ISSUE 7 – Gas Aggregation

Ballot language:

PROPOSED NATURAL GAS AGGREGATION CITY OF ATHENS

Gas Aggregation

A majority affirmative vote is necessary for passage.

Shall the City of Athens have the authority to aggregate the retail natural gas loads located in the City of Athens, and for that purpose enter into service agreements to facilitate for those loads the sale and purchase of natural gas, such aggregation to occur automatically except where any person elects to opt out.

Explanation:

Aggregation is the process in which energy is sold to consumers who have joined together as a group to buy natural gas. Local governments may aggregate the energy used by their residents and arrange for the purchase of natural gas as “governmental aggregators”. An aggregator acts as an agent for a buying group by reviewing energy supplier options, negotiating offers and making decisions about purchasing reliable energy services on behalf of the buying group. This issue would give the City of Athens the authority to aggregate natural gas.

By purchasing large blocks of energy, aggregated groups may have the advantage of being able to negotiate discounts on their energy prices. Residents who are a part of the aggregated group remain customers of their natural gas or electric utility company. However, their new energy supplier and rate will appear on their utility bill.

The stated procedure in a community’s gas aggregation plan must allow any customer enrolled in the aggregated pool to opt out of the program every two years without paying a switching fee. Customers opting out may return to the utility company or choose an alternative supplier. Customers may leave the program before the two-year date, but there may be a fee involved.

Benefits:

Aggregation allows consumers to combine their energy use to form a buying pool or group. These buying pools benefit residential consumers because suppliers may be more likely to negotiate with an aggregated group for service at a lower price than with an individual. When energy is purchased in large quantities, the cost of the supply is reduced.

Aggregation also makes residential consumers more attractive to suppliers because it lowers the suppliers’ costs of marketing to and signing up customers. As a result, suppliers may be able to provide better rates to aggregated groups. - Office of the Ohio Consumers Counsel

In addition to lower costs, it makes it possible to negotiate a "Green Option" with the gas supplier. - Elahu Gosney, Athens City Council

There is nothing in the legislation that requires that the city assume and exercise this authority. It only makes it possible to do gas aggregation at any time that doing so should appear to be advantageous to the city and the citizens.

Possible Concerns:

There is no guarantee that the aggregator will get better prices. The success of the program is unpredictable; it depends on the abilities of the gas aggregator.

The program is not available to consumers who already have chosen an alternative supplier or consumers enrolled in the Percentage of Income Payment Program (PIPP). - Mike Gebeke, Office of the Ohio Consumers Counsel