since narrowed. The presentation also noted that Massachusetts customers saved 6 percent through municipal aggregation.

Governor Cuomo vetoed an attempt by Westchester County in December to establish an alternate CCA rule, in part because this effort was already under way, and because it did not align with policy objectives, such as clean energy development.

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