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Mingo looking at electric aggregation program

April 28, 2013
Weirton Daily Times

MINGO JUNCTION - Village voters are being asked in the May 7 primary election to decide whether the village should form an electric aggregation program that could save residents about $170 annually on their electric bills.

John Ney, an energy consultant with World Energy, said the electric aggregation program brings citizens and small businesses together to buy electricity as a group and negotiate the terms, conditions and price of the electric supply on the group's behalf.

This type of group buying power has shown to be an effective way to obtain a lower electricity rate for all the group members, Ney said.

"We are excited about the opportunity to extend residents and small businesses a savings on their electric bills," said Mayor Ronald DiCarlo. "In today's environment, it's critical that we take advantage of programs that help our community."

Ohio law allows for communities-such as townships, cities and counties to form aggregated buying groups to purchase electric generation on behalf of their citizens. By voting in favor of electric aggregation, community members will allow locally elected officials to purchase electric generation at a discounted rate for the community, Ney said.

Most governmental aggregation programs are structured so that all eligible residents and small business customers in the community are automatically enrolled, Ney said. Residents do not need to do anything to join the program. However, anyone who does not want to participate in the program can easily opt out by returning a form mailed to all eligible members.

Ney, who will negotiate the electric rates, said there are more than 200 electric aggregation programs in Ohio. Stratton and Toronto have such programs. Toronto formed an electric aggregation program just with FirstEnergy to negotiate a discounted rate.

Ney said he will negotiate with any electric supplier in Ohio.

He said residents are currently paying 7.4 cents per kilowatt hour through AEP. He said current negotiated rates around Ohio are at about 5.99 cents per kilowatt hour. The average house uses about 10,000 to 12,000 kilowatts per year. The 5.99 cents per kilowatt hour would save the average household about $170 a year.

He said contracts with electric suppliers could be established for one, two or three years. If a three-year contract is negotiated, the average household in Mingo Junction could save more than $500 over the length of the contract, based on the 5.99 cents per kilowatt hour, he said.

Ney added AEP rates have been increasing 10 percent to 15 percent a year.

AEP will continue to be responsible for the delivery of power to homes and businesses and will continue to read meters, maintain poles and wires and restore power after an outage, Ney said. The negotiated electric price will be on the AEP bill, meaning customers will continue to receive only one electric bill.

Ney said electric rates two to three years ago were trending down, but he expects electric costs to increase in the next several years.

"This is a great time for Mingo residents to approve energy rates while they are still low," Ney said.

The electric rate will be locked in for the length of the contract with the electric supplier, he noted.

Two public hearings will be held if the Mingo Junction electric aggregation program is approved by voters. Village Council will have the final say on any contract with an electric supplier.

Ney said residents could opt out of the electric aggregation program and continue paying AEP or other electric provider. Residents who opt out aren't allowed to enter the program until a contract for electric service expires and a new contract is negotiated.

If the electric aggregation program is approved, residents could expect to see the lower rates in about three months, Ney said.

He added voters normally approve the formation of the electric aggregation program because of the cost savings to residents.

Ney said if rates decrease, the program could terminate the contract with the electric supplier at a cost of $25 to $50 per house, but Ney said residents will recoup the money in a brief amount of time with the savings on a contact for a lower rate.

 
 

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