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53% SOS Rate Hike Prompts Call For Easing Rules For Opt-Out Muni Aggregations (0 Launched To Date)

August 25,2017

An editorial in the Johnston (RI) Sunrise has called for easing requirements for the implementation of opt-out municipal electricity aggregations, in the wake of a 53% increase in residential default service rates that was driven by a spike in capacity market prices (see story here)

The editorial starts with the premise that, "regular, everyday ratepayer[s]," cannot access the savings from competition, and allege there are minimal savings from individual retail supply offers.

While opt-out municipal aggregation is authorized under Rhode Island law, the Sunrise says that statutes governing aggregations create a barrier to implementation.

Current statute requires a ballot initiative to be approved by voters to implement an opt-out aggregation

Furthermore, under current statute, aggregations may only proceed if their rate is lower than the SOS rate (except if the municipality can prove the rate will beat SOS in future years, or if the rate includes green energy)

The Sunrise backs two pending bills -- H5536, which has passed the House, and S0877 -- which would remove these two requirements. S0877 has been favorably recommended by a Senate committee.

Should the legislation pass, it will be another example of capacity markets ruining retail markets, as Rhode Island would likely quickly follow the example of Massachusetts where some 100 municipalities (or one-third of the state) have essentially closed their customers to the retail market via aggregations which do not operate on the same playing field (due to their opt-out power)

See the Sunrise's editorial here

Rhode Island   Municipal Aggregation  

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