LIVINGSTON, NJ — Community energy aggregation consultant Robert Chilton of Gabel Associates, Inc., the energy advisor selected in March to lead Livingston’s energy aggregation program, announced this week that he will have the bid results and recommendations prepared for the council to discuss and potentially vote on at its next meeting on Tuesday at 7 p.m.
In anticipation of his announcement of the bid results, Chilton attended this week’s conference meeting to explain the process and what the mayor and council should expect to see next week.
With stage one of the process complete, Chilton said that four suppliers have registered, submitted paperwork and qualified for the next phase. Gabel Associates will be accepting bids on Tuesday at 1 p.m. and will write up a report along with its recommendations by mid-afternoon for the council to review prior to the evening meeting.
In addition to all information pertaining to the bid results, Gabel will also provide a comparison to the PSEG and JCP&L prices as well as the estimated savings from the bids. Chilton explained that price comparisons and estimated savings will be presented based on the average customer, but that prices do not vary too much between customers.
He also explained that the PSEG tariff changes every June, and that this year it will likely decrease by 3 percent. Due to the impending change, he said the PSEG comparisons presented will reflect the new pricing.
Additionally, Chilton said that a new bill that has yet to be signed could substantially increase the amount of solar energy required for every supplier.
“What that means for us is that it will increase the amount of solar energy that is required in the renewable portfolio standard that every supplier has to meet,” he said. “We have our own green component for our bid (40 percent), but the minimum amount required for every supplier is currently about 19 percent. If the bill is signed, it will go up to about 21 percent—all from solar, and solar is the most expensive. What that means is that suppliers may be facing something like a 4-percent cost increase from solar [energy].”
Chilton added that although Gabel Associates instructed suppliers not to include this potential change in their bids, he said he expects that some suppliers might do so anyway.
“The way the law is written, it is a little unclear whether or not those costs will immediately be passed through in the PSEG tariff and the JCP&L tariff,” said Chilton. “My guess is that even though we’re telling suppliers not to include that in the bid, we think they might. That will be another effect than can impact their bid list. But in the end, we will evaluate the bid prices against the PSEG price to compare as it will take effect in June, and that will be the comparison.”
In response to questions by council members and the township attorney, Chilton stated that when the comparisons are presented, the council should consider moving forward with any bid showing savings of about 5 percent or higher.
“The main reason for that is because contracts tend to run more than a year, and you’re going to be running into at least one other cycle of a PSEG rate change,” said Chilton. “So what we like to have is the amount of the savings to be greater than the typical change in rates with one PSEG rate cycle because the [PSEG] rates will change again in June 2019. We will forecast where we think they’re going, and we’re usually pretty accurate, but having said that you don’t know for certain—so a 5-percent savings will generally get you beyond the range of a one-cycle change so that you know even after a year, you’re still saving money.”
Should the council vote to move forward with a bid, a letter explaining the change and all necessary information will be sent to all residents within a month after the bid is awarded.
The next meeting will take place on Tuesday, May 22, at 7 p.m.
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