20220928 - Village Council Special Public Meeting Minutes
A SPECIAL PUBLIC MEETING OF THE VILLAGE COUNCIL OF THE VILLAGE OF RIDGEWOOD HELD IN THE SYDNEY V. STOLDT, JR. COURT ROOM OF THE RIDGEWOOD VILLAGE HALL, 131 NORTH MAPLE AVENUE, RIDGEWOOD, NEW JERSEY, ON SEPTEMBER 28, 2022 AT 5:45 P.M.
1. CALL TO ORDER – OPEN PUBLIC MEETINGS ACT – ROLL CALL – FLAG SALUTE
Mayor Knudsen called the Special Public Meeting to order at 5:56 P.M. and read the Statement of Compliance with the Open Public Meetings Act. At roll call the following were present: Councilmembers Perron, Vagianos, and Mayor Knudsen. Councilwoman Reynolds arrived to the meeting at 6:02 P.M. Also present was Heather Mailander, Village Manager/Village Clerk.
Mayor Knudsen led those in attendance in the Pledge of Allegiance to the flag and asked for a moment of silence in recognition of all men and women serving in the military and all first responders.
2. COMMENTS FROM THE PUBLIC
NONE.
3. INTERVIEWS WITH CONSULTANTS FOR RESIDENTIAL ENERGY AGGREGATION AND QUESTIONS FROM THE VILLAGE COUNCIL
A. GABEL ASSOCIATES
Loren Altshuler introduced herself and stated that Gabel Associates has been in the energy aggregation industry for more than 30 years. They were one of the first companies in New Jersey to become involved with Government Energy Aggregation (GEA). Gabel Associates is not affiliated with retail suppliers, but instead works with municipalities and acts as a resource for residents. Gabel Associates, if hired as the consultant for the Village, would not get paid unless a bid is awarded. They work for a number of towns in Essex County and Bergen County (Glen Rock, Teaneck). Gabel Associates has had 41 successful rounds of aggregations in various municipalities in the State of New Jersey.
Ms. Altshuler stated that the principals of their company (Steve Gabel, President, and Bob Chilton, Executive Vice President) have been involved in the regulatory area, having worked with the Board of Public Utilities (BPU) for approximately 35 years. Gabel Associates works consultatively with its clients and tries to take a conservative position, protecting clients’ positions against adverse developments. They have vast experience assisting and advising public entities, similar to Ridgewood, by leveraging their market experience and “broad basket” of areas in which they are involved, including retail procurements and wholesale markets. Gabel Associates has extensive experience dealing with renewables, such as solar, and energy products in general, and provide support regarding energy efficiency and environmental issues.
Ms. Altshuler reviewed the services which Gabel Associates would provide if hired as the energy aggregation consultant for the Village. They would offer outreach and education, energy market advice, and legislative and regulatory monitoring. They would provide collection of account data and opt-in forms for residents, collaborate with the BPU and Division of Rate Counsel, provide contract development and bid specification documents (with input by the Village), and perform administration of the bid process. Gabel Associates would offer advice and recommendations on an award, stay abreast of market conditions, and follow through after an award has been finalized.
Ms. Altshuler stated that the GEA program takes about six months to complete, starting with pre-bid activity, which includes passage of ordinances, a signed agreement with the utility, and obtaining resident usage from the utility to form an appropriate profile for the Village. They then prepare a Request for Proposal (RFP) and work with the BPU and Division of Rate Counsel to make sure they have had the opportunity to offer comments. Gabel Associates would conduct the bid process and work with energy suppliers to make sure the bid process adheres to the Local Public Contracts Law. Afterwards, they perform program education with Village residents and act as a liaison with the energy supplier to ensure that all proper documentation is distributed, such as opt-outs and educational material.
Gabel Associates performs ongoing customer service with residents, establishing a Help Desk which customers can use to ask questions and receive more details about the program. This Help Desk is available to customers throughout the duration of the program.
Ms. Altshuler indicated that Gabel Associates developed the first successful GEA program in 2012 and was the first company to have documents reviewed by the BPU and Division of Rate Counsel, along with development and execution of EDC (Electric Distribution Company) agreements with the utilities. Gabel Associates developed the first GEA program in the State of New Jersey, which included voluntary enhanced renewable energy products. She explained that there may be a voluntary program in which a resident may decide to “opt up” to a 100% renewable energy program. Gabel Associates was involved in the first municipality-wide, 100% renewable GEA program (Glen Rock).
