Farewell and Parting Thoughts

By Cynthia A. Arcate | December 20, 2019

As I wind down my last few days at PowerOptions, I first want to thank the members of PO for the opportunity to serve you these 10 plus years. It has been a great ride, starting with our separation from the Health and Educational Facilities Authority through to now, when we are regionally recognized as the premiere customer aggregation with our energy programs and policy work.  It’s the capstone of my 35 plus year career in the energy industry. As I look to the future, particularly dealing with climate change, I am optimistic that we will find solutions, just as...

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Commercial Customers Need Protection Too

By Cynthia A. Arcate and Sean Burke | July 9, 2019

The competitive electricity supply market is tightening. Margins are thinning and suppliers are working harder to maintain their business. Most suppliers have responded to this tightening by becoming more responsive to customer desires, offering new products and services to deepen customer relationships. Other suppliers have become increasingly reliant on brokers, through channel relationships, to broaden their marketing footprint. These relationships are ripe for abuse as the broker is given significant marketing leeway, and a visible minority have resorted to unethical and manipulative practices. Much of the attention has been paid to abuses in the residential market, but shady supplier and...

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ISO Throwing Money at Misguided “Solution”

By Cynthia A. Arcate and Sean Burke | May 1, 2019

The regional grid operator, ISO-NE, has proposed to create a new compensation mechanism for resources that can contribute to winter energy security during the 2023/2024 and 2024/2025 winters. The proposal has been dubbed “Chapter 2B,” as it follows the cost of service contract given to the Mystic units (and potentially other units in the future) to ensure that they do not retire and is part of ISO’s three-part effort to address perceived winter energy shortfalls. As a threshold issue, we do not believe there is enough evidence that the region lacks sufficient winter generation to warrant these costly, out-of-market initiatives....

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Maximizing Region’s Offshore Wind Purchases

By Cynthia A. Arcate and Sean Burke | March 21, 2019

  In a concerted effort to cost-effectively reduce greenhouse gas emissions and diversify the region’s resource mix with less reliance on natural gas, Massachusetts, Rhode Island, and Connecticut have procured a total of 1,500 megawatts of offshore wind projects. This is enough generation to replace about half of the Mystic gas plants in Everett, Massachusetts slated to be paid to stay open for reliability reasons from 2022-2024. Massachusetts already has the authority to procure another 2,400 megawatts of additional offshore wind in the coming years. The costs of the initial offshore wind contracts have been lower than many predicted, leading...

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Approach Will Jeopardize Retail Competition

By Cynthia A. Arcate | September 12, 2018

The fuel security controversy in New England, particularly as it relates to the availability of natural gas in the winter, escalated dramatically with the issuance of the ISO New England fuel security study, which was followed quickly by Exelon’s announcement that it intends to shut down its Mystic units in Everett unless it receives a subsidy from ISO-NE.[1] Despite credible challenges to the study, the Federal Energy Regulatory Commission (FERC) quickly accepted the impact of the Mystic shutdown as a legitimate reliability concern and cleared the path for Exelon to recover the full costs of running the Mystic units for...

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20 Years and a Renewed Sense of Purpose

By Cynthia A. Arcate | June 11, 2018

Twenty years ago, PowerOptions launched its mission to give Massachusetts nonprofits the opportunity to purchase their electricity and natural gas as part of what is now the largest energy-buying group in the region. Then as now, the contract offered terms that are the best in the industry at no added cost to the customer. In fact, many nonprofits saw substantial savings. Robert Ciolek, then-Executive Director of the Massachusetts Health and Educational Facilities Authority (HEFA), saw an opportunity to provide added value to the nonprofits HEFA served and jumped on it. He told me years later that he knew nothing about...

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Greenhouse Goal Should Avoid Poor Decisions

By Cynthia A. Arcate | January 16, 2018

The cold weather over the last few weeks has resulted in a significant amount of electricity being generated by coal and oil in New England. But, on an annual basis, the amount of oil- and coal-generated electricity will still be about 1% or less of all of the generation in the region. It’s important to keep that fact in perspective, especially as the Commonwealth of Massachusetts’ clean energy solicitation is awarded. The Boston Globe editorial last week implied that it would be worth the expense to select the winner of the solicitation based on its ability to deliver large-scale hydro...

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Trickle-Down Benefits Reduce Energy Prices

By Cynthia A. Arcate | December 22, 2017

While there is much debate about whether the GOP tax plan will, in fact, provide economic benefits for employees and consumers in America, one clear benefit should be captured immediately: the reduction in utility rates from the reduction in the corporate income tax rate. Utilities pay taxes like any other corporation, and they will see the reduction immediately. Yet their rates are based on costs that include the higher income tax rate. The corporate rate reduction from 35 percent to 21 percent is significant and should result in significant cost reduction to the utilities—gas and electric. They should be required...

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It’s Time to Take C&I Customers Seriously

By Cynthia A. Arcate | November 7, 2017

Over the years, the four major groups representing commercial and industrial (C&I) customers in proceedings before the Massachusetts Department of Public Utilities (DPU)—Associated Industries of Massachusetts, The Energy Consortium, The Western Massachusetts Industrial Group and PowerOptions—have actively participated in numerous dockets, presenting a unique C&I customer-oriented perspective, only to have their positions dismissed with little explanation. These organizations collectively represent a majority of all C&I customers in the Commonwealth. They have energy expertise themselves, and they retain outside counsel and consultants with extensive expertise. Yet, when their views are opposed by the utilities, the Attorney General (AG) or the Department...

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Utility Distribution Company Ratemaking

By Cynthia A. Arcate | April 24, 2017

For years, many have been lamenting the ever-increasing number of rate mechanisms which fall outside of the base rate review process for utility distribution companies. There are roughly a dozen reconciliation charges, trackers and automatic adjustment charges on the bill for each gas and electric utility. Call them what you will, they all do the same thing: allow utilities to recover 100 percent of certain costs of providing service separate from their total cost of service. This is a problem because as individual costs are pulled out of the total cost of service, regulators don’t see the total picture for...

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