Lacey Community Energy Aggregation Update
The Lacey Community Energy Aggregation (LCEA) was launched in 2013, with the goal of using bulk purchasing power to procure electric power supply on behalf of residents at a lower price. Since the LCEA launched its first round program there has been 3 successful ‘rounds’ of the LCEA. Unfortunately, energy market prices skyrocketed in 2022. While prices have come down since their highs, we are currently unable to obtain favorable pricing to procure a new supply contract to replace the expiring contract with Energy Harbor, and all LCEA-participating residents will be returned to the JCP&L tariff for power supply effective October 2023. There is nothing Lacey residents need to do to effectuate this change. The LCEA and its energy agent, Gabel Associates, Inc., have been closely monitoring the energy market for savings opportunities and will continue to do so. The LCEA will notify residents if and when a new contract is signed, and the program is again active. Please monitor the Lacey Township (“Township”) website for any updates. See below for further details.
The LCEA has been monitoring market conditions, in consultation with its energy consultant, Gabel Associates, Inc., for opportunities to achieve the program’s goal of obtaining electric power supply for residents at a lower price than power supply provided by JCP&L. While energy market prices have abated somewhat from their peaks in Fall 2022, prices remain significantly higher than a couple of years ago.
In February 2023, the utility, JCP&L completed their annual wholesale power auction to procure energy supplies for their Basic Generation Service (BGS) customers. On the energy consultant’s recommendation, the LCEA awaited the announcement in Spring 2023 of the utility’s wholesale power auction results and the resultant retail tariff prices which became effective June 1st for this coming year. (Utility tariff prices run on an annual cycle from June 1st through May 31st and incorporate utility auction results from the prior three years. In the case of rates effective June 1, 2023, the tariffs incorporate 2021, 2022 and 2023 BGS auction results. After these new tariff prices were announced, the LCEA has been better able to assess whether there is a near term opportunity to achieve its goals.
Upon review of the new utility tariff rates, LCEA and Gabel have concluded that the new JCP&L rates effective June 1, 2023, have increased somewhat over the prior year’s rates; in conjunction with modest improvements in energy market conditions, the gap between utility and supplier rates has narrowed somewhat. However, despite the narrowing of this gap, utility rates are still slightly more favorable to Lacey residents at this time than third party supplier rates. Therefore, near-term, the lowest-cost power supply option for Lacey residents is the utility Basic Generation Service tariff. As a result, Lacey has held off with the implementation of a Round 4 LCEA contract and all LCEA-participating residents will be returned to the JCP&L tariff for power supply effective with their October 2023 meter read. There is nothing Lacey residents need to do to effectuate this change.
Provided energy market conditions remain consistent or perhaps even improve further, LCEA and Gabel expect that a GEA program may be successful after the 2024 utility BGS auctions are complete, and the NJ utilities file their new tariffs that become effective June 1, 2024. By next year, the last of JCP&L’s ‘cheaper’ wholesale supply contracts that pre-date the change in energy market conditions will have expired, resulting in expectations for further utility tariff price increases next June. It is anticipated that, at that time, there could be a realistic opportunity for LCEA to deliver on its goal of obtaining a price that beats the utility tariff price. As GEA programs typically take six months to implement, LCEA and Gabel Associates Inc. anticipate starting to plan for a competitive bid process at the end of the 2023 calendar year, provided market conditions remain similar and/or show signs of further improvement.
LCEA and Gabel will continue to monitor energy markets for improvements. If a future bid results in competitive pricing and the LCEA awards a new contract for a Round 4, eligible Township residents (all residents except those that have their own solar generating system or their own third party supply contract, or those residents who have requested to be placed on the program’s ‘Do Not Disturb’ list), will be sent a mailing informing them of the details of the new contract, after which residents would have the choice of opting-out of the new program if they do not wish to participate. Again, no further action will be necessary for residents who want to participate in the GEA program.
We appreciate your understanding and look forward to working diligently with our consultant in the near future to achieve GEA supply options for our residents. Should you have any further questions, please feel free reach out to Gabel Associates at GEAemail@example.com.