What is Electric Aggregation?
Frequently Asked Questions
1. What is Opt-Out Electric Aggregation?
When community members establish their electric utility accounts, they often forget about enrolling in an agreement to purchase their generation from a retail supplier. Customers who fail to enroll in a retail supplier contract automatically receive their generation through their utility’s default rate called the Standard Service Offer (SSO). Through the SSO, these community members receive pricing they did not agree to, and this pricing has historically been much higher than the rates offered through retail contracts. Opt-out electric aggregation is a powerful tool that has helped Ohio communities save billions of dollars on electric utility bills by selecting a retail supplier with a lower rate to serve as the new default supplier for the entire community. In this sense, opt-out electric aggregation replaces the old default SSO rate with a new and lower rate offered through the competitive market.
2. Can I still choose my own Retail Supplier?
Yes. It is important to understand that while opt-out electric aggregation does replace the default pricing for the community, it does not enroll community members in a retail contract. Everyone in the community is still able to shop around and choose any supplier they would like at any time. If community members would like to enter a retail contract with a different supplier, they are free to do so anytime without any fees, hassle, forms, paperwork, or phone calls. All they have to do is contact their preferred retail supplier and enroll in the retail contract they want. And community members who have pre-existing retail contracts remain with those retail contracts and are completely unaffected. Remember, electric aggregation only creates a better default rate for community members who are without a retail supplier and are paying the utility more through the SSO.
3. How does Opt-Out Electric Aggregation get started?
In order to develop a better default rate through opt-out electric aggegation, an opt-out electric aggregation ordinance must be approved by voters on the ballot. Communities can place the ordinance on the ballot for either the General Election in the fall, or the Primary Election in the spring. In Southeast Ohio, opt-out electric aggregation ordinances have been passed in Lancaster, Logan, Athens City, Somerset, Amesville, Trimble, Buchtel, Racine, Jacksonville, Albany, McConnesville, Marietta, Belpre, McArthur, Gallipolis, and all of unincorporated Fairfield, Hocking, and Athens Counties.
4. What does the "Opt-Out" refer to?
Just in case any customers would prefer to return to the utility for generation services and pay the SSO rate instead of the lower community aggregation rate, the program provides a cost-free option for anyone to opt-out and return back to the utility for generation supply. In these cases, community members who would like to receive their generation pricing through the utility SSO can opt-out of the program without any early termination fee, switching fee, or any other charges. All they have to do is send in the opt-out letter that is mailed to their home three weeks before the program begins, or call 1-877-726-0214 at anytime and provide their account number and service address. There really is no hassle. But it is important to note that opting out is only required in these rare moments when certain customers wish to return to the utility and receive SSO pricing. Opting out is not required for the majority of customers, and is not required in order to shop around and choose a retail supplier.
5. Can everyone participate in Opt-Out Electric Aggregation?
No. Under Ohio law, participation in opt-out electric aggregation is prohibited for some customers even if they are not in a retail agreement. These customers will not be able to benefit from electric aggregation and will have to remain with the utility generation pricing offered through the SSO. The following customers cannot participate in opt-out electric aggregation:
- PIPP Plus Customers
- Net Metering Customers
- Municipal Electric Utility Customers
- Rural Electric Cooperative Customers
- Customers with Multiple Meters/Accounts
- Customers using more than 700,000 kWh/yr
Even though these customers are ineligible, their neighbors and community members could achieve large savings, so it is important to educate all members of the community when the community is voting on electric aggregation.
6. What type of savings does Opt-Out Electric Aggregation achieve?
Enormous. Over the past five years, Ohio electric customers have saved nearly $15 billion due to the competition of the retail market and programs like opt-out electric aggregation. In fact, the competition and savings from these programs is so strong that the electric utility companies have responded by lowering their SSO rates and becoming much more competitive. These savings amount to around $150 – $200 for individual households each year. Added up, those savings achieve tens and hundreds of thousands of dollars in annual savings for entire villages and cities, and millions when entire counties establish an opt-out electric aggregation program.