The Basics of Governmental Aggregation

What is aggregation?

Aggregation is an option under Ohio law for consumers to obtain competitive electricity or natural gas supply where Energy Choice is available. Aggregators purchase electricity and natural gas for members of a buying group. Purchasing large blocks of energy is meant to give participants bargaining power and may reduce marketing and administrative costs. These savings can be passed on to consumers in the group. The utility continues to deliver electricity or natural gas to the home, but the price of the energy supplied is negotiated by the aggregator.

Governmental aggregations

Local governments may arrange to purchase electricity or natural gas for their residents as “governmental aggregators.” They can aggregate on their own or jointly with other local governments. Ohio law gives local governments the option to choose either an opt-in or opt-out form of aggregation.

• Opt-in — Each resident needs to provide consent to participate.
• Opt-out — Residents are automatically enrolled unless they individually opt-out of the program. This method requires voter approval and is the most common form of aggregation.

Local government requirements

Local governments must be certified by the Public Utilities Commission of Ohio (PUCO) before beginning their aggregation programs. They must adopt an ordinance or resolution approving the specific aggregation method (opt-in or opt-out) and place opt-out issues on the ballot.

Opt-out aggregation must be approved by a majority vote. If the ballot issue is approved, the local government must develop a plan for the authorized program. Before adopting the plan, a minimum of two public hearings must be held. The local government must decide whether to provide energy supply services directly or through another supplier or broker. Then, a notice must be sent to each resident explaining the services to be provided, the rates, other fees or charges, early termination charges, and any other service terms and conditions. The notice must also explain the opt-out procedure.

For opt-in aggregation, local governments must first negotiate the rate and terms and conditions with a supplier or purchase energy themselves. Next, the aggregator must notify consumers within the aggregated area about the offer and enrollment method so they can decide if they want to join the program.

Consumer eligibility

Residential consumers must be served by an investor-owned utility to participate. Those not eligible are consumers part of a municipal system, electric or gas cooperatives or Percentage of Income Payment Program Plus (PIPP Plus). Consumers who have chosen an alternative supplier are not included and should contact their local government if interested.

The aggregation decision

When reviewing the opt-out notice, consumers need to decide if they want to stay with the utility’s standard offer for their natural gas or electricity supply or join governmental aggregation.

Consumers should always open ANY mail from aggregation groups and local governments. Consumers should respond promptly to avoid being automatically enrolled with the aggregated group generally within 14-21 days. All eligible customers should receive a notice with directions on how to opt out. Consumers wanting to participate simply do nothing.

Consumers can also rescind enrollment when the utility sends the required notice prior to switching the energy supply to the aggregator. Consumers have seven days from the notice’s postmark to contact the utility to rescind without penalty. However, aggregation offers often do not have a termination fee and may allow customers to leave the program at any time.

New and existing residents served by an alternative supplier wishing to join the aggregation program should contact the local government aggregator to see if they can join. Before joining, they should find out if there are any early termination fees for ending a contract with their existing supplier.

The Office of the Ohio Consumers’ Counsel’s (OCC) How to Make Wise Energy Choices fact sheet is a great tool to determine if the standard offer, a marketer offer, or aggregation is the right choice.

Contact the local government aggregator for specific local aggregation program questions.

Electric Do Not Aggregate list

Customers may opt-out of receiving governmental electric aggregation offers. Contact the PUCO at 1-800-686-7826 or complete the Electric Do Not Aggregate Form on their website. These customers’ names and service addresses are displayed publicly on the PUCO website.

For more information or assistance with education about aggregation, visit the OCC website at www.occ.ohio.gov or the PUCO website at www.puco.ohio.gov.