Gabel Associates also has vast experience in developing large aggregation programs, such as those with the New Jersey Sustainable Energy Joint Meeting (NJSEM), a joint meeting of local public entities working to aggregate their individual energy requirements together for improved purchasing power. They have worked with Accelerating Clean Energy @ Scale (ACES), a nationwide energy management company that helps its members and customers buy, sell, and manage energy more efficiently and with less risk. Representatives from Gabel Associates have testified before the BPU. They have also assisted clients with applications for Sustainable Jersey certifications.
Deputy Mayor Perron asked Ms. Altshuler if Gabel Associates has an in-house attorney who can give advice to the Village in the event “hiccups” occur in the execution of a contract with a third-party supplier. Ms. Altshuler replied that Gabel Associates has an external legal advisor, who is on retainer, and who is knowledgeable about energy aggregation. In addition, several Gabel Associates employees are licensed (in-house) attorneys who are knowledgeable about energy aggregation.
Deputy Mayor Perron stated that it was her understanding that there are no more solar Renewable Energy Credits (RECs) available. She asked Ms. Altshuler about the current status of solar RECs. Ms. Altshuler replied that solar RECs are phasing out, but they are being replaced by the use of RECs in general. A municipality can procure renewable energy at a level mandated by the State of New Jersey (24.5%) and can also collaborate with Gabel Associates if the Village wanted to explore a combination of Class 1 or Class 2 RECs, depending upon the price point desired by the Village.
Deputy Mayor Perron then asked if the RECs would consist of nuclear power, besides solar, wind, and biomass resources. Ms. Altshuler replied that the RECs would not include nuclear power. She stated that Class 1 renewables consist of solar, voltaic wind, fuel cells, geothermal, wave or tidal, and methane gas from landfills or biomass facilities. Class 2 renewables consist of resource recovery and small hydropower facilities.
Deputy Mayor Perron asked Ms. Altshuler about the current status of the energy market. Ms. Altshuler replied that market pricing is still very high, and she anticipates that prices will increase further over the next month or two. Gabel Associates has advised their GEA clients that now is not the right time to go out to market. She recently pulled the market indices and noted that the “forwards” have hefty prices in December and January, but then the prices start to diminish as March and April approach. Utilities go to auction for basic generation services in February of each year and, by March, Gabel Associates is aware of what the tariffs look like, which helps them to compare what prices the suppliers are coming in with, versus what the price would be with utility tariffs.
Councilman Vagianos asked Ms. Altshuler what would happen if the Village signed a contract for energy supply at an attractive price, but then the prices increased during the contract term, which would not be in the best interest of Village residents. He mentioned that a competitor of Gabel Associates indicated that, in that situation, they would self-terminate the contract. Ms. Altshuler indicated that the energy supplier must notify residents that prices have increased, at which time residents have the right to opt out if they so choose. If the Village felt very strongly about terminating a contract, Gabel Associates would look at how they could incorporate that into an RFP. Councilman Vagianos indicated that another vendor interviewed by the Village had indicated that she would “self-terminate” a contract if energy rates increased, and this fact spoke favorably for that vendor. Ms. Altshuler said that when they develop an RFP, they present an analysis for the Village, taking into account market projections. If the bid does not appear to present an economically viable situation, Gabel Associates will advise the Village not to award the contract. She said that the “self-termination” of a contract by a vendor could be written into a contract, but that would make energy suppliers a little “gun shy” to bid during auction, thereby limiting the number of suppliers coming “to the table.”
Recalling Ms. Altshuler’s previous comments about Gabel Associates successfully completing 41 rounds of aggregation programs in various municipalities in the State of New Jersey, Mayor Knudsen asked how many contracts exceeded the state-mandated renewable energy resources. Ms. Altshuler said that she did not know the number of contracts off the top of her head which exceeded the mandated 24.5% renewable energy requirement, but estimated that it was about one-third of the contracts. Mayor Knudsen indicated that a higher percentage of renewable energy would increase the cost, and Ms. Altshuler agreed.
Mayor Knudsen asked how many unsuccessful rounds of aggregations Gabel Associates has encountered. Ms. Altshuler replied that there are a number of municipalities who have had “hiatuses” due to high market pricing when Gabel Associates went out to bid. Mayor Knudsen remarked that Glen Rock, Orange and Livingston all terminated their contracts. Ms. Altshuler said that they all rebid in the spring and went back to PSE&G in September because of their lower rates.
