Sunbury Council holds first aggregation public hearing
By LENNY C. LEPOLA
News Assistant Managing Editor
Sunbury Village Council members held a special council meeting last Tuesday (November 20) evening, preceded by the first of two public hearings required by the Public Utilities Commission of Ohio before the village files papers to proceed with residential and small business electric and natural gas aggregation.
For nearly two years the Village of Sunbury has been exploring acquiring electricity for village facilities through an aggregation agreement as a cost savings measure; and has also moved towards electric and natural gas aggregation options for village residents by placing electric and gas aggregation issues on the November 8, 2011 ballot.
When the issues reached voters they approved allowing the village to negotiate residential electric and natural gas aggregation by significant margins — 925 village voters said YES to electric aggregation, 579 said NO; 935 voters said YES to natural gas aggregation, 579 said NO.
In June members of village council and village administrators interviewed potential suppliers for the village’s electric and national gas aggregation program. In July, with the assistance of energy broker Scott Belcastro, Trebel, Inc., they began creating a plan of operation and governance; and in early November council members approved both natural gas and electric plans of operation and governance and scheduled November 20 and November 28 public hearings.
Belcastro was in chambers for last Tuesday’s public hearing and council session, where he gave an overview of his firm Trebel before answering public and council questions.
“Trebel, LLC, was founded in 2010 to bring alternative energy providers directly to consumers and businesses,” Belcastro said. “We form strong relationships with energy suppliers that can meet the many needs of our customers. We offer a variety of programs such as fixed, variable and hybrid rate products that have services in nearly every deregulated state. Our primary mission is to help clients lower their energy supply costs, increase site efficiency, and leverage state and federal incentive opportunities.”
Belcastro said municipal aggregation refers to many customers joining together to form a buying group.
“The municipality organizes the pooling of its citizens to become the buying group; the municipality then seeks out offers on behalf of its constituents to get better pricing, terms and services than would be available to an individual,” Belcastro said. “It’s similar to garbage collection contracts with the municipality having the authority to negotiate on behalf of the entire community.”
Belcastro said there are two types of energy aggregation programs – opt-in and opt-out. In an opt-out program every qualified resident and small business in the community is included in the program and has 21-days from the date they receive a notification in the mail that they are in the program to to opt-out. An opt-in program is the reverse, residents have the option to sign on, but if they do nothing they stay with their traditional utility.
The Village of Sunbury is participating in an opt-out program. All village residents and small businesses would automatically be enrolled in the aggregation program; individual members may choose to opt-out if they decide not to participate. If residents or small businesses are already signed up with a supplier they would not be included in the program; they have to wait to the end of their contract’s term or cancel their existing contract to be included.
The plans of operation and governance Belcastro has negotiated with the village would have electricity supplied by Powell-based Border Energy, and natural gas supplied by Pickerington-based Volunteer Energy.
Belcastro said signing a one-year electric aggregation contract with Border Energy would save residents 15 percent off generation and transmission charges that appear on their electric bill; American Electric Power’s distribution charge would remain unchanged. Small businesses will save 10 percent off of the generation and transmission of electricity.
Border Energy’s residential early termination fee will be $50; and the electric bill would still come from AEP with Border Energy charges noted.
“Village residents would never pay more for electricity than they would with the utility under the Border Energy product,” Belcastro said. “It’s easy to join, easy to opt out, and completely voluntary.”
Volunteer Energy is a full-service energy supplier serving business, residential and industrial users in six states, Belcastro said. Volunteer Energy currently offers a savings of 7 percent off of the residential customer’s natural gas bill adder, with no early termination fee. Because natural gas rates will not be negotiated until February, Belcastro said, it’s not known whether or not the village would enter a natural gas aggregation agreement.
“Customers will get one bill from Columbia Gas with Volunteer Energy on the bill,” Belcastro said. “For service issues, because Columbia Gas and American Electric Power remain the local distributor, they would be the one to call for service issues.”
Sunbury resident Warren Owen asked if the process would have to begin again when the village reaches city status, and as the village grows would residents get even better rate reductions.
Fred Holmes, who was in chambers representing Volunteer Energy, said once voters approve aggregation it never has to go on a ballot again; Belcastro said rates are examined every year and there’s always a potential that a larger pool of participants would receive a better electricity rate.
Owen also asked how aggregation impacts budget plans.
Holmes said natural gas customers are permitted to remain on budget plans; Belcastro said electricity customers can remain on AEP’s distribution budget plan, but will not have budget plans for generation and transmission.
Village resident Janet Metzler asked if residents would receive an opt-out notice for gas and electric in one letter.
“You will receive a letter for both programs,” Belcastro said. “You can do both, one or none. A lot of residential customers and business owners don’t understand this process. By doing this the village is helping people who probably would have done nothing because they don’t understand it.”
Holmes noted another misconception area residents might have because of other aggregators working the village.
“There are people going door to door trying to sign up people for aggregation,” Holmes said. “We don’t do that. Remember, if people come to your door they’re not the village program.”
Council members had an up or down vote on the natural gas and electric aggregation plans of operation and governance following yesterday’s (Wednesday, November 28) public hearing and village council meeting.
If the village approved both plans Belcastro will file the aggregation applications with the Public Utilities Commission of Ohio, send opt-out notifications with 21 days for consumers to respond if they choose not to be in the aggregation programs.
Belcastro will work with suppliers to pull data together. He said electric would begin flowing at the new rates in March of 2013, natural gas in May of 2013, with consumer’s savings showing up on the next billing cycles after those dates.
Near the end of the council meeting, council members approved Resolution 2012–16 authorizing the execution of an energy management agreement with Trebel, Inc. with a rule suspension and emergency language.
Council members also approved Resolution 2012–17 authorizing execution of an electric sales agreement with Border Energy Electric Services, Inc. for provision of electrical energy for Village of Sunbury facilities for a two-year period, rule suspension and emergency language included. The agreement will save the village $42,000 in electricity costs over a two-year period.