Salem Council Hears About Electric and Gas Aggregations | News, Sports, Jobs


SALEM — City Council heard updates from representatives of the city’s electric and gas aggregation programs during Tuesday’s meeting.

Terry Leach, Vice President and Chief Risk Officer of AMPO, provided an update on the state of the natural gas industry and the gas aggregation program.

Leach explained that prices continue to rise and the industry remains extremely volatile for many reasons, such as increasing global demand, the ongoing war in Ukraine and current demand exceeding existing supply. This is felt even more strongly than in most industries since natural gas is a base industry.

As of Tuesday morning, the best available rate was $1.10 per unit, seven cents higher than the previous month and more than double what it was in September 2021. Leach explained that in the short term, the price should continue to rise and remain volatile; however, in the long term, it should decrease as the gap between supply and demand is expected to narrow.

With that in mind, Leach recommended the board keep waiting, because while AMPO continues to monitor rates on an hourly basis, current gas rates often change minute to minute. He also explained that if the city decides to go ahead with signing a new contract, those with shorter durations will likely carry a higher cost and will continue to do so for the next few months on the market. current.

Leach also said that if the city wanted a new contract to start for December, it would likely have to be signed within five days due to the paperwork required to get residents back into the program, noting that before the dissolution of their former Salem contract had 2,500 resident participants in the program.

Leach also explained that any residents who obtained a private gas plan as previously recommended would still be able to apply to be reinstated into the aggregation program once a new contract was established; however, they should actively seek reinstatement and leave their current arrangements rather than being automatically enrolled.

Council also heard from a representative of Aspen Energy, the city’s power aggregation broker. The representative noted that electricity prices are currently at their highest level in 14 years and that the market is in a state of volatility similar to that of the natural gas market since they use the same pricing model. He said residents risked shock from the stickers when the city’s current contract ends.

The representative also noted that due to volatility, the company is unable to provide a guaranteed rate as it has done in the past since the rates offered change at a faster rate than municipalities can. are able to respond and hear each other. Accordingly, he recommended that council institute legislation allowing the director of utility security to enter into a power aggregation agreement on behalf of the city without further council approval, similar to legislation instituted under ongoing efforts to find a new gas aggregation contract. .

The council will then meet at 7:00 p.m. on September 20 in the council chambers.




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Edward N. Arrington