Common questions about energy aggregation and NOPEC
By Mary Ripley on July 6, 2017
What Does Energy Aggregation Mean for Ohio Residents?
Ever since energy was deregulated more than 15 years ago and energy aggregators came on the scene, Ohio residents have naturally had a lot of questions and concerns. Because NOPEC’s communities’ interests are, by extension, our interests, we want our members to be as informed as possible when making decisions in the energy marketplace. To that end, we’d like to address some of the concerns our residents have raised.
Does energy aggregation cost tax payers’ money?
Although NOPEC is a council of governments, NOPEC’s operations are not funded by government or by taxes. We’re actually funded by the energy suppliers we buy from.
Here’s how that works. As an energy aggregator, we buy from one electric company and one natural gas company for hundreds of thousands of customers. Because we buy for so many customers, we’re able to negotiate fair, stable prices. The energy companies that we choose to buy from benefit, too. They don’t have to worry about attracting, signing, or retaining customers—all of which eats into their profits when they market to individual consumers. In exchange for cutting out these costly processes, they offer our customers better terms and conditions and a wider array of products, and they give us a small operational fee.
Are energy aggregators just out to increase their profits?
NOPEC is actually a not-for-profit organization. We contract with energy suppliers on behalf of our communities, but we don’t make any money for our services.
NOPEC was created in 2000 after Ohio’s energy market was deregulated in 1999. Before 1999, the Public Utilities Commission of Ohio (PUCO) regulated energy prices and consumers could not choose their own suppliers. Deregulation created a competitive energy market.
After energy was deregulated, several local northeast Ohio governments came together to aggregate, or combine their purchasing power to choose electric and natural gas suppliers on behalf of their communities. This was the beginning of NOPEC.
Why am I automatically added into the NOPEC program unless I actively opt-out?
If you live in a NOPEC community, that means your community voted to be included in NOPEC. Here, the Public Utilities Commission of Ohio (PUCO) explains the steps a community must take to become part of government energy aggregation. However, even if your community voted to aggregate, individuals can still choose not to participate and to instead buy from private energy suppliers.
NOPEC’s electric customers receive opt-out forms every three years and natural gas customers receive them every two years. All you need to do is fill out this form and send it in, and there are no fees for opting out during the opt-out period.
There’s a major benefit to being part of an opt-out (rather than an opt-in) aggregation. The larger the buying group, the more buying power it has. It is difficult to make a sufficient number of residents aware of opt-in aggregations in their communities, so opt-out aggregations are usually much larger and their members (like you) see more benefits.
Why is my neighbor’s bill cheaper than mine even though I’m a NOPEC member?
There could be a number of reasons private energy suppliers sometimes have cheaper rates than NOPEC, but not all of those reasons mean NOPEC is not the best option for you.
Private energy suppliers often offer low introductory rates, but these rates eventually go up. When reviewing an offer, read the terms and conditions to see how long the rate is promised as well as other factors in the offer that might affect your energy costs down the road.
Rate stability is another issue you should note. NOPEC never offers gimmicks or short term rates. And because we are a non-profit, we aren’t focused solely on the bottom line. We focus on long-term energy savings
We have energy experts who understand the industry. They look out for our communities and consumers to negotiate better terms and conditions and make sure our members aren’t charged unfair amounts in fees from the energy companies.
If you have any more questions about NOPEC, take a look at our FAQs or contact us on Facebook or Twitter.Tags: