How aggregation works
Municipal electricity aggregation is a form of group electricity purchasing. Electricity aggregation replaces your electricity supplier, and it changes the price that National Grid uses to calculate the supply services charge piece of your electricity bill. In addition, aggregation can increase the amount of renewable energy in your electricity supply. But electricity aggregation does not replace National Grid as your electric utility.
Here’s how it works:
Without the Salem PowerChoice program
(Unless you already have a contract with an electricity supplier)
Typically, National Grid provides two services to you as an electricity customer, and your electricity bill includes charges for both of these services:
|National Grid’s primary role is as an electricity delivery company. They deliver electricity to you, maintain the poles and wires, and address power outages. They charge you for these services on the delivery services part of your National Grid electricity bill.|
|For most people, National Grid also provides a second service, which is as an electricity supplier. They purchase electricity on your behalf and charge you on the supply services part of your National Grid electricity bill for the amount you use. When National Grid is your electricity supplier, you have National Grid’s Basic Service. When you first open your electricity account, you are placed on National Grid’s Basic Service.|
The diagram below shows National Grid both delivering and supplying electricity.
National Grid’s fixed Basic Service prices change seasonally, every 6 months for residential and commercial customers and every 3 months for industrial customers, and future prices are not known.
With Salem PowerChoice
In an electricity aggregation like Salem PowerChoice, National Grid continues to deliver your electricity and you continue to call them when the power goes out, but you no longer have National Grid’s Basic Service for the supply portion of your electricity bill. Instead, the City of Salem uses the bulk purchasing power of the community to negotiate a contract with an electricity supplier that residents and businesses can benefit from, which will determine the price of the your electricity supply. If you participate in Salem PowerChoice, National Grid uses a Salem PowerChoice price to calculate the supply services portion of your electricity bill instead of their own Basic Service price.