MOUNT VERNON — Knox County voters rejected electric and natural gas aggregation in November 2021, but with electric rates climbing, it might be time to revisit the benefits of aggregation.
Energy consultant Bob Snavely of Palmer Energy told the county commissioners the current electric price to compare is 5.5 cents to 6 cents per kWh (kilowatt hour). However, prices are climbing.
As an example, he cited Dayton Power & Light, whose rates jumped from 4.8 cents/kWh to 10.9 cents.
According to Snavely, American Electric Power has bought 45% of its 2023 electric at 12 cents per kWh. First Energy is buying 2023 electric at 13.5 cents/kWh. The new pricing becomes effective in June 2023.
“The price to compare has been going up over the past few months, but the big jump is going to hit in June,” he told the commissioners. “Aggregation is something I think we should look at again.”
Aggregation programs operate on the bulk buying principle. The larger the bloc of people participating, the greater the buying power to negotiate lower rates. Snavely said that some aggregation programs recently locked in rates between 7 cents and 8 cents per kWh.
If the commissioners put an aggregation issue on the May 2023 ballot and it passes, it will take about three months for the Public Utilities Commission of Ohio to certify it.
New pricing goes into effect in June, which means county residents would pay market rates for several months until the discounted aggregation rate kicks in.
“In August or September, the price will come down, and at that point people will understand it’s the aggregation that brings it down,” Snavely said.
Snavely said the rise in electric prices stems from several factors: demand, selling domestic liquid natural gas abroad, lack of pipeline infrastructure to get LNG where it is needs to go, and lengthy time frames for PJM to approve solar projects.
Mount Vernon has had electric aggregation since 2008. Fredericktown also has electric aggregation; Centerburg is exploring the option.
In May 2021, Mount Vernon locked in an electric rate of 4.69 cents/kWh. The rate is locked in through 2025.
A county aggregation program would apply to the unincorporated areas of the county. However, there is a path to expand aggregation to include municipalities.
Snavely said that in Licking County, six villages and several townships that have aggregation programs have ceded authority to the county for aggregation.
“You can get an even better deal with such large numbers,” he said.
“You’re not just saving money with aggregation, but it’s an insurance policy for the future,” he added. “If the market is volatile, you’re protected from extreme surges in price.”
The commissioners must decide soon whether to put electric aggregation on the ballot in order to meet the Feb. 1, 2023, filing deadline for May ballot issues.
