Electricity aggregation proposals on local ballots

Several Southwestern Ohio communities will be voting Nov. 8 on whether to join other communities in negotiating lower bulk electricity rates. The cities of Bellefontaine and Greenville, the villages of Anna, Ansonia, Belle Center, Covington, DeGraff, Quincy, St. Paris, West Milton and Wayne Lakes as well as residents of the unincorporated areas of Newberry Township and unincorporated areas of Shelby County will vote on such issues. If approved, residents and small businesses of each community, currently being served by DP&L, will participate in the negotiations to establish a “bulk electricity rate.”

Deregulation of the electric supply industry has been in place for several years in Ohio. Recently, communities have found that joining together for bulk purchasing power has proven to deliver the lowest competitive rates for the longest terms, from the most qualified suppliers. With deregulation of electric supply in general, residents remain a customer with DP&L, the local utility. Residents continue to receive their bills from DP&L and continue to call DP&L for any service-related issues. The only change residents and small businesses will see is a lower rate on their DP&L bill, for the actual electricity used each month.

The details of electricity aggregation are simple. First, the residents of each community vote “YES” to approve a ballot question that allows their community to be included in the bulk negotiations. Second, the communities will collectively seek bids from qualified electricity suppliers willing and interested in competing to win thousands of customers at one time instead of trying to gain one customer at a time through expensive marketing tactics such as direct mail and door to door sales efforts. With a successful rate and term agreed to, all eligible residents and small businesses are automatically enrolled in the new lower rate. However, there is no obligation to participate. If a resident chooses to opt-out of the “bulk negotiated rate” they are free to do so without penalty. At a later date, that resident is also allowed to opt-in to the rate if they find it is the best rate available. There is zero risk to a resident. The rate is simply established due to the bulk enrollments and remains a viable fixed rate for the negotiated term.

Nearly 30 to 40 percent of DP&L customers have individually chosen a competitive supplier and are experiencing some type of savings or discount as compared to the DP&L default supply rates. Those residents generally have some type of contract and won’t be automatically included initially. Upon expiration of any existing contracts, those residents will be allowed to opt-in to the “bulk rates” and will be able to take advantage of the rate established for the remainder of the negotiated term. For that reason, even residents already under some type of competitive supply can vote YES to approve the ballot question as they will be able to decide whether the bulk rate is best for them at a later point as well.

Top tier suppliers such as AEP Energy, Dynegy (formerly Duke Energy), IGS (and the former DP&L Energy Resources company) and Constellation, the nation’s largest competitive electricity supplier, have submitted pre-qualification packets stating their intent to compete for the collective group of communities. AEP Energy was the recent winning bidder for a group of communities comprised of Sidney, Ft. Loramie, Botkins, Bradford, Russia and Lockington. Those communities secured a three-year fixed rate 27 percent below DP&L’s previous 12 months of default rates.

Affordable Gas + Electric (AGE) has been retained by each of these communities to provide assistance with passage of the ballot questions, administer the bid process and manage the aggregation programs for the communities. AGE currently represents the previously mentioned Sidney group of communities as well as Jeffersonville, Ft. Recovery and Coldwater. AGE also manages 59 residential aggregation programs in Illinois.

For more information regarding individual communities’ upcoming aggregation vote, residents can visit www.AffordableElectricRates.com.

Submitted story

Submitted by Affordable Gas + Electric (AGE).