Electric Aggregation Yields Savings for Troy Residents

Electric rates scheduled to be slashed by 11%

In 2011, Troy, Ohio's voters approved the Electric Aggregation Program. This program allows the city to negotiate a single electric supply rate with providers, also giving individuals the choice to opt out if they find cheaper options elsewhere.

Electric aggregation came into effect with Senate Bill 3 in 1999, which introduced electric deregulation in Ohio. The goal was to shake up the electric utility industry, spur competition, and give consumers the power to choose their electricity suppliers. This move aimed to lower electricity costs, foster innovation, and improve service by ending the monopolies of existing utilities.

The shift to electric deregulation happened gradually, fully taking effect by January 1, 2001. This period helped everyone adjust to the new competitive scene. Although deregulation opened up the competition for generating electricity, the local utility companies still managed its transmission and distribution. So, while people could pick their electricity generator, the actual delivery of electricity remained with their local utility. The same law also allowed Ohio's cities to start their own electric aggregation programs, with voter approval.

Electric aggregation is a smart way to manage electricity rates and potentially lower energy costs for residents. By grouping together residential and small business accounts, cities like Troy can negotiate bulk electricity rates, typically resulting in savings. Notably, Troy collaborates with the non-profit Miami Valley Communications Council and its 17 member communities, pooling together a large number of consumers to further drive down costs.

Recently, Troy announced a new electric rate of 6.57 cents per Kilowatt-Hour (kWh), nearly 11% less than the previous rate of 7.26 cents per kWh. This reduction is a boon in times when prices for many goods and services are climbing.

In contrast, nearby Piqua and Tipp City, with their own public electric systems, do not participate in electric aggregation. They don't generate electricity but manage its distribution and system upkeep. Their utility bills include electric charges along with water, sewer, refuse, and stormwater fees. Both cities have higher electric rates for residential use. Tipp City's rate is 14.78 cents per kWh, more than double Troy's aggregation program rate, while Piqua charges 9.97 cents per kWh, 37% higher than Troy's rate. Troy's current rate also undercuts the standard AES Ohio rate of 10.81 cents per kWh.

Comparing electric rates involves considering operation scale, electricity procurement methods, and program or utility administrative costs. Troy's aggregation program seeks to offer lower rates through bulk buying, an appealing choice for those looking to cut energy expenses. However, for commercial and industrial users, other factors like demand charges and reliability rates are also crucial. Yet, for residential customers, comparing kWh rates is a straightforward way to gauge cost differences.

Troy residents participating in the Electric Aggregation Program enjoy potential savings and simplicity, with the city negotiating on their behalf. Meanwhile, Piqua and Tipp City residents benefit from their municipal utilities' direct control, possibly offering better service and reliability.

Troy's Electric Aggregation Program is an active approach to energy management, providing an attractive option for residents aiming to reduce their electric bills. When compared to other communities, it's evident that each has its strategies and advantages for electric services. The best option for residents or businesses depends on their specific needs and preferences, underscoring the importance of comparing program details and rates.

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