Who is a member?
Our members are the local governments of Massachusetts and their elected and appointed leadership.
Stephanie Mealey, Hearing Officer
Lauren Morris, Hearing Officer
Department of Public Utilities
1 South Station, 3rd Floor, Boston
Delivered electronically
RE: D.P.U. 23-67
On behalf of the 351 cities and towns of the Commonwealth, the Massachusetts Municipal Association is writing to submit comments regarding the Department of Public Utilities investigation on municipal aggregation. We deeply appreciate the interest of the Department to streamline and modernize the process to review and approve municipal aggregation program proposals.
Deregulation of the electric industry through the passage of the Electric Industry Restructuring Act of 1997 provided an important opportunity for municipalities to manage electric service provision and aggregate electricity purchases on behalf of their residents. Municipal aggregation has since provided many benefits to its customers, including higher renewable energy content in electricity services, competitive pricing, and relative price stability. This has allowed for the implementation of unique and targeted products that represent the wishes of residents and help the community meet its clean energy or climate goals over time. Most importantly, municipalities have a choice to engage in aggregation and a voice to advocate for a program that fits their needs.
We appreciate the opportunity to submit comments regarding the Draft Guidelines for Municipal Aggregation and Draft Template Plan. The MMA is pleased to see a body of guidelines and existing rules aggregated into one guidance document for municipalities to more easily follow. Below are suggestions on specific elements of the Draft Guidelines and Template Plan to ensure the investigation does not impose new and unnecessary restrictions on municipalities and their existing, pending, or future programs.
Comments on the Department’s Proposal
Launch Date Specifications
The Department has proposed in Section IV, Subsection B.1 of the Draft Guidelines a new series of requirements for communities to include a proposed launch date for municipal aggregation programs (see page 11 of Appendix A). Specifically required is a launch date within 120 days of filing for the expedited review pathway, or within 180 days of filing for other plans. If municipalities do not launch their programs by that date, they face a six-month waiting period before they can re-attempt to launch the program.
This provision undermines the ability of a municipality to monitor the electric market over time and select the date that provides the best result for the community. Without local flexibility on the program’s launch date, the municipal aggregator could miss out on opportunities to provide significant cost savings because of unique market conditions that change on a day-to-day basis. Further, Subsection B.1.3 would allow the Department to revoke approval of municipal aggregation plans if they fail to launch within two years of approval without notice. A notice of an approval’s revocation by the Department to a municipality that fails to launch programs within the two-year window would only bolster communication between parties. We recommend an addition of such a requirement for the DPU be added as well.
By imposing the new requirements outlined in Subsection B.1, the ability of local governments to make decisions on program launch is severely diminished. These powers are fundamental to the value of municipal aggregation and deregulation; they should not be stripped away without further stakeholder engagement and education on the rationale behind this provision.
We respectfully request the Department to reconsider Subsection B.1, which serves no identifiable purpose from a municipal perspective. One suggestion would be to delete Subsection B.1.2 in its entirety, removing an unnecessary six-month waiting period for communities that do not launch their programs by the specified date. This would result in a more flexible two-year window where local officials could launch their program at any time within two years of approval and still be able to capture opportune pricing or contracts. Communities that have yet to aggregate electricity on behalf of their residents should not be punished with less flexibility.
Excessive Specificity Regarding Renewable Product Offerings
The Department also seeks to require products be pre-specified prior to program approval and mandates that plans include an estimated level of renewable energy content in any product in Section III, Subsection B.2.C (page 6). The Guidelines indicate that “an estimated range” is acceptable. The Draft Template Plan indicates that a potential range of renewable energy content can be provided, but it is again unspecified (see Section 1.B of Appendix B, page 3).
This provision is troublesome and unnecessarily complicates the existing process. When a community submits a plan for approval, they do not know exactly what the products will contain, particularly the renewable energy content. Product offerings are best designed after obtaining market pricing. Rather than micromanaging specific products and their composition, we urge the Department to not require such detailed information prior to approval. This rigid specificity prior to approval removes necessary local control, especially if products need to be adjusted later in the process. Moreover, Section IV Subsection C.1.1.1 (page 11) requires an Opt-Out Notice that contains all product prices before a program is launched to accommodate the Department’s desire for this information.
