A communication transmitted from Yi-An Huang, City Manager, relative to the proposed structure for the Cambridge Community Electricity program (CCE) for the period 2024-2025

June 12, 2023 1 Council Meeting: City Manager’s Agenda Cambridge Community Electricity 2024-2025 Program Structure

Executive Summary 2 ▪ The City’s municipal aggregation program, Cambridge Community Electricity (CCE) has given customers consumer protection, a fixed price, and created a mechanism for the City to advance its climate goals ▪ ~80% of Cambridge electricity accounts are enrolled in CCE, though a disproportionate share of low- income households opt out due to targeting by predatory competitive suppliers ▪ Some Councillors and members of the public have expressed interest in shifting the default supply to a greener option as part of re-procurement this summer ▪ Basic energy prices and the cost of voluntarily increasing the portion of green energy (via Mass Class I Renewable Energy Credits (RECs)) have gone up significantly since negotiating our current contract ▪ The Climate Committee’s guidance is “to maximize renewables with strong concern re: low-income ratepayers” ▪ We propose creating a 50% renewable default supply, with the option to opt-down to the lower cost base supply (~25% renewable) or opt-up to higher cost “100% green” ̶ We expect the 50% renewable supply will still be less expensive than Eversource’s July-December 2023 rate ▪ Note, this proposal only covers the period 2024-2025. In 2026, we expect to shift our renewable energy strategy to higher impact RECs procured through new renewable energy projects via Virtual Power Purchase Agreements (vPPAs), away from Mass Class 1 RECs

3 Cambridge Community Electricity (CCE) is a municipal aggregation program aiming to secure lower cost, stable rates & advance climate goals

4 It has collectively saved users an estimated $67M since 2017 Cumulative CCE savings vs. market since 2017 $Millions 28 23 16 Large Business Residential Small business ▪ Savings are proportionate with electricity usage (e.g., large business accounts use 75,000 kWh per month vs. 358 kWh for median residences) ▪ Cambridge’s current standard price 10.2 ¢/kWh vs. Eversource’s basic service prices: ̶ Jan-June 2023 25.6 ¢/kWh ̶ Jul-Dec 2023 16.1 ¢/kWh ▪ CCE offers additional benefits including City consumer protection, a fixed predictable price and the option to receive 100% renewable electricity ~150 ~39,000 # Accounts Avg. kWh ~5,000 ~75,000 ~350 ~2,200

5 ~80% of Cambridge electricity accounts are enrolled in CCE; notably, low- income households are disproportionately under-enrolled 84% Non-Low Income Residential 3,228 7,779 Total 44,807 Low-Income Residential Small Business Large Business 584 56,398 35% 16% 36% 20% 64% 65% 25% 80% CCE Non-CCE Disproportionately low participation from low-income households due to predatory competitive suppliers Cambridge electricity accounts # accounts and % of total

6 Predatory competitive suppliers target low-income households and give them higher electricity bills ▪ Unlike utilities, which need to get their rates approved by the state, competitive suppliers can charge whatever they want ▪ Average competitive supply customers pay $200 more annually than they otherwise would ▪ “Even if they offer a lower price to start with, they jack up their price later down the line” ▪ The Attorney General’s Office has found that lower-income residents and communities of color are disproportionately harmed by this market Source: “Why a plan to drive down electric prices in Mass. led to higher bills. Miriam Wasser. WBUR. May 2023.

7 Basic energy prices have gone up significantly since we last went to bid We are going to bid early based on consultants’ recommendation, prices expected to continue to rise

8 We propose creating a 50% renewable default supply, with the option to opt-down to basic 25% or opt-up to 100% green Existing Default Contract Recent Indicative Market Prices % Renewable 22% total 25% total 50% total 100% total Delivery $61.20 $61.20 $61.20 $61.20 + Basic electricity (includes State’s required RECs) $35.70 $49.00 $49.00 $49.00 + Voluntary RECs (additional RECs purchased by CCE) --- --- $3.40 $10.40 = Total Cost $96.90 $110.20 $113.60 $120.60 $ increase from current contract --- $13.30 $16.70 $23.70 % increase from current contract --- 14% 17% 24% Based on average kWh usage for a residential customer; actual usage can vary significantly Illustrative average residential costs based on indicative pricing ($/month, rounded) NOTE: RECs refer to Massachusetts Class 1 Renewable Energy Credits

9 Thank you