About 240 communities in the state are served by the energy aggregator NOPEC, whose mission is to purchase in bulk and pass the savings on to its clients.
However, something caught Danielle Negrelli’s attention when she logged onto her computer to pay her electricity bill.
Negrelli said, “You get your bill, you pay it, and then, bam, there’s like this higher bill that I expected over the summer but I didn’t expect it to be as high as it was.”
The utility claimed it informed customers via notices that they would be automatically enrolled in an aggregate program but that they could withdraw their consent at any time by contacting the company.
The fact that it’s an opt-out program rather than an opt-in could be very confusing for consumers, Negrelli said, “but I’m not looking at every single piece of paper that looks like its meaningless, so that part might be on me that I missed it.”
A NOPEC representative claimed that the sharp increase was caused by a rise in inflation, but added that customers who did not opt out in advance are still responsible for the bill even if they do so later.
The next step, according to Negrelli, is to hold NOPEC responsible for the rate change while also ensuring that NOPEC satisfactorily explains itself to the community.
Mayor Khalil Seren of Cleveland Heights is one of several local figures educating his constituents about this problem.
“As I’m out and about in the neighborhood, I’ve received some communications from residents, mostly in-person communications. People converse with me, and we discuss this sharp rise, Seren said.
Negrelli said she has opted out of the program but hopes the company will improve communication in the future.
I consider how long I’ve been enrolled in this program and paying this extra fee without really understanding what it is, Negrelli said.
Buying in bulk: How NOPEC got started
Ohio lawmakers began to partially deregulate the energy market in the late 1990s, changing how residents of Ohio purchased electricity and natural gas.
Ohioans can now purchase power from any supplier on the open market.
They are unable to choose their utility, such as Ohio Edison or the Illuminating Company, which delivers electricity or natural gas to their homes.
Consumer advocates believed that one household alone couldn’t negotiate better prices when the rules were being developed more than 20 years ago. Advocates lobbied to create the opt-out government aggregation option.
If voters approved, a municipality could make purchases on behalf of its citizens. Unless they chose to opt out, residents would automatically be a part of the city’s buying group.
Greater Cleveland residents voted to create these groups in more than 100 communities. The majority of cities then joined NOPEC, which was established in November 2000 to represent 95 communities at the time, in negotiations.
According to Keiper, “We were the very first to compete with privately held utility companies, like FirstEnergy.”
By the spring of 2001, NOPEC was purchasing electricity for locals. It started an opt-out natural gas program in 2002.
Local officials make up the board of directors that oversees NOPEC. In the NOPEC general assembly, each NOPEC community elects a representative and gets one vote. Each county’s representatives elect a board member from that county as well.
Getting discounts: How has NOPEC faired over the years?
NOPEC has not always been the most affordable choice in recent years. But for many years, NOPEC was less expensive than the utility’s standard service offer, which is typically referred to as the “price to compare” on utility bills.
The typical service offer has a variable price and is intended to serve as a backup and supplier of last resort. The standard service offer is there to keep the lights on if a household chooses a supplier and there is a problem, such as a business going out of business.
Ohioans receive this option directly from their utility if they don’t choose a supplier and if local leaders or NOPEC aren’t doing the shopping for them.
The initial contracts with NOPEC included a guarantee of a discount from the regular service offer.
Green Mountain Energy and NOPEC had a contract that promised a discount from 2001 to 2005. Then, between 2006 and 2008, the PUCO halted the majority of energy shopping through regulations, which prevented NOPEC and other aggregators from providing electricity to communities.
When NOPEC started supplying electricity again in 2009, Energy Harbor (then FirstEnergy Solutions) and NOPEC agreed to a nine-year contract that included a 6% discount for locals.
For instance, if Ohio Edison or the Illuminating Company offered standard service at 10 cents per kilowatt NOPEC’s price would be 9. 4 cents.
Energy Harbor terminated the agreement, most likely due to financial losses from the transaction. Later, it sought Chapter 11 bankruptcy relief and was spun off as a separate business from FirstEnergy.
NOPEC signed a new contract with NextEra Energy. In 2017, the new “standard program price” was competitive, but it was unrelated to the utility’s rates.
Because electricity from the utility companies was purchased in advance, its price did not accurately reflect the state of the electricity market.
According to NOPEC, when you combine that with low wholesale prices, energy companies were unable to offer that kind of product.
This was attributed to competition in a joint study from Ohio State University and Cleveland State University.
This demonstrates the strength of a competitive market in operation, researchers wrote in the study. The margins for aggregators and brokers are currently being squeezed because the PTC (price to compare) is so close to the market equilibrium price. ”.
