The following letter was published in this week’s issue of the Gazette.
To the editor:
I understand the frustration of Jon Mckeon (The Gazette, week of Nov. 8/14) but his criticism of the Community Choice Aggregation (CCA) program is not entirely accurate.
Many Croton residents are under the impression that CCA promised rates lower than Con Ed rates, but this is not true. As Brian Pugh artfully phrased it (The Gazette, week of Nov. 22/28), the promise is that Croton residents will receive pricing “lower than the 2015 Con Edison” pricing.
Of course Mr. Pugh’s statement is misleading, as is often the case with his comments about CCA. Mr. Pugh won’t tell you this, but he is comparing the non-ESCO price to the ESCO price and touting the savings. That would be a fair point, if Mr. Pugh was honest and acknowledged that a large part of the CCA savings comes by reason of CCA being an ESCO.
In addition, pricing for both Con Ed non-ESCO pricing as well as the ESCO now known as Constellation has dropped since 2015, and so everybody’s pricing is lower than in 2015. The main input to NYS electric generation is natural gas, and gas hit a 20-year low in the first half of 2016, which resulted in lower electricity prices. It is rather like someone waiting till Black Friday and “guaranteeing” that the flat-screen TV is priced less than it was the week before.
We have heard for years about how much we would save thru the supposed power of bulk buying. The common number was in the hundreds of dollars per year. But if you look at the source of those numbers, you will find that Sustainable Westchester never said those numbers directly. They only promised that the pricing would be lower than the higher pricing of years gone by, which was self-evident since the market price was lower than it had been previously. That is a math tautology, not rational argument.
If you want to see how savvy CCA is in negotiating pricing when they are backed by the power of laws pushing hundreds of thousands of people into their bulk buying pool, the data is available. The CCA uses Constellation and is charging $0.0771 per kWh on a 24 month fixed plan. An individual can use Constellation and the current rate is $0.0789 per kWh on a 36 month fixed plan.
The difference is $0.0018 per kWh. If you use 300 kWh per month, that is 54 cents per month or less than 2 cents per day.
For some people, 2 cents is a lot of money and those people will appreciate the bulk buying power that gives them those savings. But if you don’t like CCA for whatever reason, you can sign-up online for a fixed-price contract on your own with Constellation or several other alternative providers known as energy service companies (ESCO).
“Many Croton residents are under the impression that CCA promised rates lower than Con Ed rates, but this is not true. As Brian Pugh artfully phrased it, the promise is that Croton residents will receive pricing “lower than the 2015 Con Edison” pricing. Of course Mr. Pugh’s statement is misleading, as is often the case with his comments about CCA.”
We like to think that the power companies are taking advantage of us and rolling in excessive profits. In reality today’s electricity supply marketplace is intensely competitive and margins are tight, which is why Con Edison sold its ESCO subsidiary to Constellation in the first place. And the longer you lock in a price, the more volatility risk is assumed by the ESCO. In fact my rate is less than rate CCA customers will be paying in 2019 because I signed up with my ESCO when prices were lower and I signed up for the longest term.
The CCA price is almost always lower than the Con Ed price, but this is primarily due to the savings that can come from using an ESCO. There are a lot of people in Croton who are too lazy or don’t think it worth the effort to spend 10 minutes to sign up for an ESCO, and for those people the government forcing them into CCA will save a few dollars.
CCA and its promoters such as Mr. Pugh do make a lot of misleading and even false statements, and that has always troubled me since there are positive aspects to CCA which can be publicized without having to resort to deceptive practices. But CCA is not a bad program for Croton residents, and if Mr. Mckeon is unhappy with being forced into CCA, my suggestion is to simply sign up with Constellation or another ESCO directly.
Paul Steinberg
Croton-on-Hudson