Community Choice Aggregation
An individual ratepayer can purchase Natural Gas Supply from an alternative provider. It doesn't have to come from National Grid. This option became available in 1998 when energy markets in New York State were deregulated.
A Community Choice Aggregation (CCA) program enables eligible residential and small business ratepayers to pool, or "aggregate", natural gas utility accounts and leverage the total volume to negotiate a better and more stable supply price, similar to buying a product in bulk from a big box store. CCA also provides opportunities to include a higher percentage of green energy.
Westchester Power CCA saved an estimated $15 million for 130,000 ratepayers, in aggregate, over 2.5 years. That's an average of $115 per household!
The Town of Hempstead is currently taking the first steps to initiate a CCA program, similar to the one in Westchester, for Natural Gas.
How It Works
Your National Grid bill is split into two parts - a supply charge and a delivery system charge. A CCA program aims to reduce the supply charge by procuring cheaper natural gas through a competitive third-party bidding process. The delivery system charge remains unchanged. Participants continue to receive the same bill and the same level of service from National Grid.
All eligible residents and small businesses are automatically enrolled in the CCA program if the town can procure savings of 5% to 8% (about one monthly bill) of the average of the past 12 months of utility supply charges, and when the new price favorably compares to the 12 future months of market-priced Natural Gas prices.
If for any reason, a ratepayer doesn't wish to participate in the Town of Hempstead CCA, they can opt-out at any time and switch back to National Grid pricing without penalty.
CCA pricing remains fixed for the duration of the supply contract and looks to include at least two winters. Even if natural gas market prices were to spike during a cold winter, CCA pricing remains stable until the expiration of the CCA contract.
Costs & Risks of Community Choice Aggregation
The Town of Hempstead's Sustainability Leadership Team has conducted research into supporting the creation of a CCA program at no cost to the town or CCA participants and has concluded that the effort to create a CCA is a worthy cost-saving endeavor for town residents and small businesses. All town residents and small businesses are automatically enrolled in the town-wide CCA at no cost.
While the CCA initiative only moves forward if customers save money based on historical rates (last 12 months), natural gas pricing fluctuates month-to-month and year-to-year, reflecting trends in fuel prices. It is possible, however, for utility rates to sit below the fixed CCA rate for a few months. Customers are free to leave the program and return to National Grid pricing at any time, for any reason, and without penalty. The
Town of Hempstead will only initiate a CCA program if savings at the time of the bidding process are at least 5% to 8% of the average of the past 12 months of utility supply charges, equivalent to approximately one free month of natural gas and when the new price favorably compares to the 12 future months of market-priced Natural Gas prices.
Path to a Community Choice Aggregation
Phase 1: Adopt enabling legislation through a Board resolution
Phase 2: Select a CCA Administrator
Phase 3: Evaluation of CCA for the town
Phase 4: Present an implementation plan to the New York State Public Service Commission
Phase 5: Request data from National Grid
Phase 6: Assess the aggregate Natural Gas usage for eligible residents and small businesses
Phase 7: Go out for competitive bidding to secure lower pricing from an Energy Services Company (ESCO)
Phase 8: Sign Energy Supply Agreements with winning ESCO
Phase 9: 60-Day Community Outreach begins