The concept of electric choice takes on new meaning this Election Day in Cincinnati. By voting yes on Issue 44, Cincinnati voters will choose to harness their collective buying power and empower the city to negotiate lower electric rates on their behalf.
The lower rates are possible through “aggregation” – a proven, effective model that allows a community to band together and obtain a volume discount on electricity supply. Consider it like a city-wide Groupon, good toward a sizable discount for all participating homeowners and small businesses. But unlike half-off movie tickets or cut-rate spa treatments, governmental aggregation affords us a break on something everyone needs and uses every day – an affordable, reliable supply of electricity.
A hallmark of competitive energy markets promoted under Ohio law, governmental aggregation has already helped more than 300 Ohio communities save hundreds of millions of dollars since the state began promoting these programs in 2000. And the timing of these ballot measures couldn’t be better. With the lingering recession, electric power prices are at historic lows – providing consumers with a genuine opportunity to lower their electric bills.
Against this backdrop, Issue 44 is a slam dunk. Many of our suburban communities have adopted similar measures and are saving a lot of money. The City of Cheviot’s supply contract saved its residents 65 percent over Duke Ohio’s best price. The average resident of the Village of Indian Hill saves $74 a month on electricity with a guaranteed rate. Incredibly, West Chester Township homeowners and small businesses collectively saved nearly $5 million on their electric bills in just 10 months.
City residents and businesses should ask themselves: why should this financial windfall be reserved for affluent suburbs? The concept is tailor made for our city. Despite battling through a stubborn recession, Cincinnati remains one of the largest cities in Ohio. “Strength in numbers” is an asset we have, but seldom leverage to our advantage.
Pending the ballot outcome, the city has not yet entered into a contract with a third-party, competitive electric supplier. But suppliers are already lining up to compete for the business. Without a supply contract in place, how much each customer can save still remains unclear. But with individual homeowners already getting offers of 30 percent or more off the Duke Ohio generation charge – and judging by the results in surrounding communities – the volume discount in Cincinnati could be substantial. According to Ohio Citizen Action, electric rates negotiated by other buying groups in the area range from two to 3 ½ cents per kilowatt-hour less than Duke’s current generation rate, or “price to compare.”
In light of these potential savings, the benefits of aggregation should far outweigh any perceived risks. All customers will continue to receive one bill from Duke Ohio, who would remain responsible for billing, upgrading and maintaining the electric distribution system, and responding to outages and emergencies. Concerned voters – particularly those inclined toward individual choices – should recognize that participation is optional. Like other aggregation groups, Cincinnati’s program would employ an “opt-out” model, so residents will be automatically enrolled unless they choose otherwise.
If the measure passes, city residents and businesses will allow the city to create an aggregation group, and a supply contract would be put out for bid. Only after a thorough process takes place – including at least two public hearings – will residents be enrolled in the program unless they freely choose to opt out.
In the meantime, the best thing Cincinnatians can do is vote “yes” for electric aggregation on Nov. 8. It’s a proven, effective means of reducing energy costs – and putting more money in the pockets of our residents and small businesses.
