MOUNT VERNON — On Nov. 2, voters in the unincorporated areas of Knox County will decide whether to join 27 Ohio counties that have natural gas and electric aggregation programs. Six other counties also have aggregation issues on the ballot.
Consumers are familiar with the discounts available by buying in bulk. Aggregation programs work on the same principle. Instead of acting independently, households in the unincorporated areas can join together to form a buying group. The larger group then has leverage to negotiate bulk rates with utility suppliers.
“We're trying to create a group with as many people as we can to lock in a good price,” explained Bob Snavely of Palmer Energy Services.
Palmer Energy Services is the consultant to the County Commissioners Association of Ohio (CCAO) and also to the Knox County Board of Commissioners.
Aggregation programs are not new to Knox County. Fredericktown and Mount Vernon have aggregation programs, and the county buildings are in an aggregation program.
“We save pretty good money by bundling it into an aggregate,” said Jason Booth, county administrator. “Plus, it eliminates making calls. People like that they don't have to go out and check each year with suppliers. It's done for you in an aggregation program.”
The typical estimated savings with gas and electric aggregation is $100 a year per household. Snavely acknowledged that while that might not sound like much, if someone handed you a $100 bill, would you turn it down? Additionally, the savings could be looked on as an economic driver as residents spend the $100 in the local community.
He pointed out that savings also depend on where the market goes. If the market price increases, residents are locked into a lower rate and thus will save more.
“You're really protecting against the worst-case scenario,” he said.
Conversely, if the market price goes lower than the aggregation price, residents can opt out — without paying a fee — and return to a private supplier.
Residents can also opt in at any time. Snavely cautioned, however, that residents might have to pay a fee if they have a contract with a private supplier and leave before that contract has expired.
The program is only open to American Electric Power and Columbia Gas customers in unincorporated areas of the county. Customers of The Energy Cooperative, Cumberland Gas, and Consolidated Electric Cooperative are not eligible because they already belong to a buyers group.
However, all voters in the unincorporated areas will vote on the aggregation programs.
“It would not be open to Cumberland Gas and The Energy Cooperative customers, but their yes vote will help other people get an opportunity to save money,” explained Commissioner Teresa Bemiller. “It will help their neighbors take advantage of the buying power of those groups. The more people you have, the better price you get.”
Commissioner Bill Pursel said that The Energy Co-op sent a letter to its customers explaining the aggregation programs.
Referring to the co-op board members, he said, “They see it as a positive.”
The formal aggregation process under the Ohio Revised Code starts with voters giving approval for the commissioners to pursue aggregation.
“After the issue passes on the ballot, we'll hold two hearings where we answer questions from the public and go over details of the program,” Snavely explained.
At the same time, the commissioners, working with Snavely and Palmer Energy Services, will develop a governance plan for the programs. The plan includes getting PUCO (Public Utilities Commission of Ohio) certification, a process that Snavely says takes about 30 days.
After receiving PUCO certification and adopting the governance plan, Palmer Energy will send out a Request for Proposal inviting utility companies to submit a bid.
“We analyze the different options that come in and make a recommendation, but it's the commissioners who make the decision,” Snavely said. “If for some reason we go through the RFP process and for some reason they are not meeting the market pricing, we'll recommend the commissioners do nothing.”
Once the commissioners choose a supplier, an opt out letter will be sent to eligible residents. The letter will show the supplier's name, price, and terms. If a resident opts out of the aggregation program, he or she must sign and return the opt out notice.
“You have 21 days from the time you get the letter to send it in,” Snavely said, adding that it is important that residents look at their mail and not merely throw it away thinking it is junk mail.
For those opting out, the utility company will send an additional notice verifying the opt out choice. Residents have seven days to return that notice.
Snavely said the entire process — from the time the issues are on the ballot to the time aggregation takes effect — takes four to five months.
Contracts with suppliers are typically 12, 24, or 36 months.
“For the last several years, it's been 36 months,” Snavely said. “The energy markets have been pretty wild lately. We'll analyze the bids and take that into account.
“More than likely it will be a fixed rate,” he continued. “That's pretty much what we've done. But with the market changes and the energy prices, we can start looking at different options.”
Once the program takes effect, customers will see no changes from a billing perspective. Residents will still get a bill from Columbia Gas and AEP, but the aggregation supplier and the contracted rate will be listed. Columbia and AEP will still come out and read meters and handle emergencies.
The gas and electric aggregation programs appear as two separate votes on the Nov. 2 ballot. The other county issue on the ballot is a five-year, 0.79-mill renewal of the senior citizens levy.
Early voting got underway on Oct. 5 and will run through Nov. 1 at the Knox County Board of Elections, 104 E. Sugar St. Click here for a list of early voting dates and times or to learn more about absentee voting.
On Nov. 2, polls will open at 6:30 a.m. and close at 7:30 p.m. To find your precinct and polling location, click here.