Customers will have the option of staying with their current suppliers, but the alternative program will guarantee a lower price initially.
The Hampshire Council of Governments has applied to the state for authority to become the default supplier of electricity to homes and businesses to 22 communities that have agreed to this process that was authorized by state law in 1997.
Kenneth E. Elstein, the electricity specialist for the Council of Governments, said all residential and business customers will have the option of staying with their current suppliers, National Grid or Western Massachusetts Electric Co., but the alternative program will guarantee a lower price initially.
All potential customers will receive information in the mail before having to make this decision, Elstein said.
The regional Council of Governments has been the supplier for more than 100 cities, towns and school systems the past four years and has saved them a total of $1.4 million compared to what they would have paid the for-profit utility companies, Elstein said.
As has been the case with the municipalities and school systems that have been buying electricity from the Council, the potential new residential and business customers would still receive their electric bills from WMECO or National Grid, which will continue to provide delivery service.
“When the lights go out, you still call WMECO or National Grid. You are paying them for delivery,” Elstein said.
The Hampshire Council of Governments has been able to offer mostly lower rates for electricity by buying it from large, national wholesale power companies and not having to pay dividends to stockholders, Elstein said.
The Council of Governments will be paid administrative expenses under the new arrangements.
Since regional and municipal involvement in supplying electric power was authorized as part of deregulation of the industry in 1997, the practice called municipal aggregation of electricity has been started by the Cape Light Compact with 21 towns, the city of Marlboro and a few municipalities in Massachusetts.
Elstein said there will be 85,000 potential customers for the Hampshire Council of Governments venture.
State approval is expected in late summer, Elstein said, and he expect power could start being sold to residential and business customers before the end of 2011.
The Hampshire County towns that have authorized the Council to sell electricity to individual customers are Belchertown, Chesterfield, Cummington, Easthampton, Goshen, Granby, Hadley, Hatfield, Huntington, Middlefield, Pelham, Plainfield, Southampton, Westhampton, and Williamsburg.
There are also seven participating towns in Franklin County: Buckland, Deerfield, Gill, Leverett, Montague, Northfield, and Rowe.
Elstein said most large businesses and about half the small businesses in these towns are not expected to take part in the Hampshire Council of Governments program because they have already taken advantage of de-regulation by purchasing their electric power directly from national suppliers.