Consumer 10: Electric Aggregation Could Save You Money In Your Utility Bills


UPDATED: Friday February 14, 2014 6:28 PM

Hundreds of communities all over Ohio now offer residents the chance to buy electricity or natural gas at exclusive rates.

The idea is that your community “teams up” to buy energy as a group. It's called "Government Aggregation” and it's supposed to save you money.  

The City of Lancaster insists thousands of AEP customers will save money by switching to First Energy through the city's first aggregation program.

"Well the nice thing about electric aggregation is that it's an opportunity for a city, in this case, to go after a large body of our city, all the AEP customers, maybe 15,000 units. And we can get a group rate, instead of individuals going after an individual rate, so it's group buying power,” said Mayor David Smith, Lancaster.

Since Ohio lawmakers approved the program in 2001, hundreds of cities, villages, townships and counties have negotiated electric rates for their citizens.  

Far fewer communities have negotiated with natural gas companies - partly because gas is at near-record lows.

The Office of the Ohio Consumers' Counsel, the state's utility watchdog, is generally supportive of aggregation as a low-cost option.

Marty Berkowitz of the OCC says one study showed consumers saving 200 million dollars on their bills over the past decade.

"We think the experience has generally been positive for Ohioans.”

Lancaster voters first approved aggregation in 2001. It's taken until now for enough competition to affect rates.  

In this case, AEP customers are automatically switched to First Energy. They'll have to OPT-OUT if they don't want the three-year rate.

"Well, we think we got the lowest rate out there at 5.99 cents per kilowatt hour.  I think most consumers right now are at a 7-point-something and higher,” added Smith.

Chris Marion knows the faster his electric meter spins, the more it will cost him. He's curious about what aggregation will mean for him.

Manion got a letter two days ago and is talking a possible change over with his wife.

Some companies will charge early termination fees if you sign up and leave. First Energy is not doing that in this case.

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