West Orange’s energy aggregation program suspended

WEST ORANGE, NJ — In 2013, the township of West Orange adopted an ordinance to create the West Orange Community Energy Aggregation program, which is designed to save residents money on their electricity bills. Shortly thereafter, the WOCEA program conducted its first competitive bid and successfully awarded a power supply contract to ConEdison Solutions for a 21-month term. The contract began in March 2014 and will expire in December 2015.

ConEdison competitively bid a fixed price of electricity of $0.1045/kWh. When the contract was initially awarded in late 2013, the township anticipated that the contract would save customers approximately 8 percent, or $120 off of the PSE&G tariff price for power supply over the life of the contract. Because the PSE&G tariff prices have risen over the past two years, the actual savings for West Orange households have been well over 10 percent, with average savings exceeding $150.

The township recently announced a rebid of the West Orange Community Energy Aggregation program — WOCEA Round II. The township will for a second time seek competitive bid prices from licensed suppliers and will aggregate the combined load of all residential customers in the township. The township will only award to another power supplier if the rate of electricity is lower than currently available from their electric utility.

Since March of 2013, the township has closely monitored energy market conditions and found that third-party energy rates dramatically increased after the winter of 2014, which experienced unusually cold weather known as the “polar vortex.” As such, customers who have been enjoying the fixed rate offered by the WOCEA program have achieved tremendous savings compared to independent shoppers, according to the township. However, the township has determined that it is in the best interest of the WOCEA program for residents that are currently supplied by ConEdison Solutions to be temporarily returned to PSE&G default tariff supply service upon the contract expiration this December.

As a result, the WOCEA Round II program will be delayed. Since the current contract with ConEdison is set to expire in December, all WOCEA customers will be seamlessly returned to PSE&G’s tariff and billed for the supply of electricity by PSE&G for those months. Once the market conditions improve and the township successfully bids a new contract, customers will receive a notice in the mail containing the details of the new contract term and price.

In the meantime, WOCEA participants will receive a notice from PSE&G in November notifying them that ConEdison is returning them to PSE&G power supply effective with their December 2015 meter read. Therefore, starting with the PSE&G bill received in January, residents will begin to see PSE&G “Basic Generation Service” charges appear on their bill in place of ConEdison Solutions charges. PSE&G’s state-approved Basic Generation Service charge for the winter months is approximately $0.1213/kWh. As a result, residents’ supply cost under the PSE&G tariff will be approximately 16 percent — $11 per month for the typical township household — higher than under the expiring ConEdison contract price.

There is nothing that residents need to do; once the township has conducted a bid and received favorable prices for the WOCEA Round II program, residents will receive further information and instructions concerning a new contract. Depending on market conditions, the township is hopeful that residents will receive this notification in early 2016, and that the new WOCEA Round II contract will commence as early as March or April 2016.

For more information about West Orange’s energy aggregation program, visit www.westorange.org.