Mayor Knudsen indicated that PSE&G includes a note with electric bills from a third-party supplier that advises residents how much they would have saved if they had used PSE&G as their supplier (comparative pricing). Mayor Knudsen asked how often PSE&G notifies ratepayers that they are actually paying more through energy aggregation. Ms. Altshuler stated that market prices fluctuate, where prices are higher one month and then lower the next month, but she was not sure of the frequency of the notifications.
Mayor Knudsen asked, if Gabel Associates were hired as a consultant for Ridgewood, what kind of projections would be presented by Gabel Associates regarding competitive pricing in the foreseeable future. She also asked if that would be difficult to do at this time because of current market trends. Ms. Altshuler said that this would not be done until the spring of 2023, if at all. It depends upon the volatility of the market.
Mayor Knudsen asked Ms. Altshuler how many customers Gabel Associates represents in New Jersey. Ms. Altshuler replied that they represent approximately 20 municipalities. Regarding opting in and opting out, Mayor Knudsen asked whether Gabel Associates bases their numbers on an opt-out strategy (initially assuming all residents are opting in), and this was confirmed by Ms. Altshuler. She mentioned that they have tried the opt-in strategy initially, but this was not very successful in getting the “critical mass” desired by energy suppliers when bidding. Mayor Knudsen asked what the opt-out rate was during any given year, and Ms. Altshuler said that the opt-out rate is typically about 10% to 20% at the start of the program, and rises to about 40% at the end of the program, due to more residents eventually opting out, account closures, and people moving. This attrition rate is fairly standard across communities.
Councilwoman Reynolds assumed that when a person moved, the new owner would automatically be opted into the program which the prior owner had. Ms. Altshuler said that this was not usually the case, but that it could be done if the proper notifications were performed.
Mayor Knudsen asked if Gabel Associates were hired as a consultant for the Village, if they would notify all Ridgewood residents that they were being opted into the energy aggregation program. Ms. Altshuler said that they would request a list of all customers from PSE&G to find out aggregation data, with third-party supplier contracts excluded. PSE&G would inform them if any residents have a solar system, and those residents would be excluded as well, because those customers would not realize any savings from the aggregation program. Once the list is finalized, this will serve as a baseline for sending out notifications to residents. Mayor Knudsen remarked that it must be difficult and cumbersome to track customers when properties are bought and sold. Ms. Altshuler replied that she would discuss with the Village how often they would like Gabel Associates to obtain updated data from PSE&G, and such terms would need to be written into the RFP.
Deputy Mayor Perron asked if “straight” GEAs (not renewable) are having the same problem as Renewable Government Energy Aggregations (R-GEAs) in terms of obtaining bids because of market pricing. Ms. Altshuler replied that R-GEAs are facing the same problems, although not as drastically as with GEAs.
Deputy Mayor Perron asked if NJSEM is renewable aggregation or just gas and electricity. Ms. Altshuler replied that she believed it was just gas and electric, but that the RFP contains an opt-up option.
Mayor Knudsen thanked Ms. Altshuler for her presentation and indicated that she would be in touch with Gabel Associates once the Village Councilmembers have made a decision, since they have also interviewed other companies.
3. PUBLIC COMMENTS
Christine Amundsen, 469 Van Emburgh Avenue, asked if Gabel Associates completely handles the notification process to residents and takes care of answering all questions from residents. Ms. Altshuler replied that, once they receive the aggregation data from PSE&G and a successful bid is awarded, Gabel Associates will compose a letter advising residents of their right to opt-out of the program, along with a list of Frequently Asked Questions (FAQs). The energy supplier will take care of printing the letter and mailing it out to residents. Gabel Associates will arrange an educational program for residents, which can be done in person, at a town meeting, or by some other avenue.
Ms. Amundsen then asked if there would be a website which residents could access online to find out details of the energy program. Ms. Altshuler indicated that municipalities prefer to have a town-related website on which information is posted and shared, and often communications from Gabel Associates are posted on that website as well.
Ms. Amundsen asked if a certain manager would be assigned to the account for Ridgewood residents. Ms. Altshuler indicated that she would be managing the initiative. She would remain throughout the program, but she also has an assistant who spends a lot of time responding to requests from residents. They would work hand in hand to make sure that all documentation is prepared correctly, that all questions from residents are answered, and that the educational component is solid and communicative.
Ms. Amundsen asked what the average timeframe would be from the time a resident opts out of the program to the time the resident’s account is reverted back to PSE&G. Ms. Altshuler replied that it would take approximately 30 to 45 days, depending upon at what point during the billing cycle the resident chooses to opt out. There is a 13-day lead time to enroll or drop a customer. As soon as Gabel Associates finds out a customer wishes to opt out of the program, Gabel Associates notifies the energy supplier. If a customer opted out past the 15th of a certain month, for example, they may receive one last bill from the supplier before their account is reverted back to PSE&G.
