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Jul 17, 2023

NOPEC is returning as an electricity aggregator in Ohio

by: Justin Dennis Posted: Mar 8, 2023 / 10:01 PM EST Updated: Mar 8,

by: Justin Dennis

Posted: Mar 8, 2023 / 10:01 PM EST

Updated: Mar 8, 2023 / 10:01 PM EST

[Watch previous coverage in the player above.]

COLUMBUS, Ohio (WJW) — The Northeast Ohio Public Energy Council, or NOPEC, will soon be back in the electricity business.

The Public Utilities Commission of Ohio on Wednesday approved the organization's certification to be an electricity aggregator in Ohio for another two years.

The commission previously required the aggregator to explain why it should be re-certified following its sudden move last summer to shift a half-million electric customers back to their non-aggregated price — called the standard service offer, or SSO — once NOPEC's electric rates skyrocketed amid a volatile energy market.

NOPEC argued it was acting in customers’ best interests, since the aggregator could no longer secure them a favorable electricity rate. The commission said the move cast doubt on NOPEC's capabilities. Suppliers who were then required to cover energy supply for those 550,000 customers said NOPEC's move threatened "chaos" in Ohio's electricity market.

NOPEC argued there's no rule that keeps it from dropping customers before the end of the aggregation period, which in this case was three years. It also asserted "it has never committed to match the SSO price" and that the three-year program was "not intended to hold customers captive." There's no termination fee for customers who quit NOPEC on their own.

NOPEC Executive Director Chuck Keiper issued a statement Wednesday that reads, in part:

As we contended from the start of this process, NOPEC has consistently met or exceeded all certification criteria required of governmental aggregators in the Ohio Revised Code over our 22-year history — and this application was no different. NOPEC's action in August to transition our electric customers back to the utility default service was in accordance with Ohio law and PUCO rules and was done to benefit our customers who will end up paying substantially less for their electric supply through May of this year. We are pleased that unfounded allegations from for-profit suppliers that stood to gain the most from a delay or denial of NOPEC's electric recertification were found to be unsubstantiated by the PUCO.

There were a number of reasons why prices skyrocketed last year, NOPEC spokesperson Dave Jankowski previously told FOX 8, but they all came down to supply and demand: There was the ongoing war in Ukraine; a hotter-than-usual summer, causing residents to crank their air conditioners; and ongoing supply chain instability caused by the COVID-19 pandemic.

It was the same kind of inflation consumers saw in the grocery store and at the gas pump, he said.

Energy buyers that lock in their prices — known as hedging — reduce the risk of loss when the markets shift, according to the New York Mercantile Exchange.

FirstEnergy's electricity rate stayed lower than NOPEC's last year because it was locked in before energy prices began to spike, Jankowski said last year. NOPEC, however, was only partially hedged during last year's spike, it told the commission. It believes that was one of the reasons for the rate increase.

Since then NOPEC has hired a consultant to help its hedging process and keep a large customer drop from happening again.

The commission's Wednesday decision came with a new minimum stay rule that keeps energy aggregators from dropping customers prematurely then re-enrolling them "in an unreasonably short time." Under the new rule, governmental aggregators like NOPEC that revert more than 5,000 customers back to their standard service offers will be prohibited from doing it again for 12 months.

In reverting its 550,000 aggregation customers last summer without warning, the commission found NOPEC violated its commitment to its member communities.

"This is a lack of transparency, and a breach of the aggregator's duty to the residents of these communities," Commissioner Dennis Deters said Wednesday. "The purchasing strategies implemented put residents at risk in a time of price volatility. Fortunately for those communities, with this commission's approval, the standard service offer was used as a backstop. But had the timing of these agreements been different, there may have been no protections in that reversion."

Deters said the aggregator merited recertification by showing "significant controls" and making operational reforms.

"Nevertheless, it's always important to recognize the prerogative that governments, their representatives and residents have to freely choose how their energy needs are served in Ohio's restructured energy market," he continued.

"My hope is that those acting for the benefit of individual communities to meet their energy needs, especially in an economic climate of inflationary pressure and energy volatility, recognize their commitment to transparency, open communication, and their fiduciary obligations — and that those actors that fail to meet those commitments are held accountable in the market."

NOPEC intends to start re-enrolling customers in its more than 200 member communities this coming spring, with the first meter reading planned for June, said Keiper.

"We look forward to continuing our electric aggregation program," he said. "We are confident that with the proactive addition of a highly experienced outside energy consultant to NOPEC's team, we have implemented additional measures to ensure delivery of competitive electric rates for the benefit of our residential and small business customers in NOPEC member communities."

Billing would return to the way it was before NOPEC dropped its half-a-million electric customers. The same goes for enrollment, which would be automatic in existing NOPEC communities, unless consumers choose to opt out and pick their own supplier by sending back the opt-out letter they would receive in the mail.

Not sure if you’re in a NOPEC community? Click here for a map.

Customers can also choose to enroll in NOPEC's monthly variable price or a 12- and 24-month fixed term products, Jankowski said.

Even though NOPEC's goal is to secure better rates for its communities, Northeast Ohio consumers should still check out FirstEnergy's "Price to Compare" — the rate FirstEnergy got through its electricity supply auctions — to make sure NOPEC's rate is lower. For Ohio Edison and Illuminating Company, that price through the end of March 2023 is a little more than 5 cents per kilowatt-hour.

Consumers should compare offers for electricity service using the state's Apples to Apples tool, which compares electricity and natural gas providers’ current rates and contract terms.

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