Cleveland will sign an electrical aggregation contract with the Sustainable Ohio Public Energy Council, but too late to shield FirstEnergy customers from a summer hike in generation rates.
City Council approved the deal with SOPEC on Monday night. But council members chastised Mayor Justin Bibb’s administration for taking too long to line up a contract.
“This should have been done months and months and months ago,” Ward 16 Brian Kazy, the chairman of the utilities committee, said Monday.
Electric bills contain two different charges: one to use the utility’s wires and one for the supplier of the electricity.
The aggregation contract enables Cleveland to use the buying power of the city’s FirstEnergy customers to negotiate a lower rate for the electric supply. But because of the administration’s delay, that contract won’t go into effect until August.
FirstEnergy has warned its customers that overall electric costs could jump 47% percent beginning in June for customers who rely on the utility for both parts of their bills. The Akron-based utility’s supply rates are expected to rise from 5.9 cents per kilowatt-hour to 12.4 cents per kilowatt-hour.
Customers can proactively seek out a lower rate for electric generation before August by going to the Public Utilities Commission of Ohio website. On its own website, Cleveland’s Office of Sustainability recommended that customers wait for the city’s aggregation deal to start up, “but understand concerns about June and July electricity rates going up compared to spring prices.”
Cleveland’s aggregation contract would enroll all eligible FirstEnergy customers in the city unless they choose to opt out. Customers of Cleveland Public Power are not part of the contract, and customers with other independent suppliers would not be enrolled automatically.
SOPEC has more than two dozen member communities, including Dayton. But Cleveland would be the biggest city to join so far.
“We’re signing up with the Mayberry of aggregators,” Ward 8 Council Member Michael Polensek said. “You better hope this works.”
Sustainability Director Sarah O’Keeffe and other administration officials previously told council they estimate SOPEC will provide 100% renewable electricity credits at 6.963 cents per kilowatt-hour. Customers can opt for 50% renewable credits at 6.776 cents per kilowatt-hour or 0% renewable electricity at an estimated 6.588 cents per kilowatt-hour.
City officials said they expected SOPEC to finalize prices in mid-June, meaning the cost estimates could change by the time the contract is ready for signatures.
Council members pressed the Bibb administration to explain why it took so long to come forward with a contract. Ward 15 Council Member Jenny Spencer said she wanted to hear directly from Bibb on the issue.
“It’s been keeping me up at night all week, the question of, when people start getting their bills in June, and there will be a lot of angry people,” Spencer said. “I’m looking for a statement from the mayor about this.”
Marie Zickefoose, the mayor’s press secretary, told Signal Cleveland that the city would hold public hearings May 31 and June 1 on the new contract.
“We regret that the administration was not able to issue a community choice electricity aggregation program RFP earlier this year,” she wrote in a text message. “We strongly believe the administration’s selected program, with approval from Council, will provide longer-term cost savings with a stable product that accommodates all eligible FirstEnergy customers and small businesses at competitively priced options.”
To compare electric rates, visit Ohio’s apples-to-apples comparison for Illuminating Company customers here.