Ms. Altshuler remarked that if a resident opts out after the initial 30-day window, the residents do not get involved at all in the program. If a resident opts out after the initial 30 days, then it will take some time for that resident to get out of the aggregation program. Ms. Amundsen asked if residents would get a separate bill from the chosen energy supplier after a contract is awarded. Ms. Altshuler replied that residents will only get one bill from PSE&G and the third-party supplier’s charge will be on that bill.
There were no further public comments.
Deputy Mayor Perron asked who pays for the supplier to print and mail the communications sent to all residents. Ms. Altshuler said that these costs are all within the supplier’s realm. When they bid out a price, they have already factored in the costs for printing and postage.
Mayor Knudsen asked who the supplier was for the Glen Rock/Livingston/Orange program. Ms. Altshuler replied that it was Energy Harbor. Mayor Knudsen asked what the difference was in the new supplier’s rate, which caused residents to “jump ship,” versus the rate the residents previously had with their prior utility, and what the difference was in the renewable energy content with each supplier. Ms. Altshuler indicated that the Sustainable Essex Alliance (SEA) offered 40% renewable energy, approximately 17% to 18% higher than the state-mandated levels, which at that time were 23.5%. Mayor Knudsen stated that she assumed there had been an increased rate from the beginning of the program, given the fact that Energy Harbor offered 40% renewable energy, and she was curious as to why those towns opted out of the program. Ms. Altshuler stated that when the deal was struck, and when one looked at the tariff, there was a small amount of savings. She stated that there was “seasonality” in the tariff; in other words, rates are higher in the summer than they would be in the winter. Depending upon a resident’s usage profile, the energy supplier charges one rate up to a certain amount of kilowatt hours and then charges a different rate over the initial tier of kilowatt hours. There have been changes in transmission tariffs, so that can also affect a resident’s electric bill from month to month. Mayor Knudsen asked if PSE&G would also have had similar fluctuations. Ms. Altshuler explained that when SEA went out to bid, they were getting a fixed price.
Councilwoman Reynolds asked whether or not the communities that decided to opt out could have asked for a smaller renewable energy component during the contract term. Ms. Altshuler said that a supplier could offer a baseline rate, along with a rate aligned with a higher renewable energy component (opt up). She said that she prefers to keep it simple for suppliers so that there are less “accounting buckets.” Councilwoman Reynolds again asked if the residents or municipality could have asked the new supplier to come back with some new numbers offering less of a renewable energy component, such as 29% instead of 40%. Ms. Altshuler replied that that would depend on a group’s philosophy, which ideally would be set forth at the start of a program. When again questioned by Councilwoman Reynolds, Ms. Altshuler stated that the increase in rates was a gradual attrition, so she really couldn’t answer the question. The municipalities of Livingston, Glen Rock and Orange went through the end of their contract but did not renew with that supplier; instead, they reverted back to PSE&G.
Councilman Vagianos asked if the Village could offer different choices to Ridgewood residents concerning the amount of renewable energy resources (25% opt in, 50% opt in, or 100% opt-in, for example). Ms. Altshuler said that that was possible, but she cautioned against offering too many options to residents. She said that she has never seen Gabel Associates offer more than one different alternative on opt up, but that doesn’t mean it cannot be done. Ms. Altshuler said that she thought it was a good idea. Mayor Knudsen felt that the Village “owes” the residents to try to get the best price possible by virtue of straight aggregation, since prices could either go up or down.
Mayor Knudsen remarked that a friend of hers purchased wind power from a solar farm individually. She asked Ms. Altshuler if she could explain why her friend may have done that. Ms. Altshuler stated that when one is working with energy suppliers, a contract is signed and then the consultant goes out into the marketplace to procure power to the PJM grid. The wind farm was probably a supplier, and they were either delivering that wind power themselves or were going out and procuring any power and buying RECs and using the RECs from their wind farm. The renewable attribute is typically tied into RECs, as opposed to the underlying power.
4. ADJOURNMENT
There being no further business to come before the Village Council, on a motion by Councilman Vagianos, seconded by Deputy Mayor Perron, and carried unanimously by voice vote, the Village Council’s Special Public Meeting was adjourned at 6:42 P.M.
Susan Knudsen
Mayor
Heather A. Mailander
Village Manager/Village Clerk
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