CENTERBURG — Centerburg voters will decide in November if the village can pool residents’ electric and natural gas purchases to seek lower rates.
Aggregation works as group purchasing power for the village, Bob Snavely of Palmer Energy said at the September council work session.
Residents and some small businesses would combine to negotiate a discount on the generation portion of their electric bills. That portion is the per-kilowatt price, which he said became expensive this summer.
“The more meters you can get together, the more favorable pricing you can get,” Snavely said.
Natural gas purchasing would work the same way.
In the aggregation process, energy suppliers bid to provide the electric or gas.
“When we go through the RFP (request for proposals) process, we are not tied to any supplier,” Snavely said. “As long as they can financially provide the service, and they put forward a good bid, then we’ll take that bid. Generally the best pricing wins.”
Contracts typically run 12, 24 or 36 months.
Upscaling the purchasing power
The Board of Commissioners put county buildings into an aggregation program in 2012. If Centerburg voters approve electric and gas aggregation, the village plans to let the county be the aggregator.
Mount Vernon and Fredericktown already voted to join the county’s aggregation effort. Combining with other jurisdictions scales up the purchasing power, Snavely said.
“We’re going to try to add other villages and possibly townships along the way,” he said. “So the bigger the group gets, the more purchasing power that group will have, and the better pricing you get your residents.”
Snavely said a mid-range goal is to combine five or six county aggregations to scale that purchasing power even more to get better pricing. A longer-term goal is to aggregate on a statewide level.
“Not only does it create more purchasing power, but it also brings in suppliers. The bigger load that you bring to the table, the more suppliers will bid on it,” he said. “You bring in national suppliers to bid on electric loads that they otherwise wouldn’t have taken the time to do.
“If this passes and we go out and get RFP results and we can’t project any savings on board, then we’ll recommend waiting until the market changes,” Snavely said. “There’s no point in putting an aggregation in place where you’re going to lose money.”
Aggregation programs carry consumer protections
Approving the aggregation program does not force the village to sign a contract. Contracts do not renew automatically, and the village can withdraw from the program at the end of a contract.
State rules bar teaser rates and set minimum contract lengths.
Councilman Don Wallace was concerned about foreign ownership of the companies and the vetting process to ensure they are American.
Suppliers must be approved by the Public Utilities Commission of Ohio. Snavely said his firm also reviews each bidder’s finances, parent company and business history. Bid results, including supplier names and prices, are public.
“That’s extremely important because when you’re talking about large aggregations, you’re talking about big dollar figures. These companies need to be financially stable enough to handle a load of that size, so that’s taken into account when we do the vetting process,” Snavely said.
If voters pass the aggregation measure, the village must hold two public hearings. Council would then sign an agreement ceding authority to the county as the aggregator.
The county’s current contract expires in December. Snavely said the timing would determine whether the village could join that contract or form its own group and join the county later. He said the goal is to have a program running by next summer.
