Retail Choice/Aggregation FAQs
Q: I’ve heard about other utilities offering lower rates to switch to them. Can you explain this?
Deregulation was fully implemented in Ohio in 2001 and since then customers of for-profit electric companies, like AEP, Ohio Edison, and AES, may shop for electric generation rate contracts with Competitive Retail Electric Service (CRES) providers. Because of their business structure, members of electric cooperatives like URE are not eligible to participate in electric retail choice.
Q: How does electric retail choice work?
These competitive electric rate offers are only for the generation portion of an electric bill. Customers choosing an alternate provider will continue to pay distribution charges and other fees or tariffs associated with service from their current utility.
Although it is possible for eligible customers to save money by shopping around, there are some things to look out for like fixed charges, variable rates, differing contract lengths, and early termination penalties included in the fine print of these electric packages.
Eligible customers can switch suppliers without any disruption to their service. The local utility will still deliver the electricity, handle maintenance, and send the bill, but the supply section of the bill will reflect the new power company.
Q: What is electric aggregation?
Some energy consulting firms provide services to local governments, bundling customers into large groups to get wholesale deals with CRES providers. This bundling of customers with one CRES provider rate is called “aggregation.”
The main advantage of aggregation is that it can lower electricity costs because a larger group has more negotiating power. Besides lowering costs, sometimes communities may choose suppliers that offer renewable energy options.
If the local government aggregates electric consumers in the area, those consumers will still be able to opt-out of the program by filling out a form, but they would be included by default if they haven’t already selected another provider. With the proposed Union County aggregation program on the ballot, there will be no additional charges, no early termination fees and customers that are opted into the program can leave at any time.
Q: Will passing an electric aggregation vote in Union County affect members of URE?
Members of electric cooperatives like URE are not eligible for aggregation because Ohio cooperatives do not participate in electric retail choice. Even if an electric aggregation ballot issue passes in their county or township, aggregation would only apply to customers of for-profit energy companies.
Q: Why isn’t URE participating in electric retail choice and aggregation?
Electric cooperatives are not-for-profit, member-owned, and locally governed utilities that for many years have benefitted from low-cost wholesale power generation owned by the cooperatives in Ohio. State law grants the Ohio electric cooperatives exemption from participation in retail choice (deregulation) because legislators recognized our member-owned and member-governed business philosophy. They acknowledge our long-term approach to policy decisions based on the best interest of our members. Cooperative members around the state “aggregated” their power requirements long ago by creating Buckeye Power, our power generation cooperative.
Q: Is Buckeye Power selling electricity to eligible retail choice customers?
No, Buckeye Power is not a Competitive Electric Retail Supplier. Buckeye Power does sell surplus electricity wholesale, beyond what is needed for its member cooperatives, into the electric grid. Surplus energy sold into the grid is then distributed to neighboring electric utilities both in Ohio and regionally. Revenue from the sale of any excess energy is used to offset power costs for electric cooperative members.
Q: How does the cost of my wholesale power compare to the discount offers I’ve been hearing about?
Buckeye Power’s wholesale rates are generally much more stable over time and competitive with discounted offers. Power from URE comes without attached strings such as introductory offers, early termination fees, or additional monthly charges. URE’s rates are cost-based. Because URE and Buckeye Power are cooperatives, any margins (profit) made on the production and distribution of electricity is allocated back to members and eventually returned as bill credits.
Q: How should I vote for the issue in my election?
Even though the results of the aggregation issue won’t impact you or other URE members, your vote is still important and could affect others who are served by investor-owned utilities. We encourage you to cast your vote based on your personal opinions on electric aggregation. If you don’t have a strong opinion on aggregation, we encourage you to talk with your neighbors who the policy would affect to get their thoughts and feedback.
Q: Where else can I learn about electric or natural gas aggregation?