Another example of unnecessarily burdensome requests imposed by the Draft Guidelines is the instruction that communities avoid product names such as “green,” “clean,” “cleaner,” or descriptions using those terms (Section III, Subsection B.2.C (page 6)). Local leaders understand how to communicate well with their residents in terms they understand. Municipal officials and staff do this daily and are constantly tuning in to their residents’ needs and concerns. The 177 previously approved aggregation programs were able to successfully explain the products without overcomplicating the names and offerings. Communities that have yet to create municipal aggregation programs should not be required to avoid these very common descriptors that are becoming increasingly common as information on climate change and electrification spreads nationwide.
Concerns Regarding the Expedited Pathway
As mentioned briefly above, the Department has proposed an expedited review pathway that municipalities may choose to follow should they desire an approval of their proposed plan within 120 days. To be eligible for this option, municipalities must follow the Draft Guidelines and Template Plan, not straying from any of the specific elements prescribed therein. While we understand the interest in simplifying the process from the Department’s viewpoint, it’s very concerning that programs seeking expedited review may offer only two products to their customers: one with a renewable energy content equivalent to basic service under an electric distribution company (EDC), and one that can offer additional renewable content at a specified level. Should communities seek to include creative elements or more products, they will not be eligible for expedited review and can assume approval within 180 days of filing with the Department.
Municipal aggregation programs currently operating in Massachusetts are not held to this strict standard. As a result, cities and towns have successful programs with three or four products, allowing customers to choose between a standard product and products with more renewable content. This allows customers to select the product they desire and can afford while gradually helping the municipality meet its clean energy and/or climate goals over time. Forcing communities that want an expedited review into this one-size-fits-all approach with only two products removes important flexibility and benefits for their customer base. Most municipal aggregation program proposals vary only slightly from order to order; the inclusion of supplemental product offerings should not significantly lengthen the review process.
We expect that communities that have monitored the Department’s challenge in processing and approving programs over the past several years will now turn to the expedited pathway, hoping for a more appropriate approval timeline. But we fear this lost local flexibility and the requirement to offer only one unique product will underwhelm local officials as they determine its viability. This would present a lost opportunity for a streamlined process with the potential to undermine the historical success of municipal aggregation. We urge the Department to revisit the requirement detailed in Section 1.B Paragraph 2 of the Draft Template Plan that demands such an inflexible approach.
Uncertain Approval Expectations
As you know, the timeline for review and approval of new programs has frustrated many of our members for years. Despite the honest intentions of the DPU, the MMA is concerned about the Department’s ability to follow through with these projected approval timelines without increasing internal capacity or providing improvements to the review process itself. While the Draft Guidelines indicate that the 120-day expedited review is an expectation, the Department is not required to complete its review within a certain number of days. This matter is further troubled by the requirement to include a program launch date. The Draft Guidelines even indicate that the Department “will ask the Municipality to update the proposed date upon approval of the plan” for non-expedited plans (Section IV Subsection C.1.1.1 (page 11)). It would be both unnecessary and ill-advised to specify a launch date that could be later adjusted by the Department.
Further, the Department indicates that a preliminary review will occur within the first 30 days of submission to determine a program’s compliance with the expedited review requirements. The Draft Guidelines do not specify a process for a community that fails that initial review. For example, will communities be able to continue with the expedited review timeline when all necessary documentation and fixes are submitted to the Department, or does such a program get delayed in favor of the prompt review of fully compliant submissions? The Draft Guidelines indicate that “The Department will prioritize the review of new Plan filings that comply with these Guidelines … over those new Plan filings that do not” (Section V.A, page 19). This lack of clarity creates even more concern for municipal partners.
The binding launch date requirement, the uncertainty of the Department’s ability to review new expedited or non-expedited plans within the suggested time frames, and the potential need for these launch dates to be updated upon approval all highlight the unnecessary micromanagement of municipal aggregation program details. Municipalities are better suited to decide when their program will launch and the Department should not require such information for expedited or non-expedited program applications.
