Upper Arlington City Council last week unanimously approved an ordinance authorizing City Manager Ted Staton to contract with American Electric Power Retail Energy for electricity aggregation services for the city.

Upper Arlington City Council last week unanimously approved an ordinance authorizing City Manager Ted Staton to contract with American Electric Power Retail Energy for electricity aggregation services for the city.

On Monday, May 14, council voted 7-0 to authorize a two-year contract with AEP Retail at a proposed fixed rate of .05545 per kilowatt-hour for both residential and small commercial customers -- a rate that according to a city staff report is lower than what UA customers now pay on an individual basis.

According to information presented at the meeting, the average residential savings are expected to be around $19.15 monthly and $83 monthly for commercial businesses.

"I'm very happy for our residents and businesses," said council Vice President Don Leach. "Through this program, we have an opportunity to provide our residents savings."

The program is slated to begin July 1. The city and AEP retail are planning to mail additional information and details to eligible customers in early June.

The agreement also includes a $45,000 annual administrative fee for the city, and there will be no early termination fee for residents who opt out of the program. Also included is the ability of the city to cancel the program if the tariff rate -- the standard rate American Electric Power charges -- falls below the aggregation rate offered by AEP Retail.

Staff and other officials have said the tariff rate, however, is expected to climb.

Councilman Erik Yassenoff, who previously voiced concerns because the city's experience with gas aggregation, said the program looked "great on paper."

"I'm confident with the way this one is structured," Yassenoff said. "It looks like a great deal for the community."

UA launched a gas aggregation program in 2005 and joined with a number of other communities, but the program was terminated in 2010 when the price of natural gas fell and eliminated any savings of the program.

The city previously received voter approval in 2000 to act as an electrical aggregator on behalf of residents, according to a city staff report, and it was last November the city received a proposal from First Energy. At the time, council directed staff to solicit additional offers.

Five proposals were submitted to the city on March 1, and staff along with special counsel narrowed the options down to two bidders: AEP Retail and First Energy Solutions.

On April 16, council directed staff to examine the offers further, and both companies were asked to amend their original proposals based on parameters set by council.