MunEnergy offers stability in face of volatile energy market

Many Massachusetts municipalities have felt the budget shock of volatile electricity markets during the past two winters.

Electricity rates for the major investor-owned utilities have spiked by about 30 percent or more in the past year and as much as 80 percent over the past two years.

According to news reports, these increases are tied to natural gas pipeline constraints in New England, a region that generally relies on natural gas to generate more than half of its electricity. Utility companies and economists expect this upward trend in pricing to continue until pipeline and capacity solutions are developed to satisfy the increasing seasonal demand in our region.

Municipalities, focused on budget stability, certainly have reason to be concerned.

The MMA offers its members a program that can shield them from electricity market volatility. The MunEnergy program, through its endorsed energy supplier, Constellation, provides a range of procurement and usage reduction options to help municipal energy management programs. More than 100 Massachusetts cities and towns have taken advantage of the MunEnergy program, which promotes budget certainty while minimizing risk.

MunEnergy’s long-term contracts help municipalities stabilize their energy costs. Municipalities can fix their rates for up to five years.

MunEnergy contracts have been negotiated by MMA attorneys who specialize in municipal energy issues, ensuring that language is compatible with municipal solar or wind co-generation requirements.

Constellation has developed flexible, customized energy plans that enable municipalities to fix a portion of their rates upfront and purchase the rest later, using a layering strategy that takes advantage of market fluctuations. Constellation also offers an energy management tool that monitors electricity prices and market fluctuations.

Constellation’s business development managers work with each municipal customer to understand their challenges and to provide options to meet energy and budget needs.

For more information, contact Bill Bartlett at william.bartlett@constellation.com or (855) 269-1316.