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A new deal for roughly half a million ratepayers in Northeast Ohio will provide more clean energy in the wake of FirstEnergy’s decision to back out of a community aggregation agreement.
Starting in January, the new arrangement between the Northeast Ohio Public Energy Council and NextEra Ohio Services calls for half of the electricity to come from or be offset by renewable energy.
When FirstEnergy initially entered into its arrangement with community aggregator NOPEC, FirstEnergy Solutions got back thousands of generation customers that it had lost after the state shifted to a competitive market.
Aggregation groups residents and small commercial customers together to purchase electricity, allowing for the leveraging of buying power to obtain lower rates.
Compared to charges for non-shopping customers, the FirstEnergy arrangement provided a 6 percent discount for residential customers and a 4 percent price cut for small businesses. The deal would have run through 2019.
Those savings were possible because NOPEC has bargaining power that individual consumers do not have, said Sandy Buchanan of the Cleveland-based Institute for Energy Economics and Financial Analysis. That bargaining power “is a fundamental consumer protection that people have if they live in the areas that have done aggregation,” she said.
Then FirstEnergy announced to customers that the arrangement would be gone after December.
“Although we wanted to continue offering guaranteed savings to these communities . . . we could not continue to provide service unless NOPEC would lower their fees,” said FirstEnergy spokesperson Diane Francis.
Within days after it became public that FirstEnergy was backing out, NOPEC announced a new three-year agreement with NextEra Energy Services Ohio.
Consumers will have the same savings on their bill as they did before.
Beyond that, the new NOPEC-NextEra agreement will provide renewable energy credits (RECs) that, when added to those required under Ohio’s clean energy standards, will represent 50 percent of covered customers’ electricity usage.
Additionally, more than $10 million of sales revenue from the arrangement will go towards constructing renewable energy projects, at no additional cost to consumers.
“All of this is good news on the green and renewable energy front,” NOPEC executive director Chuck Keiper said when the deal was announced on Nov. 7.
“NOPEC has been a leader in bringing the benefits of electricity competition to Northern Ohioans, since the Ohio legislature deregulated power generation in 1999,” observed Ohio Consumers’ Counsel Bruce Weston. “With NOPEC’s announcement of a new partner for its power supply, NOPEC’s electric service to consumers will continue despite the recent decision of FirstEnergy Solutions to withdraw its power.”
In Buchanan’s view, the fact that another supplier is stepping in so quickly to fill FirstEnergy’s shoes also means that both deregulation and the chance for community choice aggregation are working.
“The proof is in the pudding,” she said.