How aggregation works
Municipal electricity aggregation is a form of group electricity purchasing. An electricity aggregation program like Valley Green Energy replaces your electricity supplier, and it changes the price that your utility, Eversource or National Grid, uses to calculate the Supply charge on your electric bill. In addition, aggregation can increase the amount of renewable energy in your electricity supply. But electricity aggregation does not replace your electric utility.
Here’s how it works:
Without Valley Green Energy
(Unless you already have a private contract with an electricity supplier)
Typically, your utility provides two services to you as an electricity customer, and your electric bill includes charges for both of these services:
|In Massachusetts, a utility’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 portion of your electric bill.|
|An electric utility also provides a second service, which is to be your electricity supplier. They purchase electricity on your behalf and charge you on the Supply portion of your electric bill for the amount you use.|
When you first open your electricity account, your utility both delivers and also supplies, or buys, your electricity.
- The Delivery portion of your bill is calculated based on regulated Delivery prices.
- The Supply portion of your bill is calculated using your utility’s Basic Service price. Basic Service prices change every 6 months for residential and small business/commercial customers and every 3 months for large business/industrial customers.
The diagram below illustrates this scenario, where the utility is both delivering and also supplying your electricity and their Basic Service price is used to calculate your Supply charge.
With Valley Green Energy
If you participate in a municipal electricity aggregation program like Valley Green Energy, your utility continues to deliver your electricity, but you no longer have Basic Service for the Supply portion of your electric bill. Instead, Valley Green Energy uses the group purchasing power of Amherst, Northampton, and Pelham to choose an electricity supplier and to determine the price of your electricity supply and the renewable energy content of your electricity.
If you participate in Valley Green Energy, the electric bill you receive from your utility will use a Valley Green Energy price to calculate your Supply charge instead of the utility’s Basic Service price.
Otherwise, the relationship between your utility and you does not change, and your electricity flows without interruption: