Municipal Aggregation is the way most commonwealth communities get electricity. Seventy percent of the total population of Massachusetts is served by 215 of 351 municipalities. In 2024 Massachusetts municipal aggregators had exceeded both Basic Service and Competitive Supply in number of customers served and also exceeded utility Basic Service in energy served.
Municipal aggregation is so popular because it’s outperformed the monopoly (“Basic Service”) and deregulated (“Competitive Supply”) options out there for both lowest cost and greenest content, allowing communities to aggregate the purchasing power of many small customers to negotiate better terms from suppliers.
Aggregation typically offers lower rates compared to either Basic Service or Competitive Supply. Competitive Supply suppliers often charge higher rates than municipal aggregation and even Basic Service about 3 cents more than the average Basic Service rate in 2023.
Aggregation also gets greener power. Many buy certificates from out of state renewable projects, but of the 215 total municipal aggregations, 69 cities and towns offered New England-based renewable content above 5% through Class I Renewable Energy Certificates. A recent study showed their price being lower than Basic Service 79% of the time. Without paying more than Basic Service, they have purchased 1.5 million megawatt hours (MWh) per year of renewable energy facilities in New England above state requirements, equivalent to the annual electricity demand of about 250,000 homes or about 600 MW of onshore wind turbines.
Indeed municipal aggregation is one of the great success stories of Massachusetts energy policy, invented here in 1997 and copied since then in 10 states representing half of U.S. energy market, with 2000 municipalities serving 40 million Americans. But Massachusetts has done little to learn from the newer municipal aggregation models that have evolved since, known as “Community Choice Aggregation” (CCA).
Instead of buying Renewable Energy Certificates, CCAs use municipal aggregation to develop new local renewable energy resources. California CCAs have used municipal Green Bonds and private equity investment to do this using a newer municipal aggregation model called “CCA 2.0” and built over 20,000 MW of new renewable energy in California. Compare that to Massachusetts merely buying power from 600MW mostly from already existing facilities.
That’s $35B of investment in new local renewables, without higher rates. That’s real change that reduces carbon and reduces the need for new fossil or nuclear power plants. Building, not just buying.
CCA can dramatically accelerate the real deployment of advanced onsite energy systems here in Massachusetts that integrate solar, energy efficiency, renewable heat, and electric vehicles in our communities. Aggregation can also make these advanced money-saving technologies affordable to all. We can get the multi-gigawatt scale of investment achieved in California, but focus it locally on rooftops, parking lots and brownfields, and design them to serve local demand instead of exporting back to the grid like most all solar developers now do. This will save money for all Massachusetts ratepayers by freeing up the grid instead of paying for more grid and more distant power plants or just buying more certificates.
But Massachusetts is stuck in the old import-export model. California’s CCA model launched in 2010. The Department of Public Utilities has not only failed to encourage innovation by municipal aggregators but has actively blocked them and ignored their petitions to implement energy efficiency, such as by the city of Lowell.
Municipal Aggregation is an underutilized resource in the commonwealth’s efforts to increase renewables and reduce carbon while lowering utility bills. Senate 2301, sponsored by our local legislative delegation (Mark, Sabadosa, Blais, Comerford, Whipps and Domb) are now before the Joint Committee on Telecommunications, Utilities and Energy, would make two surgical changes to help turn things around.
The “Local Power for Local People” bill will make utilities facilitate connection of local renewables that don’t need to export onto the grid; and will direct the state regulator to follow existing law allowing municipal aggregators to use funds collected from their residents and businesses to pay for local energy efficiency measures.
Standardizing utility tariffs for Advanced Distributed Energy Resources that don’t need the utility to take the power will reduce cut utility waste to free the grid for everyone else, removing bureaucratic cost and time barriers to community-wide decarbonization efforts. Requiring the state regulator to obey existing law allowing municipal aggregators to administer locally paid customer surcharge funds is just a fair and sensible to ensure the funds are invested locally.
Local Power for Local People, not new nuclear power plants, new transmission lines or massive new grid batteries, will get Massachusetts to a real energy transition.
Paul Fenn is founder/president of Local Power LLC, based in Williamsburg.