Worthington City Council on Monday, April 8, authorized city officials to enter into an agreement with AEP Energy for an electricity-aggregation program for residents.
The energy-aggregation plan was proposed by council members David Robinson and Doug Smith in March 2018 and approved by voters in November. The measure allowed the city to explore the possibility of becoming a governmental aggregator, a community that buys energy in bulk on behalf of its residents.
Because the plan was for an opt-out aggregation program – residents automatically would be enrolled and would have to choose not to participate in the program – it required approval by residents in a citywide ballot issue, according to the Public Utilities Commission of Ohio website, puco.ohio.gov.
Under Ohio law, residents may negotiate prices with energy suppliers individually. But by turning thousands of residents into one large “energy buyer,” the city, in theory, would add leverage in negotiations to ensure that the price people pay for their energy supply is lower. Worthington has about 14,600 residents, according to a 2017 Census Bureau estimate.
As of April 3, AEP Energy’s price would be 5 cents per kilowatt hour, according to Rich Surace, COO of Energy Alliances.
Energy Alliances is the consultant group chosen by the city to implement the process and seek options on its behalf.
That price would amount to $40.43 in estimated annual savings per resident, according to the materials Energy Alliances provided in the meeting agenda.
Surace said the price is close to the market price among comparable products. The energy will be sourced from 100% renewable sources, according to the agenda materials.
The price listed was the estimate at the time the materials were prepared, Surace said.
Surace said he is working with the city’s law director, Tom Lindsey, and AEP Energy to go over language in the resolution and confirm the price.
Surace, who presented the recommendations to City Council on April 8, said Energy Alliances considered six proposals and recommended three options.
Energy Alliances selected two options from AEP Energy and Dynegy as being the most “responsive and responsible,” according to materials from Energy Alliances included in the meeting agenda. A third option from Dynegy also was included as an option.
Now that the option is approved by City Council, the next steps are for Energy Alliances to draft a master-service agreement, customer-service terms and conditions and opt-out material for the city manager and the law director to approve, according to the meeting agenda.
Energy Alliances will notify AEP Energy to submit a final price and executable agreement, which the city manager would sign, the agenda said. Energy Alliances then would file the opt-out material with the PUCO, and letters about the program tentatively would be scheduled to go out to residents in late April, the agenda said.
Robinson said he was pleased the city was able to attain the goals of his and Smith’s initiative with the options.
“The campaign was based on saving people money and clean energy,” he said.
He said AEP Energy is the right choice because of the services the company offered compared to the other two options from Dynegy.
Robinson said he liked that the company offered budget billing, in which monthly electric bills are spread into equal payments throughout the billing period. At the end of the cycle, customers are given a bill that is higher or lower than their budget amount after their usage is evaluated. He said Dynegy would not have that feature until September.
He said he also liked that AEP Energy supported net metering, a billing mechanism that credits owners of solar-energy systems for the energy they are able to produce.
“We promised in different ways to the public that we would make this a well-run, problem-free process, (and) that we would be fair and there would be no cost to opt out,” Robinson said.