Willard signs with Dynegy Energy for electric aggregation
Significant price increase expected; opt-out aggregation program available
With the current electric aggregation expiring in May 2025, the city of Willard has signed a new electric aggregation agreement with Dynegy Energy, the municipal government reports, noting that electric prices are expected to increase significantly starting June 1.
The previous aggregation agreement was a 20-month agreement that commenced with the September 2023 billing cycle and ended with the May 2025 billing period, Willard City Manager Bryson Hamons detailed in his extensive March 17 written report to City Council.
This expiring term rate was fixed at $.06386 kWh for the last aggregation agreement. However, with the significant increase in the capacity rates from PJM Interconnection, electric prices are expected to increase significantly beginning June 1, he wrote, describing this as unfortunate.
"Starting with the May 2025 meter read date through June 2026 (13 months), the aggregation price will be $.0938/kWh,” he detailed.
"Dynegy Energy provided the best pricing option once again for the aggregation," Hamons wrote. "Therefore, they will be sending letters out to all eligible participants in the near future letting you know of your enrollment into the program and your right to opt out by mail or phone. There is no fee to opt out. Unlike some aggregation agreements, your price will be a fixed rate for the next 13 months."
In 2014, the majority of voters in the city of Willard approved a referendum that authorized the formation of an "opt out" aggregation program, he noted.
Hamons also said that Willard does not receive any "grants" or "reimbursements" "therefore, any possible savings are passed on directly to our residents."
"It is always the recommendation of the city administration for each consumer to research the best supplier option from which to purchase electricity," he said in the report.
A CLOSER LOOK
Hamons also wrote that:
-- If you are already enrolled with another supplier, you should not receive a letter to enroll in the city's aggregation program.
-- If you opt out and do not go with another supplier, you will return to AEP's standard residential "Price to Compare" pricing.
-- If selecting another supplier, make sure there is no monthly fee, early termination fee, or variable pricing that could increase without your authorization.
-- An "excellent website" to compare available rates and to learn more about your electric supply options is https://energychoice.ohio.gov
"Electric Supply (Generation Service) is only a part of your bill," Hamons added. "Other charges include transmission services, distribution services, and miscellaneous fees."
-- For questions about the components of your bill, call AEP at 1-800-672-2231. For any questions about the aggregation program, get in touch with the city manager's office at 419-933-2591 for assistance.
Hamons’ report specifies that:
-- Capacity charges are fees paid to the electric grid operator (PJM) to ensure power plants remain operational and capable of meeting electricity demand on any given day.
-- PJM, the Regional Transmission Organization overseeing the electric grid in Ohio and 12 other states, announced a substantial increase in capacity charges due to their generation capacity auction.
-- These rates went from $29.50/MW-day for most Ohioans to $270.35/MW-day and as much as $466/MW-day near Baltimore.
"The higher prices from the market auction confirm what many in the market believe in that the supply/demand balance is tightening drastically with not a lot of excess power supply," Hamons said.
-- It is expected that the increase in capacity charges could equate to an increase of up to 4 cents per kWh, potentially leading to a 20-30% increase in overall energy costs.
"The growth of technology is placing a strain on our grid system with the addition of large data centers, electric vehicles, and new rules by [the] Federal Energy Regulatory Commission (FERC)," Hamons wrote. "At the same time, supply has been reduced by generation retirements over the past several years, with longer and costlier timelines for constructing new generation plants."
Citing PJM data, Hamons said 48% of its electric generation capacity comes from natural gas-fired generation plants, followed by nuclear at 21%, coal at 18%, demand response at 5%, hydroelectric at 4%, solar and wind at 1% each, and 2% from other resources.