Watertown to study how city can sell hydro power directly to residents, businesses

Jan. 18—WATERTOWN — Residents and businesses could save about 10% on their electric bills if the city proceeds with a proposal to sell hydroelectric power to them.

City Council members on Tuesday night directed City Manager Kenneth A. Mix to start investigating how the city can sell power from its hydroelectric plant on Marble Street directly to residents and businesses.

The city's hydro consultant, Amber Energy US Inc., recommended selling electricity to residential consumers through the New York State Energy Research and Development Authority's Community Choice Aggregation program.

Councilman Cliff G. Olney III asked that a resolution be put on Tuesday's agenda that directs Mr. Mix to "investigate and determine" how the city can go about selling electricity to residential and business consumers.

Tuesday's action is the first step in determining how to go about the proposal.

The discussion comes after the city's hydroelectric task force last month recommended selling power as a way to generate revenue and help save money for residential consumers.

Three years ago, Mayor Jeffrey M. Smith put together the hydroelectric task force to find ways to offset the loss of a lucrative contract to sell hydro power to National Grid before the agreement ends in 2030.

For years, city officials have warned about the city is facing a fiscal cliff after the National Grid agreement expires.

But they believe that selling hydro power to consumers and taking a series of initiatives could generate between $1 million and $4 million a year, with an annual average of $2.5 million.

The task force determined it's a way to generate revenue, help save money for residential consumers and ease the financial crunch of losing the National Grid agreement.

"If we get some revenue, I think it's a good thing," Mayor Smith said.

The task force also recommends generating revenues through the wholesale market.

The city now uses hydroelectricity to power all of its buildings and then sells its excess to National Grid. The city could begin selling electricity to residents and businesses anytime before the end of the National Grid contract, Mr. Butler said.

Residents would still pay the same amount for National Grid to distribute electricity to those customers. However, they could save about 10% in discounts by purchasing the power from the city.

There are two ways that the city could go when going through NYSERDA's Community Choice Aggregation program, Mr. Butler said.

The city could run the electric company on its own and hire employees. But the city would most likely retain an Energy Service Company (ESCO) to market the program, explain to residents how it works, conduct the day-to-day operations and bill to customers.

In 1991, the city began the franchise agreement to sell electricity to National Grid. When the agreement expires, the power company will pay the city 34.78 cents per kilowatt-hour, much more than it will be valued on the open market.

At the end of the agreement, the city will receive about $6 million a year. In 2022, the city received about $4 million from the power giant.