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Toledo, Ohio & Lake Erie

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Oregon City Council at its last council meeting in February approved a three-year agreement with FirstEnergy Solutions Corp. to act as the city’s electricity aggregation supplier.

The rate was negotiated by the Northwest Ohio Aggregation Coalition (NOAC), of which the city is a member. The three year term starts in June of this year to June of 2020.

NOAC, on an annual basis, evaluates and makes recommendations as to whether communities should enter into agreements with managed programs. NOAC, through Palmer Energy, solicited proposals for a new supply of electricity, and at least three proposals were received. After a thorough review of each proposal, it was determined, and recommended by Palmer Energy, that the proposal of FirstEnergy Solutions Corp. be accepted as the one that would provide the most cost savings to communities that are members of NOAC. It is estimated that the contract with FirstEnergy Solutions Corp. will save the NOAC customer base about $4.5 million per year.

Law Director Melissa Purpura said NOAC solicited quotes from eight energy firms for the contract, and received three proposals from Constellation Energy, Dynegy, and FirstEnergy Solutions Corp.

FirstEnergy Solutions Corp., she said, offered the highest savings for residents and small businesses.

Consumers have the option of signing up with another energy company at no cost, she said.

City Administrator Mike Beazley cautioned the public about door to door salesmen trying to sign them up to a “cheaper” rate.

“Any of our residents have the right to sign up with anyone they want,” said Beazley. “In the last 15 years, I’ve never been aware of anyone saving money by switching.”

Mayor Mike Seferian said some energy companies have an introductory offer, but later raise the rates that cost more in the end.

“It will save you money for a short time, but then is changes very fast and costs more money,” said Seferian.

FirstEnergy Solutions Corp. is automatically the electric provider for NOAC communities unless consumers sign forms to “opt out” of the contract.

Opt out letters will be mailed to all consumers in mid March if they do not want FirstEnergy Solutions Corp. to be their electric provider.

“If you want FirstEnergy Solutions to be your provider, you do nothing,” said Seferian.


Tariff rate
At the council meeting, Councilman Tim Zale asked what would happen if FirstEnergy Solutions Corp. was unable to fulfill the contract during the three year agreement.

“In the event that something would happen to FirstEnergy – if the company would default – what happens to the energy rate and what happens with our source of energy if that should take place?” asked Zale.

Beazley said some precautionary measures were taken by NOAC this year to protect the member communities.

“We took steps with the aggregation coalition this year: In that past, the company that was providing our energy would hold our escrow account more or less. Just to make sure we protected the interests of the individual communities, we have switched the way that is held so it’s not in the hands of the company providing it for us,” said Beazley, “so we’re protected in that way. In addition, if the company was no longer able to fulfill its contract, NOAC would default to the tariff rate.

“The tariff rate is not a bad rate in and of itself,” said Beazley. It’s just the regulated tariff rate. Then we would seek other options and proposals, should that take place. Those things were factored in when we looked at the proposals that came in. [FirstEnergy Solutions Corp.] was still the best proposal out there. If something happens in the market, and they stop providing us, then we’ll go out and get proposals again. But we’ll go to the default tariff rate, which is slightly above this rate, should that take place.”

Millions saved
Oregon, along with several other local communities, is a charter member of NOAC, which was formed in 2003 to permit aggregation by governments of gas and electric purchases to try and save consumers on their utility bills. Most of the communities in Lucas County that joined to form NOAC saved residents and small businesses in Northwest Ohio significant sums of money by aggregating purchases of electricity. It also has saved consumers millions of dollars in their natural gas bills versus the Columbia gas tariff price.

Besides Oregon, NOAC is currently comprised of the following member communities: Northwood, Toledo, Lucas County Commissioners representing the unincorporated areas of Lucas County, the board of township trustees for Lake and Perrysburg townships, Maumee, Perrysburg, Rossford, Sylvania, Waterville, the villages of Holland and Ottawa Hills. Each member community has input and responsibility within the coalition, with the two largest members, Toledo and Lucas County, taking the lead on most coalition matters.

 

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