City to explore community power

LACONIA — City councilors authorized City Manager Kirk Beattie to negotiate and sign all documents related to an agreement with Freedom Logistics LLC to develop and implement a municipal aggregation plan to supply the city’s energy during their meeting on Monday evening.

“This just gives us the opportunity to continue this moving forward,” Beattie said. 

Councilors heard from Stuart Ormsby of Freedom Logistics, dba Freedom Energy Logistics, a niche electrical aggregation firm, who said the city could save its residents money by moving toward a different model of power delivery during the meeting at City Hall downtown.

“We’ve been active as energy consultants, assisting towns and cities throughout New England on programs such as this,” Ormsby said. “In New Hampshire we’re currently working with about 10 communities, some of your neighbors nearby include Ossipee, Hampton, North Hampton, Greenland, just to name a few.”

The city formed an electrical aggregation committee to explore providing community power to its residents due to the volatility of electricity costs over recent years. After reviewing programs offered by several consultants and discussing the benefits and drawbacks of each with legal counsel, members of the committee voted unanimously to recommend the city to partner with Freedom Logistics.

The city’s worked with Freedom Logistics in the past and, by expanding that partnership, could receive greater savings on current and future group net metering agreements, procurement services of electricity for municipal buildings, and management of the city’s community power programming while retaining full control over the program, according to an Oct. 28 city staff report. 

There is no direct or immediate fiscal impact to the city anticipated. 

Ormsby said while these opportunities are relatively new in New Hampshire, they’ve been working in other areas for close to 20 years. 

“We currently manage about 100 programs down in Massachusetts,” Ormsby said. “A wide variety of communities. Quite a few of the smaller communities out in the western part of the state, some of the mid-size cities around the 495 beltway and then our largest client is the City of Boston.”

New Hampshire’s had open competition for electricity choice for over 20 years, Ormsby said, and that’s been a success for large commercial customers who are active in the market and buying electricity supply on their own, instead of purchasing through Eversource or the New Hampshire Electric Co-op.

“The opportunities or the success rate for residential and small commercial customers has been a bit more mixed,” he said. “Fifteen to 20% of those customers are shopping in the market as opposed to buying from their local utility.”

Energy aggregation programs are targeted toward residential and small commercial customers, he said, and would allow the city to compile all of those customers into a large buying pool. With a large customer base, it’s easy to attract supplies who offer competitive rates similar to what they’ve offered large commercial customers.

The way it works is called “opt-out aggregation.” Each resident and small business not currently on a contract with a supplier would be considered in the program unless they opt out. Reaching out to customers and businesses is important so that it’s clear they don’t have to participate in the program if they don’t want to. Only customers receiving “default services” — those who are not under contract with a third-party supplier — would be included in the aggregation and they are able to opt out if they prefer.

“We like to emphasize price stability for all of us,” Ormsby said. “Buying power supply from the local utility over these last few years, you’ve seen some tremendous price-spikes in your electric bill, and that was no fault of Eversource or the Co-op, it was just market dynamics.”

Ormsby said during price spikes, programs they managed in Massachusetts remained stable. For instance, Boston maintained a $0.10 rate even though the utility rate was three times as high, he said. 

The company issues requests for proposal on behalf of municipal clients, going out into the market to achieve competitive pricing from a range of suppliers who are well-capitalized and large companies. 

“That’s important in a very volatile market like New England is,” he said. “You want to have as your provider a company that’s got the asset base to support you, a company that’s going to keep that $0.10 locked for you. The way they’re able to do that, these are companies that have large portfolios of generation, so when power prices are hitting $0.30/kWh, they’re able to maintain your price because they’re killing it, so to speak, on their generation assets.”

For a consumer, not much changes other than a single line item on their utility bill. They’d still receive a bill from Eversource, who would still read meters, maintain lines and poles and respond to power outages. 

“This is just the commodity part,” Ormsby said. “There’s the delivery, and there’s the electrons, the commodity.”

If councilors agree to the plan, it would be sent to the state utilities commission for its approval. That part of the process could be completed by March 2025, Ormsby said. Once the commission approves the plan, the program can go out for pricing on the market. If the city is not satisfied with their options, it's under no obligation to move forward.