Electric rates in Valley are going up... here's how to lock in savings now
Many people in the Valley are receiving letters notifying consumers that they will be automatically enrolled in an electric aggregation program unless they opt out by May 2.
As you may remember, last fall, some Valley residents reported soaring electric bills, including Warren and other cities, villages, and townships. Those seeing the spike were customers who were enrolled in an electric aggregation program called the Northeast Ohio Public Energy Council, or NOPEC, for short. It is a non-profit organization that clusters its buying of utilities for reduced pricing for its customers.
In this 21 News Watchdog report, we looked into what this means to you as a consumer, if you should opt in or out of the aggregation, and what experts recommend you should do if that isn't an option for you.
WHAT IS AGGREGATION?
The purpose of aggregation is to purchase utilities in bulk for multiple communities, in this case, electricity, lock in a long-term rate, and pass the savings on to customers.
LAST YEAR MY BILL WAS HIGHER IN AN AGGREGATE
In northeast Ohio, more than 40 percent of our electricity is generated by using natural gas after decades of coal use or nuclear power.
Last year’s unprecedented spike was due to multiple factors, including Ohio Edison auctions for utilities, purchased over a multiple-year period at a lower rate than NOPEC, which bought its supply when rates were extremely high.
Because it was unable to offer a better rate than the utility provider Ohio Edison, NOPEC switched customers to the default rates set by Ohio Edison and First Energy, which is called the Standard Service Offer of SSO.
Right now, the SSO rate is under 6 cents per kilowatt, but come June 1, that rate on your bill will almost double. However, NOPEC customers are being offered a new fixed rate of about 6-and-a-half cents per kilowatt, slightly higher than what you are currently paying, but significant savings if you stay on the SSO come June.
WHAT THE EXPERTS ARE SAYING
21 News spoke with experts from the Ohio Consumers' Counsel and the Public Utilities Commission of Ohio on whether it is a good idea to switch back to the aggregate or stay with the base Ohio Edison rate per kilowatt. Here is what they said.
J.P. Blackwood, Public Affairs Liason with Ohio Consumers’ Counsel, told 21 News that electric bills would see a dramatic increase. “We found that aggregator offers like NOPEC can help people avoid that right now. So if they’re on with NOPEC, they’re going to miss that big increase that’s slated to come June 1,” Blackwood said.
Blackwood added,” I think it would be wise if you have access to an aggregator, I would, if I was a customer, I would look at the 12-month fixed rate NOPEC is offering.”
For those who are hesitant after the NOPEC spike in the past, we asked for an explanation from NOPEC and the state agency aimed to protect utility customers.
Dave Jankowski, the Chief Marketing and Communication Officer for NOPEC, said last fall NOPEC was trying to negotiate during a worldwide energy crisis and was left with no choice but to cancel service with customers because the default rate was considerably lower.
WHAT IF I DON’T BELONG TO AN AGGREGATE?
For electric customers that don’t have an aggregate buying electricity in bulk, which includes Youngstown, Austintown, Boardman, Canfield, Canfield Township, Poland and Poland Township, and others, rates are expected to rise this June.
NOPEC aggregation communities in the Valley include:
- Newton Falls
- Beaver Township
- Coitsville Township
- Ellsworth Township
- Goshen Township
- Green Township
- Jackon Township
- Leetonia village
- Liberty Twp
- McDonald village
- Milton Township
- Palmyra Township
- Smith Township
- Springfield Township
If you are paying that standard service offer, here’s some perspective on what to expect in a couple of months:
If a household uses 1,000 kilowatts per month, the bill would be almost $60 bucks under the current default rate.
The upcoming increase would make this rate around $100 dollars per month, a 66-percent increase, not including the distribution fees all customers pay.
Both the PUCO and the Ohio Consumers’ Counsel both said if aggregation is available, consumers should consider joining to help prevent their electric bills from drastically rising.
Anyone paying the standard SSO rate who wants to look for a lower rate from third-party suppliers can call the Ohio Public Utilities Commission for advice or can visit the Apples to Apples website. However, experts advise you to be careful and watch out for offers that may be considerably lower than others, as they could contain large hidden fees if you decide to end the service or may have a variable rate and may fluctuate costs month to month.
Blackwood pointed to the below websites to help Ohioans understand their options, and tips for choosing a third-party electric supplier responsibly.
- How to Make Wise Energy Choices Fact Sheet: https://www.occ.ohio.gov/factsheet/wise-energy-choices
- All OCC Fact Sheets: https://www.occ.ohio.gov/factsheets
- OCC Website: https://www.occ.ohio.gov/