March 15, 2020: I just got a letter from Direct Energy that the cost per kilowatt hour went up. I thought the contract price had to stay the same for the life of the contract.
Yes, that is true EXCEPT if the Federal Energy Regulatory Commission (FERC) raises the rate. At the beginning of 2020, the FERC approved a large increase in the cost power suppliers pay for use of the high voltage transmission grid which moves electricity from power plants throughout the eastern U.S. to the local PSE&G distribution system. This transmission cost increase has impacted all suppliers in the PSE&G service territory, PSE&G itself and Direct Energy.
While the contract the Township signed with Direct Energy allows Direct Energy to adjust the SEA contract price to recover this cost increase, the contract language we negotiated caps any such price adjustment to no more than the increase in PSE&G’s tariff price caused by that same government action. The Township insisted on that contract condition in order to ensure that any contract price change caused by an unanticipated government action such as this would not adversely impact the level of savings under the SEA program. So, despite the increase in electricity by Direct Energy, it remains proportionately less than the cost of electricity from PSE&G.
Exactly what is the increased cost? When and how will it go into effect?
The transmission cost increase approved by the federal government is impacting PSE&G’s tariff prices for power supply by about 1.2 cents per kilowatt-hour ($.012/kwh), in two steps. About 1/3 of that increase already took effect on February 1st 2020, and the remaining 2/3 of the PSE&G tariff price increase will take effect beginning June 2020. Under the Township’s contract with Direct Energy, the adjustment in the SEA contract price is capped at those amounts. Therefore, the SEA contract price will be adjusted in two steps, matching the changes in the PSE&G tariff.
When will the increase show up in our bill?
Specifically, in your April PSE&G bill you will notice that the SEA program contract price will increase from the current $.11005/kwh to $.11448/kwh. This price adjustment exactly matches the 1st step increase in PSE&G’s tariff price that took effect on February 1st. Effective June 1st, the SEA contract price will increase to $.12230/kwh, again, matching the 2nd step of the PSE&G tariff increase that will be occurring at that time. Because these contract price adjustments match the increases in the PSE&G tariff price for power supply, as required under the terms of the contract required by the Township, the cost savings that you are currently enjoying under the SEA program will not be impacted, and you will still receive power supply with renewable energy content that has approximately double the renewable energy content of standard energy supply provided by PSE&G.
If I need more information, or have a problem, who should I contact?
You may contact Direct Energy via phone at 1-866-968-8065 or by email at email@example.com.
Although residents who are participating in the SEA program are reminded that, under the contract the Township negotiated with Direct Energy, you have the open-ended ability to ‘opt-out’ of the SEA program at any time, for any reason, without penalty, keep this in mind: Direct Energy’s price is being increased by the same amount as PSE&G’s, which is already higher than Direct Energy’s. Therefore, if you opt-out of the SEA program and return to PSE&G for power supply, you will be subject to these higher charges, and will no longer receive the enhanced renewable energy content provided under the SEA program.
We are pleased to announce that the Township of Maplewood, in cooperation with several neighboring Essex County municipalities, has recently awarded a contract for the Sustainable Essex Alliance Renewable Government Energy Aggregation (“SEA R-GEA”) program. Under this contract with Direct Energy Services (“Direct Energy”), Township residents in PSE&G territory have the opportunity to save money on their electric bills while receiving power supply that has nearly double the renewable energy content (about 41% in total) of the standard power supply product currently provided by PSE&G! Residents are not obligated to participate in the program and may ‘opt-out’ if you so choose. Eligible residents will be receiving a package in the mail from Direct Energy in early May 2019 providing program details. Provided below is a program description.
For residents located in PSE&G territory seeking additional information, the Township has arranged a Public Information Session to be held on Monday, May 13, 2019, at 7:00 p.m. at the Municipal Building, located at 574 Valley St., Maplewood Township, NJ. The Township’s energy consultant, Gabel Associates, will be making a presentation after which, the session will be opened up to questions from residents
What is Community Energy Aggregation (CEA)?
Community Energy Aggregation is a State program that allows a municipality to conduct a “bulk purchase” of energy supply on behalf of its residents, at prices lower than the average utility price. New Jersey regulations allow municipalities to take this approach to procure energy savings on your behalf, and to also obtain energy supply that has a higher renewable energy content than State-required minimum green energy content (currently a little over 20%).
How the Community Energy Aggregation Came to Be
In March 2018, the Township passed Ordinance # 2899-19, authorizing a Government Energy Aggregation (“GEA”) program in Maplewood. Under New Jersey’s GEA law, municipalities can aggregate their residents’ electric accounts together in a single buying pool to test the market in an attempt to obtain electric power supply at a lower price than offered by the electric utility. In addition, a GEA program allows a municipality the option of seeking power supply with a higher renewable energy content than offered through the utility’s ‘default supply’ service. To create even greater purchasing power in the marketplace, the Township also formed the Sustainable Essex Alliance Energy Procurement Cooperative (“SEAEPC”) in conjunction with several other Essex County municipalities, with the aim of using joint purchasing to obtain the best possible price for renewable energy supply, in furtherance of our sustainability goals and our commitment to reduce the Township’s carbon footprint. The participating Essex County municipalities, which include Maplewood, Glen Ridge, Montclair, South Orange and Verona, jointly named the program the Sustainable Essex Alliance Renewable Government Energy Aggregation, or ‘SEA R-GEA.’
Who is Gabel Associates?
Who is Direct Energy Services?
Direct Energy Services (BPU License # ESL-0078)
Toll Free Telephone Number: 1-866-968-8065
Address: P.O. Box 180, Tulsa, OK 74101
Email Address: firstname.lastname@example.org
How does the SEA R-GEA Program work?
Even after an electric account is enrolled, residents remain free to opt-out of the program at any time during the contract. Participation in the SEA R-GEA Program is 100% optional. There are no any fees or penalties if you decide to opt-out.