Increasing the Aggregation Pool

By Mike Barhorst

Barhorst

It has been some time since I wrote about government sponsored aggregation, and I thought it might be a good idea to provide an update. Readers will likely recall that the Ohio General Assembly made it possible for local communities to join their citizens together to buy natural gas and/or electricity as a group. By doing this, individual residents are able to gain “buying power” by soliciting the lowest price for the group’s natural gas and electric needs. It is important to note that aggregation can only be accomplished with voter approval.

Sidney City Council endorsed the program, as did the elected officials in the villages of Botkins, Bradford, Fort Loramie, Lockington, and Russia. Those municipalities became part of the aggregate (buying group) that has informally become known as the “Sidney aggregate”.

Once aggregation was approved by the voters in November 2015, the consultant contracted by the City of Sidney, Affordable Gas + Electric (AGE), began filing the necessary paperwork with the Public Utilities Commission of Ohio. Once everything was in order, AGE solicited bids from various electric suppliers. A contract was awarded to AEP Energy at a fixed rate of 5.441 cents per kilowatt hour for 36 months  starting in April 2016.

The savings were significant for those who have been participating in the program. Interestingly, about 55% of the eligible consumers in the “Botkins, Bradford, Fort Loramie, Lockington, Sidney and Russia purchasing group” had already locked in rates prior to the measure being placed on the ballot. As a result, they were not eligible to participate because they were already under contract. As those contracts have expired, many of them have subsequently joined the aggregate.

A late convert to the concept of aggregation and excited by the savings individuals and small businesses could achieve through participation in the program, I invited Sidney businesses and industrial customers to consider aggregation. A group of commercial and industrial customers formed their own aggregate through AGE, resulting in substantial savings for them as well.

As I gained additional understanding and recognized that increasing the number of participants in the aggregate would provide the opportunity for even greater savings, I met with many of the mayors of Darke and Logan Counties and in some cases, made presentations before their councils. In November 2016, the voters in the cities of Bellefontaine and Greenville approved aggregation, as did voters in the villages of Anna, Ansonia, Belle Center, Covington, DeGraff, Quincy, Wayne Lakes and West Milton, as well as in Newberry Township (Miami County).

As I suspected, the increased numbers helped AGE negotiate an even lower electric rate. While we are currently locked in at 5.441 cents per kilowatt hour (kwh) through April 2019, we will enjoy their new rate of 5.29 cents per kwh in April 2019. At that end of the 2020 contract, the contract for the expanded group will be renegotiated.

I have also recently visited Christiansburg, Marysville and Urbana, where I encouraged those with whom I spoke to vote to place the issue on the ballot to allow their voters to decide if they want to participate in government aggregation. I also invited them to join the aggregate in the belief that we can drive prices  still lower.

Despite historically low prices, natural gas aggregation has also provided residents the opportunity to see significant savings in their monthly bills. The current negotiated rate of $0.3898 per hundred cubic feet (CCF) of natural gas fixed for 24 months is still well below the prices currently being offered by the various companies.

Utility companies continue to attempt to lure customers with offers to switch. I received a number of offers that included $100 gift cards and other incentives, including an introductory rate far below our current rate. In reading the fine print, the introductory rate was good for the first three months of the

contract, after which the rate increased dramatically for the remainder of the contract. I would caution consumers to read the “fine print” carefully before signing a multi-month or multi-year contract.

In closing, I should again note that none of the city, village or township program sponsors receive any monetary benefit from aggregation. The benefit comes from knowing that consumers save money on utility costs – costs that have increased dramatically in the past several years.

If your electric or natural gas supply contract is ending soon and you would like to investigate the city’s program, visiting the city’s website (www.sidneyoh.com/utilities/aggreagtion.asp). Additional information may also be obtained by contacting AGE (618.203.8328).