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Aggregation could save Lunenburg residents money on electric bills By Dan MagazuLUNENBURG The town is poised to join the city of Marlboro and a group of towns on Cape Cod as the only communities in the state to seek bids from third party electricity providers in an effort to reduce their costs. "We're hoping to have a presentation ready for residents to vote on in time for special Town Meeting on Nov. 30," Town Manager Kerry Speidel said recently of the process known as municipal electric aggregation. "We can't offer it to the town without the approval of Town Meeting." The process is called municipal electric aggregation. "It's all about choice and competition," said Brian Murphy, president and CEO of the Colonial Power Group, which coordinates energy supply purchases for Marlboro and is hoping to do the same for Lunenburg. "By pooling residents and small businesses together, you create competition and choice that wasn't previously there." Communities in Massachusetts received the option of aggregating energy from a third party provider following the 1998 deregulation of the utility industry. Switching to municipal electric aggregation does not mean Unitil would no longer operate in town. "We're highly supportive of the idea," O'Meara said. "Anything that might help customers find a way to lower their costs we're in favor of. We're working with Colonial to provide them with any information they need." Unitil does not generate energy in its system. It purchases the energy from a supplier and then resells it to their customers. "Forty five percent of your bill comes from energy," O'Meara said. "The other 55 percent comes from distribution and a number of other things." Municipal electrical aggregation could save residents money only on the 45 percent of their bill from energy costs. Murphy said the savings could still be significant. He said the process has saved residents in Marlboro anywhere from one tenth of a penny to half a penny per kilowatt on their utility bills. "It doesn't sound like a lot, but it's a few bucks a month back in everyone's pocket," he said. "It comes at no cost to the town." The cumulative savings have exceeded $1.5 million since the city enrolled in 2007, according to Murphy. State law requires utility companies to bid on energy purchases at two specific times every year. Murphy said his company can bid on energy whenever it's most advantageous and can lock the rate in for a longer period of time. Marlboro City Councilor Joseph Delano Jr. said the concept of municipal aggregation is a good one and has achieved some savings for the city's residents. But Delano said he questions the percentage of savings Colonial keeps for itself. "From our first contract to the next, the deal got changed in such a way that the benefit (Colonial) saw was equal to the savings of all the people in the city," Delano said. "I think people should make sure they understand what the deal is and make sure it's as beneficial as possible for residents if they are going to do it. At a certain point, it may not make sense to bother with." Murphy said the percentage of savings his company keeps would be negotiated with the town. He said his company makes money only if the town saves money, so there is little risk. "We can't bring back a contract or price to the community that is higher than the local utility rate," he said. "The town has to be able to save in order for the program to work." Speidel also noted that even if the town moves forward with municipal electric aggregation, individual residents would have the option of opting out at any time. In that case, they would continue to be charged Unitil's electric rate. Murphy said 97 percent of residents in Marlboro participate in the program. Residents in Lunenburg would continue to receive one bill from Unitil if they are enrolled in the program. Lunenburg resident Cathy Clark, who has been one of Unitil's biggest critics since the 2008 ice storm, said she supports the idea of municipal electric aggregation even though it doesn't accomplish her ultimate goal of having a complete alternative to Unitil. "I think it's a fabulous idea," Clark said. "Every effort has to be pursued with regard to lowering costs given Unitil's high rates. It would be nice to see Fitchburg, Townsend and Ashby follow suit." Town officials currently buy energy in bulk for municipal buildings, which has produced significant savings, particularly for the school department, according to Facilities Manager John Londa.