What is Opt Out Aggregation?
By Mary Ripley on May 30, 2018
What is governmental opt-out aggregation and how does it benefit me?
It wasn’t until the mid-1980s that the federal government decided to end monopolies and pave the way for a competitive marketplace in the energy industry. A competitive market was believed to offer more discipline in determining business practices and pricing than regulation.
In 1999, Senate Bill 3, which became the blue print for Ohio electricity deregulation, was signed into law. This allowed communities to aggregate after the voters of the community approved aggregation through an election. Under governmental aggregation, local officials bring citizens and small businesses together to gain group buying power for the purchase of competitively priced electricity from a retail electric generation or natural gas supplier certified by the Public Utilities Commission of Ohio (PUCO).
Ohio has what is called an “opt-out” aggregation program. For a community to participate in an opt-out aggregation program, a majority of the community’s members must vote for it in an election. All eligible customers of an aggregated community become part of the buying group unless they take specific action to opt-out of the aggregation. Opt-out notices are sent to every eligible natural gas consumer ever two years, and every three years for eligible electric consumers.
The theory behind public aggregation is simple: By combining the purchasing power of a large group to purchase energy in bulk, greater savings can be passed on to individual consumers.
Consumers in NOPEC communities not only gain the ability to utilize a team of experienced professionals to negotiate for better prices, NOPEC also ensures that communities have a voice in determining that future market changes benefit consumers. Large groups of communities such as NOPEC enjoy substantial leverage in making these determinations. Without an organization like NOPEC, consumers would be left to decide on their own which supplier to choose, and would be at the mercy of the supplier.
Watch this video on the aggregation process for more information:
Check back on June 15th for the next edition of Ask Mr. NOPEC. Have a question for Mr. NOPEC? Email it to firstname.lastname@example.org