Town seeks 2-year aggregate electricity deal

Town Board members are seeking to sign another deal for electricity under a community choice aggregate program after a previous deal was prematurely ended because of financial credibility issues with the utility.

The board’s decision to have a two-year agreement instead of three years was based on market fluctuations and not concern over the fiscal well-being of electricity providers, Supervisor Robert McKeon said during a meeting Wednesday.

“The rationale is that the pricing is not as low as it was when we had the previous contract,” he said. “I don’t think we’d like to lock in for a long period of time. Should pricing go lower to more historical levels it almost makes the argument for going with a variable rate.”

McKeon said that Columbia Utilities’ problems during a previous threeyear contract, which was cut short by a year, were basically due to sabotage by the electricity provider.

“By not providing the necessary collateral to NYISO (New York Independent System Operator), they found a way to get out of the contract because NYISO won’t let them operate without the collateral,” McKeon said.

“Our administrator (had) looked at the financials of the company and felt very comfortable,” he said. “We think, to this day, that it didn’t have anything to do with their financials. We think that they wanted out of the contract.”

Columbia Utilities last year was forced by New York Independent System Operator to cease operations, with Red Hook and nine other municipalities in the Hudson Valley Community Power Group forced to return 23,000 customers to Central Hudson as the electricity provider.

McKeon does not expect the same problem to occur under any of the three bidders currently being reviewed by program admin

istrator Joule Assets.

Joule Assets Chief Executive Officer Jessica Stromback said last week a contract with the next provider would seek to have more documentation about the finances in future agreements.

“Rather than having (bidders) attest to something that they’ve done in the market, we’re actually requiring them to send in the documentation proving that,” she said.

Columbia Utilities, prior to the contract with Hudson Valley Community Power Group, had been fined $200,000 by the state in 2014 for deceptive practices in persuading about 2,700 customers to switch from a major utility and then charging customers a higher fee than promised.

In March 2022, Columbia Utilities was fined an additional $500,000 for violating the earlier court settlement. State Attorney General Letitia James at the time wrote that 912 consumers had signed 1,334 contracts in a “prohibited door-to-door marketing” scheme in New York City, Albany, Syracuse, Rochester, Ithaca, Utica, and Watertown.”