Amended Plans
The Draft Guidelines and Template Plan indicate that communities who change their product offerings are required to submit an amended plan to the Department for review and re-approval. Municipal aggregators have enjoyed relative flexibility over changing or updating products to date while following existing procedures on customer notification and current consumer protection requirements. These small changes to products were not specified in previously approved program plans due to the flexibility granted through the existing process. Should any municipal aggregation community — including the 177 active programs — seek to adjust their renewable energy content of even one product offering, they would now be required to wait for the Department’s approval before updating the product.
Municipalities often change the renewable energy content of their products over time and in a gradual manner to slowly and transparently progress toward local clean energy goals. Such an action does not currently trigger a full re-evaluation of the program and does not impact the Department’s workload in a significant way. How will the additional review of every price and renewable energy content change — for every municipal aggregation product in the Commonwealth — impact the ability of the Department to complete reviews within any suitable timeline?
As presented, communities would not know what to expect from the Department should they file for an amended plan, as no timeline for review or commitment to prioritize small adjustments has been made. We respectfully request the Department to reconsider this addition and find a preferable solution that will not further delay the important work of the Department or the energy goals of cities and towns.
Termination of Programs
Finally, the MMA has concerns over the new proposal regarding termination of municipal aggregation programs covered in Section IV Subsection D3.3 (page 19). This provision requires a municipality that terminates its program and then later wishes to offer municipal aggregation again to completely reinitiate the process, including obtaining new local approval for municipal aggregation. To force communities to return to Town Meeting or the City Council to re-approve a previously vetted course of action is duplicative and disrespectful to the time and effort of local officials who already engage in a thorough local review process. Such a requirement could force municipal officials to wait several months to begin the process, which has taken more than three years for some municipalities to complete. Understandably, mechanisms in the Draft Guidelines that would lengthen the process for municipal officials and their staff are unfavorable. Ultimately, this requirement would negatively impact the residents who will miss out on cost-saving opportunities in the marketplace as a result of this provision. We request the Department omit the requirement to re-obtain local approval.
Summary
This investigation is well intentioned but currently lacks meaningful procedural improvements to speed up the Department’s internal review process. Instead, the proposed rules would be imposed on municipalities to institute rigid, inflexible programs which the DPU can review promptly. The customizations and choices offered to municipalities are currently what drive communities to aggregate electricity. Attempts to remove the benefits of municipal aggregation, such as flexible launch dates and local control over product offerings, diminish the value of deregulation and the good work local officials have undertaken to build functional programs across the Commonwealth.
Through the Draft Guidelines, the Department effectively asks municipalities to bear the burden of reducing review timelines — instead of increasing staffing levels or capacity internally — under the guise of consumer protection and “streamlining” the process. Municipal aggregation programs succeed because they benefit customers and provide a reliable alternative to basic service through an EDC. As the volatility of the electricity market has impacted the budgets of residents in recent years, there has been an understandable interest to provide competitive pricing to customers, even if aggregation programs cannot guarantee savings. The potential for families to budget for electricity over a longer contract period provides stability compared to investor-owned utility rates, which change twice each year.
Municipalities seek to protect consumers from bad experiences with basic service or third party suppliers. A program that is designed and vetted by local leaders carries credibility as well as accountability to residents. Strict micromanagement of established, pending, and future municipal aggregation programs does a disservice to individuals and families who count on their municipal leaders and employees to act on behalf of their interests. Communities are partners in this work and are committed to finding solutions that work for both parties without provoking further distrust.
We echo the many comments of our members who have diligently submitted comments regarding this investigation, providing important concerns and feedback. We respectfully urge you to preserve local flexibility over aggregation programs, which municipal leaders have skillfully managed and monitored for more than two decades.
We look forward to a continued partnership with the DPU, working together to find suitable solutions for the Department as well as the 351 cities and towns of the Commonwealth. We greatly appreciate your consideration of our comments, and if you have any questions, please do not hesitate to contact me or MMA Legislative Analyst Josie Ahlberg at jahlberg@mma.org at any time.
Sincerely,
Adam Chapdelaine
MMA Executive Director & CEO