As many of you know, the “ReCharge NY” program is replacing the old “Power for Jobs” program that has been in place for many years. Both of these programs are economic development plans that provide deeply discounted electricity rates to organizations across New York State in hopes of helping them retain and/or hire more workers. The Power for Jobs program was very successful, but one big problem was that participants were re-allocated these discounts on an annual basis. This understandably created tension, because participants were never sure if their allocations would be renewed.

The new ReCharge NY program attempts to solve this issue by providing up to 50% of applicants’ power at exceptionally cheap rates (via hydropower), with customers having a one time option of securing the balance of their power at market rate for up to seven years.

Securing the hydropower for up to a seven year period is a no-brainer, in my opinion, and the kind of clear market signal that members of associations like Multiple Intervenors, the Manufacturers Association of Central New York, and the Buffalo-Niagara Partnership have been looking for. This allows them to budget/plan on a multi-year basis with a fixed price for power on the hydro allocation they are provided by NYPA. However, what should organizations do about the “market rate” option that NYPA is providing?

This is where customers have options. While participants can accept the hydropower allocation, they will only be given a “one-time opportunity” to take a NYPA market rate or go to market on their own. Which leads to the million dollar question: Is accepting a long-term price by NYPA on “market rate” power really in a customer’s best interest? Or, put another way, is NYPA going to provide a better price point than organizations can get by going to market themselves?

I think there is good reason to explore the market. If you look at the price of energy over the last seven years, you’ll see that energy prices are considerably lower today than they were back then. If you had taken even a discounted market rate seven years ago, you might be paying a premium for your energy today.

Alternatively, if budget certainty is your concern, then you may want to consider signing a multi-year agreement – like GSA NY did in a recent auction – but only at the end of a competitive, transparent process where you know you are getting the best price in the market.

Either way, 7 years just seems like too long a time horizon in my opinion.

Bottom line, when you work with World Energy, you will find out what price point to expect through a competitive auction in your region where all suppliers will be invited to compete for your available “market rate” power. We’re hosting a webinar on March 22^nd at 2pm to further discuss the “market rate” option for ReCharge NY program applicants and how a competitive auction can yield the best available rates for your organization. If getting the best available price is your energy goal – please join us!