Concern Raised Over High Rates for Westchester Energy Program

Many residents who live in one of the 29 Westchester municipalities and have been enrolled in the Westchester Power Community Energy Program through Sustainable Westchester thought they were likely to get lower electricity rates.

But over the past year, those rates have been far higher than Con Edison’s rate for standard non-renewable power.

The program launched about seven years ago with the goal of delivering conventional and renewable energy at competitive rates and ultimately pricing out electricity produced by fossil fuels. Local communities buying electricity from Con Edison joined the program include Croton-on-Hudson, Ossining, Mount Kisco, New Castle, Pleasantville, Peekskill and White Plains, giving Westchester Power the ability to bid on market energy prices with ag­gre­gated buy­ing power.

During the previous contract, customers saved on their monthly bill by paying a fixed rate for renewable energy at about 7.48 cents per kilowatt hour (kWh), a much lower rate than Con Edison’s rate at the time, which averaged about 10.52 cents per kWh. But since last fall, Westchester Power’s rates doubled to about 15 cents per kWh, costing more than what Con Ed has been offering.

Dan Welsh, program director of Westchester Power, confirmed that customers currently buying renewable energy are paying 15.12 cents a kWh.

“This is currently significantly higher than Con Ed,” Welsh said. “But, apples to apples, if you look at other supply offerings in the market for the equivalent 100 percent renewable supply, I think you will find we are lower than most if not all available.”

Welsh said fluctuating rates depend on the current electricity market rate, who is bidding, demand and the availability of fossil fuels like oil and natural gas traditionally used to generate electricity.

“It’s a matter of timing when you go to market and bid against our counterparts, larger ESCOS (Energy Supply Companies) who can come up with a fixed rate so they can weather the fluctuating futures market over the next couple of years,” he said. “There’s no way to guarantee against the fluctuating futures market.”

Other factors contributing to a more volatile market have been the war in Ukraine and exporting natural gas from the U.S. to Europe, causing the price of natural gas to triple. Natural gas is used most to generate electricity in the U.S.

The spike in Westchester Power’s pricing comes after the 18-month contract that went into effect on Jan. 1, 2001, was paused shortly before its expiration because inflation and the Russia-Ukraine war saw rates spiral above the original and revised not-to-exceed rate. That contract had locked in rates of 7.4 cents a kWh.

A new agreement was signed last year, but the negotiated rate has exceeded the market rate virtually every month.

When Westchester municipalities signed up for the program, residents in those communities were automatically included but could opt out of the program at any time. Opting out of the program is still available to all customers.

Pleasantville Mayor Peter Scherer said there have been many conversations about the rates at meetings with other Westchester municipal officials.

“The corner piece of these energy prices that are in such extreme fluctuations over the past year upended (Westchester Power’s) bidding model,” he said. “One piece of that is increasing demand for renewable options and based on the notion that more demand in the marketplace creates more incentive to invest in renewable energy.”

Scherer said he remains supportive of the program and hasn’t heard of any Westchester municipality that is considering opting out.

But Pleasantville resident Bill Stoller said he can no longer pay Westchester Power’s higher rates. Stoller’s May bill showed Con Edison’s cost for non-renewable electricity averaged 7.85 cents per kWh while Westchester Power renewable rate was 15.13 cents per kWh.

“Sustainable Westchester sent a form letter showing the differences in rates,” Stoller recalled. “The letter didn’t say ‘Hey, we’re sorry we screwed up and couldn’t keep the guaranteed price.’ It wasn’t exactly an apology.”

Initially Stoller liked supporting green energy, but when prices started rising, he finally opted out of the program.

“I was okay paying a premium knowing that I was supporting green power but I’m not paying more than double for the privilege of being in an aggregation program that made a bad deal,” he said.

Welsh said Westchester Power didn’t intend to represent the program as a guaranteed savings program.

“We operate to deliver renewable energy in the most economical and effective way that we can,” Welsh explained. “Renewable energy is still commanding some level of premium as we work our way through this transition away from fossil fuels. It will be a few years before the grid upgrades and new wind and solar generation truly unlock the benefits and costs settle down.”

Other cost-saving energy programs that Westchester Power promotes include its GridRewards demand response program, EnergySmart Homes and Community Solar.