Delaware council hears contrasting views on savings from electricity aggregation

Scioto Energy, NOPEC pitch power proposals

Paul Comstock
ThisWeek

Adopting an electric-power aggregation plan might not save those in Delaware any money, but a variation of aggregation might, City Council members were told March 1.

Council heard two approaches that could produce the varied results.

Delaware City Hall

The presentations were by Greg Bechert, managing partner at Scioto Energy, and Chuck Keiper, executive director of the Northeast Ohio Public Energy Council. 

City Manager Tom Homan told council Scioto Energy of Columbus "is the firm we use, the city of Delaware, to assist us in purchasing our energy for the city.”

“Not for the residents, but the city itself,” he said. “They've been in this market a number of years. They work with a lot of communities (and can) provide council with a background how the city itself buys power and their perspective on this topic."

Keiper told council NOPEC, based in Solon, is a nonprofit council of governments that provides aggregation for 240 Ohio communities in 19 counties.

Bechert told council energy is a traded commodity and its price is unaffected by the volume consumed.

The price is affected, he said, by rates that vary between more costly “on-peak” and less expensive “off-peak” times.

The benefit of aggregation is in negotiating a fee with a broker or supplier on behalf of aggregation participants, he said.

Not all communities with aggregation are happy with the electricity prices they must pay, he said.

Bechert said some central Ohio communities pay 4.89 cents per kilowatt-hour, whereas AEP could offer a kwh for 4.88 cents.

"If saving money is your desire in entering into an aggregation, the likelihood of that happening is slim to none because the utility has moved away from the old model of basically cost to serve,” he said. “They have an option process now. They're operated in the same market we are."

Aggregation can help a municipality move to renewable energy "in step if that's something they want to achieve," Bechert said.

Keiper told council Bechert's remarks were correct in the context he had described.

NOPEC operates differently, Keiper said.

"We believe that we've saved businesses and residents hundreds of millions of dollars (in natural-gas and electricity costs) in the 20 years we've been in existence. We are a different model than you are used to seeing," Keiper said.

"NOPEC buys natural gas and electricity in bulk to help you save," and that bulk is massive, he said.

"I believe that I buy more natural gas and more electricity than any aggregation in the state of Ohio," he said. "I assure you that we get the best terms and conditions of anybody in the industry in the state. We study those, and we know what they are. We have one simple mission. We exist to serve member communities and their residents and small businesses – period." 

 Ohio has about 150 licensed retail energy suppliers, and competition among them is fairly aggressive, he said.

When individual residents or businesses choose a new energy supplier, Keiper said, they get a price break for up to six months, and then their cost increases from 200% to 400%.

As government servants, NOPEC tries to protect people against that, he said, adding that a number of NOPEC workers are former elected public officials.

Customers pay no fees to NOPEC, he said.

NOPEC instead charges fees to energy suppliers, for whom finding, signing and keeping customers is an expenditure, he said. NOPEC relieves the suppliers of those marketing costs, he said.

NOPEC also has plans for the development of renewable energy in central Ohio, Keiper said.

Mayor Carolyn Kay Riggle asked Homan to contact some of the area municipalities that are dissatisfied with their aggregation deals. 

In November, City Council discussed a possible 2021 ballot issue seeking approval of a citywide aggregation plan that could lead to adoption of renewable electric power.

On March 1, Homan said that possibility is looking less realistic.

If the city were to opt for such a ballot issue, he said, it would be obliged to inform the public on all the intricacies of the plan. That kind of time might not be available, he said, especially because the city faces other priorities related to the COVID-19 coronavirus pandemic. 

Also in November, representatives of Aspen Energy Corp., a Dublin consulting firm, described a plan to use electricity provided by solar panels and wind turbines in Ohio to create a 100% renewable-electricity-generation program for residents and small-business owners.

After hearing the March 1 presentations, council member Cory Hoffman said he is less enthusiastic about Aspen's proposal.

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