Voters in Champaign County will have another opportunity on Nov. 8 to amass group buying power for electricity and natural gas.
After failing a measure for aggregation on the November 2021 ballot, county residents lost a crucial opportunity to be covered by large-group bargaining power for energy. When prices spiked after the Russian invasion of Ukraine earlier this year, city of Urbana residents were protected from the price spikes by an aggregation issue for electricity approved a few years ago.
Champaign County residents outside of Urbana were left to bargain individually on Ohio’s electric choice website.
While no one involved can say why county residents failed an opportunity last year to keep their utility bills lower, part of the problem may have been the disparity over what type of energy each rural household uses and who provides it.
Customers of the utility AES Ohio or Ohio Edison would be covered by the proposed electricity aggregation issue on this November’s general election ballot. Customers of Columbia Gas or Vectren would also be covered under a separate natural gas aggregation issue.
But those served by Pioneer Rural Electric would not benefit directly from electric aggregation and those served by propane companies would not benefit directly by natural gas aggregation buying power.
Still, Palmer Energy Consultant Bob Snavely points to one major reason for residents not directly benefiting from aggregation to vote yes anyway. For one thing, they have nothing to lose.
But more importantly, money not being spent by their neighbors on higher energy bills will most likely be spent elsewhere in the local economy, he speculated.
“Generally, from what we have seen in the past, co-op members tend to vote against aggregation when it is on the ballot,” said Snavely, whose company has been chosen by the Champaign County Commissioners to implement aggregation if voters approve it. “I think that is because they might wrongly think it will affect their participation in the co-op. The reality is it has absolutely no effect on their co-op and, in an indirect way, voting for aggregation could help them.
“If I owned a business and lived in the area serviced by the co-op I would vote for aggregation with the idea that if my fellow resident of (the) county was spending less money on their electric bill they might take that extra money in their pocket and spend it at my business. I do not have any data to prove this, but my thought is most of the money saved via aggregation is spent in the local community in one way or another.”
For those who are simply skeptical of government-organized efforts, there is no requirement to participate in aggregation even if a residence is eligible.
“I think sometimes aggregation is misrepresented as a ‘government program,’” Snavely said. “I suppose technically that is true. However, what is really happening is you are taking the supply away from the utility and using your local community to create a discount that would otherwise not be available.
“Individuals can opt out any time with no fee,” Snavely added. “They can also join any time with no fee … no one is locked in to anything.”
If voters approve, the earliest Champaign County would see aggregation be put in place would be spring of 2023, likely April or May.
But it could be longer.
“We want to assist as much as possible, as early as possible, but the county has to go through the process of becoming an aggregator through the state and that process takes time. Usually 4-5 months before all is said and done,” Snavely said. “As a percentage (of savings) it would be about 10-15% on average over the years. This year some of our customers in AES communities are saving over 100%, but this year is a very extreme situation.”
Bulk buying is the name of the game when it comes to savings regarding aggregation.
“It is why we are attempting to do aggregation countywide rather than township by township,” Snavely said. “The larger the group, the better the discount. A comparison I use is, buying a single Pepsi at the gas station will cost you more (per unit) than buying a case of Pepsi at Walmart.”
Snavely said if an issue is voted down there is no viable opportunity for aggregation and if people would like to use a third party supplier they would have to go out and structure their own deal. There are 27 Ohio counties currently participating in the aggregation program.
All residents in the unincorporated areas of Champaign County will vote on the county-wide aggregation issues Nov. 8. A yes vote would allow for the county to use purchasing power to secure a discount for residents on these commodities.
All AES/Ohio Edison and Columbia/Vectren Gas customers would be automatically enrolled unless they are already part of a third-party supply agreement, such as through the Ohio Energy Choice program. There would be no change to their level of delivery service, which would remain the responsibility of their assigned utility provider.
If a customer is in a current Ohio Energy Choice agreement for supply of energy, they will not automatically be included, but can join after their current deal expires.
Historical savings via aggregation purchasing power average around $100 per year for residences, Snavely estimated.
The village of North Lewisburg has a separate but similar aggregation issue on its residents’ Nov. 8 ballots.
Information distributed for Pioneer members
Pioneer Electric Cooperative President and CEO Ronald P. Salyer issued the following statement regarding the electric aggregation issue on the November ballot:
Voters in the unincorporated areas of Champaign County may see an issue on November’s ballot which proposes allowing the county to aggregate consumers’ electric loads and shop for wholesale power generation on their behalf. Aggregation is designed for customers of investor-owned utilities, like AES Ohio, to allow them to negotiate better electric prices. I am writing today to inform you that Pioneer is taking no position on the issue, but we want to make sure our not-for-profit electric cooperative members understand that the proposal does not apply to their service. Even though it doesn’t affect our members, their vote could help others in the county.
Under retail choice (deregulation), customers of AES Ohio and other investor-owned utilities must choose a power supplier for the generation portion of their electric service. Ohio’s electric cooperatives do not participate in retail choice because as a member-owner of Pioneer, our members have an ownership interest and financial investment in Buckeye Power. That generation source is a not-for-profit power supply, provided at cost. Pioneer’s cost-based generation supply service is currently significantly lower than market-based power supply prices. Owning the power supply, which includes a diversified portfolio of generation resources, positions Pioneer and other electric cooperatives to deliver very reliable electric power at more stable, cost-based rates over the long term.
State legislators granted the Ohio electric cooperatives exemption from participation in deregulation because they recognized our member-owned and member-governed business philosophy, and our long-term approach to policy decisions, are based on what is in the best interest of our members. Pioneer members will see no change or new charges due to the proposed aggregation.