Ohio was among the first states to authorize Governmental Electricity Aggregation (GEA) as part the Energy Choice Act of 1999 (SB3). More than 250 communities in Ohio have switched to municipal aggregation for both gas and electricity.
Ohio is served by a patchwork of 31 electric distribution companies, electric co-ops and municipal electric utilities, as shown on this map.
Direct Energy has written an excellent 2-page history of energy deregulation and customer choice in Ohio. The remainder of this history section is condensed from that source.
In July 1999, Ohio restructured its energy market to allow consumers to choose their energy provider, effective Jan. 1, 2001. Customers could choose to buy energy from Certified Retail Electric Suppliers (CRES) instead of automatically receiving it from their local utility company. Four activities that had previously been performed by investor owned utilities (IOU) were separated.
- Electric Utilities, also known as Electric Distribution Companies (EDC), would control transmission and distribution (aka “poles and wires”)
- Marketers would sell retail service to residential and commercial customers
- Brokers or aggregators would contract with retailers on behalf of groups of buyers
- Governmental aggregators (County, municipal, or local community governments) would contract with suppliers for service on behalf of their residents and businesses
The first few years of deregulation were rocky. Customers were hesitant to switch to new suppliers or aggregators due a lack of price differences. Meanwhile, changes in the market landscape left many without choices. The northern (primarily urban) part of the state had more energy suppliers, while the southern (rural) part had fewer. Consequently, in areas where suppliers were sparse, customer choice was often effectively limited to community aggregation or the incumbent utility. Litigation over compliance with SB3 also delayed the transition to full market pricing.
In May 2008, Governor Ted Strickland signed Senate Bill 221 into law to revise PUCO’s regulatory structure. It required incumbent utilities to offer a Standard Service Offer (SSO) for customers who did not actively choose a retail supplier. PUCO was given broad authority to make sure certain utilities’ SSO proposals were “fair and equitable” to consumers.
SB 221 also required each incumbent utility to shed its power generation operations and become an electric distribution utility (EDU).
Aggregation in Ohio must be approved through a local ballot measure and, like Illinois, local governments facilitate the aggregation contract but do not assume day-to-day administration of the program.
Currently, Ohio’s deregulated market is providing its customers with lower prices, better reliability, and above all, choice. Local utilities distribute energy to all customers whether they have switched to an energy marketer, aggregator, or are the utility’s SSO customers. During the second quarter of 2014, an average of 59% of customers in all service areas had switched from IOUs to CRES. Ohio consumers can shop for a variety of offers, including fixed- and variable-rate plans, with different durations and contract terms. Competition is driving down rates because Ohio’s consumers also have the right to change their provider and choose a new one so that they are not trapped in plans that don’t work for them.
GOVERNMENTAL AGGREGATION MAP
The map below shows the communities in Ohio that were participating in governmental electric aggregation as of January 4, 2017. Dark and light blue denote city and village aggregation, orange shows township aggregation and tan indicates aggregation at the county level. PUCO maintains an interactive version of this map, which allows you to zoom in and out and get additional information about jurisdictions that offers aggregation.
The largest aggregator in the state, Northeast Ohio Public Energy Council (NOPEC), serves over 500,000 customers in 200+ communities and estimated in 2016 that its customers have saved more than $215 million since its inception in 2000.
Communities in Ohio have the option of funding energy efficiency programs or other community benefits through their aggregation program, such as NOPEC’s $16M Powering Our Communities fund.
CURRENT AND EMERGING ISSUES
In late October 2016, FirstEnergy Solutions notified NOPEC that it would be terminating its municipal aggregation contract as of Dec. 31, 2016. NOPEC subsequently signed a 3-year supply contract with NextEra Energy Services Ohio that will begin on Jan. 1, 2017. This web page contains additional information about the change.
Some communities offer various “green power” options through the purchase of unbundled renewable energy credits to offset the greenhouse gasses emitted by their sources of generation. RECs from wind farms are very inexpensive in the Midwest. For example, this 2015 press release from the City of Cleveland says that the cost to offset the GHGs for a typical residential customer was just $0.94/month. Cleveland offered 50% renewable electricity as its default and allowed customers to opt up to 100% renewable by paying an extra $0.47/month more (on average), or to opt down to 0% renewable and saving $0.47/month.
In 2015 NOPEC reported that it added 21 new member communities, representing growth of 10% over 2014. It also began a Property Assessed Clean Energy (PACE) loan program. NOPEC’s Annual Report stated: “NOPEC governments and commercial property owners now have a source of up-front capital to tap for energy improvement projects. Our PACE financing fills a gap – specifically targeted to meet NOPEC’s commercial customers’ needs. Financing is available for energy improvement projects of $100,000 to $500,000. This is fixed-rate financing, available for up to 15 years.”
- NOPEC has saved its customers more than a quarter billion dollars since 2000.
- Ohio’s alternative energy portfolio standard is 3.5% in 2017 and 12.5% by 2027. See this page for more details.
- In 2015, 59.1% of Ohio’s electricity was generated by burning coal, down from 86% in 2010. 23.2% came from natural gas and 14.3% from nuclear. Renewables accounted for 2.3% and petroleum for 1.1%.
- Ohio’s largest wind farm is Blue Creek, with 152 turbines rated at a total of 304 MW.
- The state’s largest solar PV plant is the Wyandot Solar Energy Generation Facility, which is rated at 12 MW.
- Perrysburg, Ohio is home to one of the largest solar PV manufacturing plants in the US, operated by First Solar, Inc.
- Ohio maintains a public Do Not Aggregate list for customers who do not want to be “opted in” to a GEA, but few people have registered themselves on it.
LEGISLATION (Partial List)
- SB 3 (1999) restructured the energy market and gave residential and small business customers the ability to choose their supplier. It enabled Certified Retail Electric Suppliers (CRES) to sell directly to customers or to aggregators like NOPEC.
- SB 221 (2008) required utilities to support large-scale municipal aggregation.
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