NEW SCOTLAND — The New Scotland Town Board took its next step toward driving down residents’ electric bills, setting a public hearing for Dec. 11, for a proposed law that would authorize the creation of a Community Choice Aggregation program. 

If adopted, the law would allow New Scotland — in concert with nine other local municipalities — to procure power on behalf of its residents, using residents’ collective buying power to drive down energy costs while also allowing residents to choose the source of the electricity generation. 

Even with the law’s adoption, the town can still walk away from the deal without consequence. 

“The law is to say the town and [the Municipal Electric and Gas Alliance] are proceeding with the process, meaning MEGA can move forward with its RFPs and start to solicit bids,” Supervisor Douglas LaGrange said of requests for proposals. 

MEGA is the CCA program administrator, implementing the entire program on behalf of the town as well as connecting the municipality with a power supplier. 

With the law in place, MEGA would go out to bid to find the best electricity rates for participating municipalities. The minimum number needed for an aggregation is about 40,000 customers; as of Oct. 10, MEGA’s Capital Region Aggregation had already exceeded number.

Locally, National Grid owns and operates the physical electrical infrastructure. If customers purchase their electricity through National Grid, they are billed a merchant-function charge: what it costs National Grid to go into the marketplace to buy the energy and to sell and supply electrons to the customer.

So a CCA would take the supply portion away from National Grid; however, if the power were to fail, it would still be National Grid showing up to make repairs. And customers’ electricity bills would still come from National Grid; what would change is that, where the bill says, “Supply,” the charge would be from the CCA supplier.

MEGA requires bidders to provide rates for different contract terms, for example, what the electric rate would be for 12, 24, or 36 months. The terms and rates are calculated for both the generation of traditional grid-mix electricity or renewable energy. 

Customers in a MEGA-run CCA program in the Southern Tier will have two years of fully-fixed rates for both traditional and renewable electricity. For example, for a CCA customer in the Southern Tier looking to purchase electricity from 100-percent renewable sources, it will cost him or her about 5.7 cents per kilowatt hour; traditional (electrical grid) power costs about 5.1 cents per kilowatt hour. The local electric supplier, the New York State Electric and Gas Corporation, charges about 5.3 cents per kilowatt hour.

After receiving bids, MEGA would come back to New Scotland with its best bid and then undertake a public-education program — a 60-day process — to apprise residential customers of the price the organization had procured. And, if MEGA comes back to New Scotland with less-than-impressive bids, LaGrange said, the town can still walk away from the deal without consequence. 

Community Choice Aggregation is an opt-out program, meaning that, if New Scotland chooses to enroll in the CCA, residents would be automatically enrolled and would receive their electricity from the new supplier. A study from the United States Department of Energy found that, on average, between 5 and 15 percent of eligible customers choose to opt out of a CCA. 

After the public-education period, a letter would be sent to customers on town letterhead — but written and mailed by MEGA — giving customers three ways to opt out: by phone, online, or by sending back the mailer they received.

After a 30-day opt-out period, the CCA program would begin.

“Generally speaking, a municipality could make it through all of the steps in around a year or a bit more,” Louise Gava, a CCA project leader with MEGA, told The Enterprise in June about how long it would take to implement a CCA program. ​