, Newburyport, MA

May 25, 2013

Town looks to lower energy cost

With program, Salisbury seeks to save residents 7 percent on monthly bills


---- — SALISBURY — As any member of a wholesale shopping club will attest, buying in large quantities usually results in getting a lower price per unit. And thanks to Town Meeting’s recent action, that premise could mean local residents get to save on their electric bills in the future.

On Monday night, Salisbury Town Meeting was the first community in the Merrimack Valley to approve aggregating the town’s energy load, or add together the total electrical usage for all the town’s electric utility customers, in hopes of lowering energy costs. The approval begins a process that will take the accumulated mass, and go out to the electrical supply market in a competitive bid format to get a lower price per kilowatt hour for all participating.

According to Town Manager Neil Harrington, this is a relatively new idea in Massachusetts, but one that’s worth pursuing. The passage of the warrant question Monday night is just the beginning of the process that could take from six months to a year to complete. But when done, it means savings for the town’s electrical users. Plus, he added, anyone who does not want to take part can opt out.

The notion was brought to Harrington’s attention by Leo Sullivan of Global Energy, a Massachusetts company.

Harrington said, Salisbury’s aggregate energy load can also be combined with other participating communities, resulting in a larger total. Customarily, he said, the larger the pool, the greater the savings.

“We’re not seeking to rush into this, and we’re looking to join with other communities,” Harrington said. “Global Energy is working with the Merrimack Valley Planning Commission on this, and the Planning Commission is reaching out to its communities to see who’s interested.”

Salisbury is the first town that’s approved the process, which all cities and towns must do to take part.

Allowed through a law passed in the state a few years ago, Sullivan said, only a few communities in Massachusetts are involved, so far, like Ashland and Marlborough. But, he added, it’s a common practice in Ohio and Illinois, where more than 800 communities are on board.

The nod from Town Meeting is only the start of a lengthy process, Sullivan cautioned, but one he believes could result in a savings of at least 7 percent on monthly electric bills.

“With approval at Town Meeting we will now go out and request a load profile from National Grid (Salisbury’s electric utility),” Sullivan said. “The profile tells us how much energy is used and when it is used.”

The state Department of Public Utility reviews the process and must approve it, Sullivan said.

Attuned to the fluctuations in the energy market, Sullivan said, when the market is right, using the aggregate total and profile, a “request for proposals” will go out to energy suppliers like Direct, Dominion or Consolidated asking for a bid.

The town can then enter into an agreement for the sale and purchase of electrical energy and other related services for a term of more than three years. The length of the term of the agreement will depend on market consideration, Sullivan said.

“We’re looking at a minimum of 7 percent savings by using the process,” Sullivan said. “If we can’t save 7 percent, we’ll wait until we can.”