A Greener Cincinnati? Energy Aggregation Explained

Feb 8, 2012 at 2:45 pm

The Cincinnati City Council met on Monday to discuss the energy aggregation policy for the city, which, if implemented, could mean big changes in the way residents’ homes are powered.

In the meeting, Vice Mayor Roxanne Qualls introduced a motion outlining the possible use of renewable energy credits (RECs), also known as renewable energy certificates, through an energy aggregation program that could be put into place as soon as this June or July. The motion was passed unanimously by the Budget and Finance Committee, meaning that the city will be preparing to send out requests for proposal (RFPs) to power suppliers within the next few weeks.

In November, Cincinnati voters overwhelmingly approved Issues 44 and 45, which gave the city the authority to negotiate aggregation purchase rates of natural gas and electricity for residents and businesses.

Wondering what exactly energy aggregation is? In Ohio, communities are allowed to pool funds together and purchase natural gas and electricity as a group. Because a community pools together, that means it can access the lowest rates — think of it like a trip to Sam’s Club. The more you purchase of something at one time, the lower rate per unit you can access. —-

City Council’s ideas have been inspired, in part, by the practices of Oak Park, Ill., where a recently approved contract made it one of the first villages in the U.S. to purchase aggregated energy delivery through 100 percent renewable energy certificates, according to this article. In Oak Park, residents are saving an average of $15 per $100 energy bill. Over a five-year span, that's $900.

According to the EPA, an REC “represents the property rights to environmental, social and other non-power qualities of renewable energy generation. An REC, and its associated attributes and benefits, can be sold separately from the underlying physical electricity associated with a renewable-based generation source.”

In other words, if you hear news that 100 percent renewable energy is coming to Cincinnati, don’t expect to see windmills and solar panels popping up everywhere — that’s not how it will work. Basically, after citizens’ buying power is aggregated, the city will send out RFPs (Requests for Proposals) to power suppliers, and ask for pricing for sources of energy that are renewable from elsewhere. In Oak Park, the bid containing 100 percent renewable energy supplies just happened to be one of the lowest, making it an obvious choice for city officials.

As of now, there’s no guarantee that the costs for renewable energy will come back as closely tied with traditional energy sources as they did in Oak Park, but there’s a good chance officials may still be able to offer a 100 renewable energy to option to interested consumers. Consumers who want to stick with their old energy provided will have the opportunity ot opt out the program, should it change.