MOUNT VERNON — Residents using American Electric Power of Ohio will see a jump in electric bills in July. The county will, too, but not as much.
Knox County participates in the County Commissioners Association of Ohio’s (CCAO) electric aggregation program. Palmer Energy Co. purchases electric and gas for county facilities on behalf of the CCAO.
Residents outside the City of Mount Vernon and Fredericktown who are not in an aggregation program will pay a higher rate for their electric bill because they twice refused to pass an aggregation ballot initiative.
“And we still are baffled as to why. They didn’t want to save money,” County Commissioner Bill Pursel said.
Bob Snavely of Palmer Energy agreed.
“We tried aggregation countywide for the unincorporated areas a couple of times; unfortunately, it did not pass,” Snavely said. “If it had, we would be in a fixed-rate agreement right now, and with the increase in capacity that’s coming in June, the savings would just be that much more.”
The higher prices will go into effect in June and be reflected on the July bill.
Previously, Knox County received a lower rate because it aggregated all of its buildings into one pool.
Palmer Energy is now aggregating all counties with the same utility and asking suppliers to bid on the entire group.
Capacity costs drive up electric costs
Electric costs are increasing because of capacity costs, which comprise about 35% of the per-kilowatt-hour price.
“Capacity is basically the ability of our grid, which is PJM, to produce enough electricity to meet our demand so there aren’t blackouts or grayouts or anything like that,” Snavely told the county commissioners last week.
“That’s PJM’s mandate: to make sure we have enough electricity.”
PJM (Pennsylvania-New Jersey-Maryland) is a regional transmission organization covering 13 states, including Ohio.
In last year’s generation capacity auction, capacity costs skyrocketed from $29.50/MW a day, a historic low according to Snavely, to $270.35.
The reason for the increase is primarily two-fold: increased demand and reduced supply.
“AI is obviously a new thing and has really sort of picked up steam over the last year, year and a half,” Snavely said. “Associated with that are data centers; data centers are major uses of our electricity.”
To illustrate data centers’ demand, Snavely said one center uses the equivalent electricity of 450,000 households.
“If you put two of those together, you’ve virtually got the residential load of Columbus,” he said.
What’s happening with the electric supply?
Over the last few years, states have closed down coal-fired electric generation plants.
“Some have been switched to natural gas. I think we’ll probably see more of that in the future,” Snavely said.
Another reason for the significant increase in capacity is how PJM evaluates renewables, primarily solar and wind.
Snavely said solar and wind are difficult because they do not produce electricity when there is no sun or wind, and the batteries needed to store energy are expensive.
“What had happened over the previous few years is that for PJM, it was a little too close for comfort with regard to when there’s the most demand on the grid, do we have enough supply? As far as I understand it, we did,” he said.
“I don’t believe there are any blackouts or grayouts, but it was getting uncomfortably close for the folks at PJM, whose mandate is to make sure that there’s enough electric generation to to feed the grid.”
How does aggregation affect the county’s electric costs?
The county’s expiring contract is in the 5- to 6-cent range per kilowatt hour (kWh), compared to AEP’s average price of 10 cents.
Snavely said the savings with an aggregation program are typically between 10% and 15%. However, over the past three years, the savings have been 30% to 40%.
“Over the last two to three years, there’s been a big imbalance between the wholesale electric market and utility pricing that’s starting to level out right now,” he said.
“It’s icing on the cake, and makes the point as to why we do this, but it’s really not something to be expected going forward.”
County Administrator Jason Booth said quantifying savings is difficult because the county installed new windows and HVAC units and completed other projects to improve efficiencies and reduce usage.
“If you just look at the straight bill, it doesn’t tell you that because the cost is going up, right? So our usage could be down, but the cost is up,” he said.
When Palmer sent out its Request for Proposals to energy suppliers, the company broke the accounts into groups: small, medium, and large.
Group 1, meters that use under 700,000 kilowatt hours annually, comprises just over 3,800 meters using almost 193 million gigawatt hours.
Group 2 meters use between 700,000 and 4 million kilowatt hours annually.
Knox County has 36 accounts with CCAO: 33 are in Group 1 and three are in Group 2.
Dynegy won the bid for Group 1 with a fixed rate of 0.8046 cents per kWh through May 2027.
CPV Energy won the bid for Group 2 with a bid of 0.0576 plus capacity cost.
The three buildings in Group 2 are the water/wastewater department, the sheriff’s office/jail, and the service center.
What’s next for Ohio’s energy market?
Snavely said nuclear might be the best way to increase capacity because it is clean and efficient, but acknowledged fears about getting rid of the waste.
He noted smaller units show promise and will likely play a future role. However, large-scale projects such as Davis-Besse take 20 years to build.
“We think, as far as generation goes, what we’ll see happen is a lot of the continued switching of coal-generated power plants to natural gas. That sort of transition takes about one and a half to two years.”
bob snavely of palmer energy co.
“And we’re going to keep seeing renewables. Those are going to keep showing up. I think once PJM figures out a good way to evaluate that, I think that’ll help the capacity numbers,” Snavely said.
Miscellaneous actions
The commissioners took the following legislative actions:
•Held a public hearing and awarded a salt brine contract to TD Petroleum
•Approved a memorandum of understanding between the county engineer, ODOT, and the Ohio State Historic Preservation Office to replace the Cooke Road bridge in Middlebury Township
•Approved contract with Jagger Auctioneers for the Knox County Engineer’s sale of two unneeded vehicles
•Accepted grant from ODOT for Knox County Transit for $166,000
•Approved amending the agreement between Job & Family Services and Ohio District 5 Area on Aging to increase the 2024 Adult Protective Services contract by $3,203.96
•Accepted the 2025-26 APS service contract between JFS & AOA for $160,000
•Approved the Knox County Treasurer Depository and Investment Income Report for April 2025, in the amount of $204,282.84, including the General Fund Interest Income of $11,477.40. The Program Income Fund Interest Earned is $2.07 for April 2025.
Public participation
Rebecca Nourse of Howard and Tammy Brown of Pataskala spoke during public participation. Brown said she and her husband are looking to buy property in Knox County.
Nourse, who is a member of the Knox County Republican Central Committee, said Keesee’s personal situation has unfairly affected Commissioners Pursel and Barry Lester. She appreciates Pursel replacing Keesee on the Family and Children First Council.
Brown previously worked at Faith Life Church. She said that based on her experience at FLC, she did not want to move to Knox County, knowing Keesee is one of the commissioners leading the way.