Fairfield may put electric aggregation program on temporary hold

And that may not be feasible under current market conditions, said Adam Sackenheim, assistant city manager.

Duke’s projected ‘price to compare’ for the next two years is estimated to reach 10.5 cents per kilowatt hour, or higher, wrote Rich Surace, with Energy Alliances, the city’s consultant.

“Due to energy market volatility at present and some challenging circumstances going on throughout the world, it is unlikely that we can secure an electric rate at or below 10.199 cents in the immediate future,” Sackenheim said.

“There is a chance we would let the aggregation program essentially go dormant, go into a holding pattern, which means all participants would return to the Duke default rate for a period of time.”

City staff, working with consultants Energy Alliances, would then spend the next several months tracking the energy market. Should it stabilize “we would look to lock into an electric agreement, again not to exceed 10.199 cents per kilowatt hour, and effectively relaunch the program,’’ Sackenheim said.

Voters approved the electric aggregation program at the November 2023 election with the first contract issued in May 2023. The current contract for 9.39 cents per kilowatt of electricity expires with this year’s May bill.

“We are 9-10 months into year two of our community electric aggregation program and the program has performed very well since inception,’’ Sackenheim said.

So far residents have saved, on average, $220 – or 12 percent compared to Duke’s default supply rate, Energy Alliance’s Rich Surace, wrote in a memo to Sackenheim.

“Market conditions are becoming increasingly volatile,” Surace wrote.

“Drivers of current volatility includes rising capacity costs, strong summer peak forecasts, and elevated supplier hedging costs due to forward market uncertainty.”

He said power costs have risen steadily by energy expectation usage and tighter supply conditions.

“Regional capacity prices have increased significantly over successive planning years, signaling growing concern that electricity demand will outpace available generation.”