Expert quells skepticism over municipal energy aggregation plans
Apprehension and uncertainty are common fears for residents of New Jersey towns that might be considering municipal energy aggregation programs, which one expert explains is very different from individual contracts that may have burned consumers in the past.
Robert Chilton, Executive Director of Gabel Associates, an energy consulting firm that specializes in brokering municipal contracts, points out that the deals that towns enter into with third-party energy suppliers are done under very strict regulations that are overseen by the New Jersey Board of Public Utilities, and include safeguards beyond the normal consumer protection regulations as well as a public bidding process to encourage competition.
"The contract terms include a lot of protections that protect against the very things that have caused some of the apprehension and bad experiences in the market, specifically the prices doesn't change for the length of the contract, customers can get out any time they want, and there are no early termination fees or penalties, so you can come and go as you please with no penalties," said Chilton.
He noted those are among the bigger issues that people have complained about over the years after entering into contracts on their own. Prices can change without an individual knowing, and many times there is fine print that includes penalties or an exit fee for wanting to opt out.
"Those kind of things are prohibited in these municipal contracts," Chilton said.
Gabel Associates has overseen contracts for about a dozen New Jersey towns, and Chilton notes that residents begin to see that there is really very little downside and a lot of potential upside to being part of a municipal energy aggregation program.
"As experienced comes in, folks get more comfortable that this is not some kind of a scam, it really is a legitimate mechanism where the town can create purchasing power for the residents that they may not have on their own, and also it's done through a process where there are protections in place, that the customers don't have to worry about reading fine print because there is no fine print," said Chilton.
Plumsted Township was the first in New Jersey to enter into an energy aggregation program four years ago, and is on it's third contract, according to Chilton.
"Folks who opted out the first time decided they want to get in the second time. They talk to their neighbors, their neighbors are happy, they save money, and so we find that as time goes by, people are more comfortable and they want to participate," Chilton said.
Also in Ocean County, Chilton pointed out Toms river is on its second contract, and in Monmouth County, Colts Neck is nearing the end of its first contract while Eatontown is in the process of bidding for its second contract.
The company also has contracts with Monroe Township, West Orange, Montgomery Township, Lambertville and West Amwell.
Contact reporter Dianne DeOliveira at Dianne.DeOliveira@townsquaremedia.com