Climate & Energy Local News News

Energy Aggregation: How Athens is reducing their consumption

By Andrew Pasquale, staff writer

electriclines

This coming March, Athens residents who chose not to opt-out of the electric aggregation program will be seeing a savings of 28 percent on their electric bills. This movement of areas all across Ohio is making a difference for the environment and people’s wallets.

In November of 2013, 84 percent of Athens City voted yes on Issue 3 to approve municipal electric aggregation. In unincorporated areas of Athens County, 52 percent voted yes on Issue 2, which was the county analog to Issue 3.

By approving these ballot measures, the people gave permission to the city to buy electricity in bulk. Such large purchases allow the aggregator to negotiate the price below what individuals would pay on their own.

After voting for aggregation, Athens partnered with the Southeast Ohio Public Energy Council (SOPEC), which is the council of governments that negotiates with power companies on the aggregated community’s behalf.

Background of the energy aggregation movement

When electricity first came onto the market, providers were free to do business how they pleased without oversight or regulation. Areas with large populations and high demand attracted multiple service providers, all of whom built their own generation, transmission and distribution infrastructure. With so much competition in such a small area, service was good and prices were low. In more remote areas with lower demand, the service tended to be unreliable and expensive, if it was available at all.

In an effort to remedy this situation, the federal government set up regulated monopolies, which exist when only one company is permitted to do business in an area. The government requires the company to serve profitable and unprofitable areas alike and ensures that customers are not gouged with unfair prices. In exchange, the government covers some of the company’s costs to keep it in business.

For a while, regulated monopolies served their intended purpose of giving consumers peace of mind regarding service quality and price stability, but by the late 1990s, consumers wanted a little more. In January 2001, Senate Bill 3 went into effect, the regulated monopoly fell, competition was reintroduced to the electricity market and consumers were granted the right to aggregate.

Shortly after Senate Bill 3 was passed in 1999, the Northeast Ohio Public Energy Council (NOPEC) in Solon, Ohio began aggregating nearby communities. Since their inception in 2000, NOPEC has become the largest governmental aggregator in the country.

The current efforts of SOPEC

While much can be learned from NOPEC’s successes, certain difficulties that SOPEC faces are endemic to southeast Ohio. Roger Wilkins, executive director of SOPEC, cited poverty caused by a long history of exploitative extractive industries as a barrier to aggregation.

“We first had all of our timber cut and taken out and coal, and now we’re facing fracking and extraction of gas,” Wilkins said.

In a little over a year since SOPEC formed, Wilkins and his colleagues have done some amazing things. SOPEC’s daily operations and overall organizational structure are patterned after NOPEC’s, but where the newcomer has truly excelled is in its negotiating strategy. While NOPEC has consistently received fixed reductions of equal to or less than 10 percent below the market price, SOPEC in its first year has come out way ahead with an average savings of 28 percent.

SOPEC also created the UpGrade Athens County (UAC) project, and is participating in Georgetown University’s Energy Prize competition. Athens was recently announced among the list of semifinalists who will continue competing until a winner is decided in 2017. The $5 million reward goes to the city with the best plan to substantially and sustainably reduce per capita energy use from electric and natural gas utilities.

SOPEC is also the first aggregator in Ohio to include local renewable generation and energy efficiency programs. To increase local solar generation, SOPEC is working with Third Sun Solar Power of Athens to install a 10-acre solar farm at a Nelsonville landfill along State Route 691. The electricity generated from this facility will be fed into the grid. Then, if the negotiations pan out, energy-intensive city and county buildings will have their bills credited for the amount of electricity the farm generates.

While Third Sun works on producing more renewable energy for Athens, Empower Gas and Electric is responsible for cutting back energy use, no matter the source. Americorps volunteers will visit homes and businesses, informing people about energy efficiency audits. From there, Empower will contract with local businesses to implement the efficiency measures. Part of why Empower was chosen for the job is their emphasis on community and keeping local dollars as close to home as possible.

SOPEC’s impressive list of early achievements has not caused Wilkins and the rest to become complacent and rest on their laurels. SOPEC is currently forming plans with NOPEC to buy natural gas together.

Another potential direction for SOPEC’s future is creating a subsidiary that is tax-exempt and eligible for certain types of grants. Over the past year, NOPEC created such a subsidiary called NOPEC, Inc. According to Wilkins, NOPEC still exists to handle the day-to-day business of electric and natural gas aggregation. He continued, explaining that NOPEC, Inc. is simply a different type of nonprofit that is eligible for these extra benefits. In time, Wilkins said, SOPEC plans to follow a similar path.

The opposition to energy aggregation

The Ohio Statehouse has seen no shortage of heated debates over renewable energy and energy efficiency over the past few years.  The most recent attack on Ohio clean energy was Senate Bill 310 in 2014. This law froze certain mandates at current levels for two years and stripped a few away entirely. In its final action, Senate Bill 310 created a thirteen-member committee to study the pros and cons of the mandates during the two-year freeze. The major problems with the committee are that nine out of the twelve voting members voted for Senate Bill 310, First Energy has donated to 11 and AEP to at least nine.

If the stacked study committee is not evidence enough that Senate Bill 310 is not truly interested in giving clean energy a fair chance, the last section of the act should be. It states that the mandates as they stand may be “unrealistic and unattainable”. It goes on to say that the General Assembly intends to “reduce the mandates” regarding the renewable energy, alternative energy, energy efficiency and peak demand reduction benchmarks put into place by Senate Bill 221, which laid out mandates that required 25 percent of Ohio’s energy to come from alternative sources by 2025, with half a percent coming from solar. Where is the objectivity when the committee says that it will reject the mandates before it even begins to study them?

Looking ahead to Ohio’s energy future

One especially pressing question comes to mind. What happens in 2017? If the study committee allows the mandates to thaw, some requirements such as 12.5 percent advanced energy and 6.5 percent Ohio-sourced renewable energy still have been removed and so will not get back on track.

Regarding Senate Bill 310’s effects on clean energy projects, Wilkins said, “Senate Bill 310 really has put a damper, state-wide, on renewable energy and in some respects we think that our local efforts become all the more important in the face of that because we’re not getting support from the state level.”

Even without state support, Athens is moving ahead with local solar and efficiency projects and has a chance to win $5 million for further development. SOPEC is contracting with local businesses to create its own generation capacity and the accompanying efficiency measures will only serve to strengthen those efforts. If there is a takeaway from all of this, it is that oftentimes change is slow. Protests and demonstrations are important to educate and arouse, but the work behind the scenes is of equal importance. SOPEC has a lot of growing to do to reach NOPEC-status, but if the past year’s successes are any indicator, Athens may prove to be an emerging leader in Ohio’s clean energy economy.


Andrew is a recent graduate of Ohio University’s Environmental and Plant Biology Department who makes his own deodorant and chocolate. You can usually find him out in Waterloo or in Porter Hall helping with ecophysiology research. On the weekends, he works at The Village Bakery

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