Aggregation can seem hard to understand, but once past the technical terms, it’s isn’t so complicated. Today, we’ll explore some basic terms and have a brief introduction to electrical aggregation.
Governmental Aggregation is also called community aggregation, community choice energy, and municipal aggregation. All aggregators must pass meticulous standards to be certified by the Public Utilities Commission of Ohio (PUCO) in order to do business in Ohio. This ensures that companies are acting in the best interest of the communities they serve and are compliant with all laws and regulations as dictated by the Ohio Revised Code.
One metaphor for an aggregated community could be an office building. There are different employees that may come and go, but the building itself is still one building. Since that one office building has so many people using printer paper, for example, the building is able to get them for a wholesale price for everyone. That way, each employee doesn’t have to pay the retail price for their own ream. Likewise, an aggregation may have customers come and go from the community, but still considered one unit. Taking a “strength in numbers” approach, an aggregation is able to secure better pricing for utilities than if each person tried to negotiate on their own.
By being one large customer instead of many small customers, an aggregated community is able to negotiate with more buying power when dealing with utility companies. Leveraging this buying power, aggregations can negotiate better prices for utilities. They also allow the community to have more control over their energy sources.
Ohio recognizes two types of aggregation: opt-in aggregation and opt-out aggregation. Of the two, opt-out aggregation is the most common. First, a community must approve a proposal to aggregate. The local voting ballot then has the option to aggregate added to it. Next, community members must vote in favor of it for it to pass. After the proposal passes, the community develops a plan to operate and manage an aggregation program. At least two public hearings are then held about the plan to aggregate. These give people the opportunity to discuss aggregation and ask any questions. The next step depends on if the aggregation is an opt-in aggregation or an opt-out aggregation.
In an opt-in aggregation, the plan must be approved and certified by the Public Utility Commission of Ohio (PUCO) before a community is able to aggregate. If PUCO approves of the community’s plan, then everyone that wants to participate will need to individually sign up for aggregation. If they do not sign up for the program, they will not receive the discounted rates negotiated for the community.
In an opt-out aggregation, every eligible member of the community is added to the roster for aggregation as soon as the program goes into effect. Each customer to be aggregated is notified that they will be automatically enrolled in the program unless they choose not to participate. This streamlines the process by letting people automatically receive the discounted rates for electricity without the hassle of paperwork.
No one is required to participate in either form of aggregation, even if they vote in favor of it. Those who are already in contract with a supplier or on a percentage of income payment plan (PIPP Plus) are removed from the eligibility list before aggregation begins. With opt-out aggregations, an opt-out form is sent 90-120 days after aggregation is agreed upon by the community, and then again every three years as a reminder. People are also free to leave the program at any time for any reason at all.
Trebel has been at the forefront of innovation and the creation of programs that are customer-focused. Our in-house customer service team is available to help you understand aggregation and find solutions for your community. Contact us today!