Westchester Power Recommends Contract Extension, Citing Market Uncertainty

By Bailey Hosfelt 

A representative from Sustainable Westchester presented the path forward for its Westchester Power program at the White Plains Common Council special meeting/work session on March 28.

As the current contract that purchased bulk electricity and locked in lower energy rates for consumers who opted in is coming to an end on June 30, Westchester Power is recommending a contract extension of at least five months for all of its participating municipalities, including White Plains.

Nick Tedrow, Operations Manager of the Westchester Power program, explained to Mayor Tom Roach and Common Council members that the energy market is currently high risk and high uncertainty, in part due to the current geopolitical landscape. This is one reason Westchester Power is seeking to extend its current contract. 

Additionally, Westchester Power wants to expand and diversify its supply options by tapping into the wholesale energy market as opposed to only working with energy service companies (ESCOs) during the auction process — the time when all interested companies compete against each other and bid their rates, vying for Westchester Power’s supply contracts.  

With a contract extension, Tedrow explained, Westchester Power is hoping they can bolster their preexisting auction process with wholesale suppliers too and ride out current economic uncertainty into a more stable energy market. 

“Right now, we’re considering up to a six-month extension,” Tedrow said. “Five is where we’re narrowing in on and seeing the best pricing coming in through indicative [energy planning].”

Tedrow said in the coming days Westchester Power would hold a chief electeds meeting to confirm target pricing and gain buy-in from all municipalities to sign onto the extension plan. 

Throughout April, Westchester Power will then move forward with a contract extension signing with its current supplier and send out mailings to all Westchester Power participants letting them know about an upcoming price change.

Because the extension will be contracting the current supplier past the contact deadline, rates will not remain the same. 

Currently, the rates in White Plains for the renewable energy supply through Westchester Power are 7.4 cents per kilowatt-hour. The standard supply, which is a mix of fossil fuels and some renewables, is 6.75 cents per kilowatt-hour.

“The prices are going to be a higher than what we have right now for our current contracts,” Tedrow said. “7.4 for renewable and 6.75 for standard is incredibly below market rate right now, so we’re facing that challenge right now and in the immediate term.”

Tedrow said Westchester Power is currently negotiating what rates will be during the extension period.

“We’re hoping with an extension, we can make the space to set up this new bidding process,  ride out some of the craziness in the world and get to a more stable energy market where we’re not priced in at some of this uncertainty and risk,” Tedrow added.

Roach noted that because Westchester Power is buying a locked-in rate, some months may do better than others on consumer’s bills. But, on the whole, residents opted in will have a more stable month-to-month fluctuation.

“This winter, there was a point where the Con Ed variable rate was more than double what the green rate was through Westchester Power,” Roach said. “When a lot of people were talking about how high their electric bills went, people in our White Plains default were not seeing that.”

Assuming all member municipalities agree to the extension period, residents opted into Westchester Power will receive communication detailing the contract extension and have an opt-out period through mid-June. On July 1, participants will get their new meter read date.

“Come summer, we’ll follow all of the same contract renewal processes with a new price not to exceed the new MOU, fund an auction, contract and hopefully be rolling with a really strong, long-term contract by Dec. 1,” Tedrow said. 

Councilwoman Jennifer Puja underscored the importance of having the City of White Plains seal on all Sustainable Westchester mailings that go out so residents don’t mistakenly think it’s junk mail and discard important updates. 

“Having that city seal validates our partnership and gives our residents a sense of confidence to read it and make their education decision,” Puja said. 

Roach also noted that White Plains will be promoting a number of incentive programs residents can participate in to save costs on their utility bill and support clean energy.