Before 2019, NOPEC anticipates saving its clients more than $300 million. NOPEC spokesman Dave Jankowski claimed that after the guaranteed discount program was discontinued, tracking savings became more challenging.
NOPEC offers four electricity products. These include monthly variable rates that are less expensive than the standard service offer and 12- and 24-month contracts with enrollment limited to 2. 5% of the customers.
The vast majority of NOPEC customers, 97. 5%, are in the “standard program price. These are the clients who experienced price increases this summer.
Russia’s invasion of Ukraine, according to NOPEC CEO Keiper, is a major factor in this year’s skyrocketing prices for both NOPEC and the wholesale electricity market as a whole. However, timing was primarily to blame for NOPEC’s increase in price relative to the offer of the standard service.
The utilities typically purchase electricity well in advance for their standard service offerings, but NOPEC typically purchases electricity closer to the time of its use. Both methods have upsides and downsides.
A business could lock in a year’s worth of electricity at $50 per megawatt, for instance.
Locking in savings if the cost doubles to $100 in six months However, purchasing in advance was a mistake if the price drops to $25.
Ohio’s electricity costs have been stable or dropping for a while. In order to be able to lower its rates as prices fell, Keiper claimed that NOPEC always used a variable rate and avoided locking in a rate.
After Russia invaded Ukraine in February, electricity costs rapidly increased.
Keiper claimed that by April, there were clouds forming over the energy market. The Nord Stream 1 pipeline, which transports natural gas to Europe, was first shut down by Russia in July.
European countries needed to find natural gas from new sources. These customers flooded the market, raising the price of natural gas. Much of the U. S. electricity is generated using natural gas.
That is when we said the cloud wouldn’t clear, according to Keiper. “It will only get worse. ”.
NOPEC was charging customers 6. 95 cents a kilowatt hour in February. That jumped to 8. 7 cents in May, then to 9. 7 cents before peaking at 12 cents in July.
Approximately 550,000 customers were temporarily dropped from the utility, which was the cheaper course of action due to timing.
According to Keiper, NOPEC stopped signing up new customers in April and moved swiftly to transition existing customers when prices sharply increased. According to him, NOPEC had to negotiate with its supplier, NextEra Energy, and receive board of directors approval before temporarily dropping the customers.
In order to re-enroll customers in June 2023, when NOPEC believes it will be competitive with the utility companies, it plans to send opt-out letters in the spring.
By switching electric customers who are currently using its Standard Program Price option back to the utility default service, NOPEC has announced that it will enable its customers to benefit from the utilities’ currently lower monthly rate. According to NOPEC, approximately 550,000 customers in Ohio can anticipate lower electricity costs through the end of the current year and into the spring of 2019.
Thanks to the Northeast Ohio Public Energy Council (NOPEC), that process is about to become seamless.
NOPEC says customers can click here or call their customer care center at 855-667-3201.
According to Chuck Keiper, Executive Director of NOPEC, “As a consumer-focused non-profit, NOPEC is always operating and advocating for what’s best for our communities and customers.” When we examined the price projections, it became clearer and clearer that the Price to Compare rate would be a better choice for our customers through Winter 2023 in order to save a significant amount of money in these difficult economic times. ”.
According to NOPEC, its electric customers won’t be charged any fees to switch to the lower rates and don’t need to do anything to start receiving them. Electric utilities will be informed by NOPEC to resume providing the default service for their Standard Program Price accounts immediately.
NOPEC Stealing Money From Millions on Electric Bills!
How can I opt out of NOPEC?
You can opt out of NOPEC’s natural gas or electric program by signing, dating, and mailing or faxing the opt-out form found in your enrollment letter to 440. 774. 4422.
Why is NOPEC charging so much?
Many customers were unaware that they had already opted into the program by default. According to NOPEC, rising energy prices are the reason why their electric rates are higher at the moment. The business informs customers that all they need to do is opt out and that they can later return when prices decrease.
Is NOPEC gas or electric?
ABOUT NOPEC The Northeast Ohio Public Energy Council (NOPEC) is the largest nonprofit governmental energy aggregator in Ohio and provides electricity and natural gas to over 1 million residential and small business accounts across 242 communities and 19 counties in the state.
Does NOPEC save you money?
NOPEC saves you money by purchasing electricity and natural gas in large quantities and then passing the savings along to you. Through consumer advocacy, we have helped Ohioans save hundreds of millions of dollars on their energy costs since 2001. We’ve also awarded $40 million in community energy-efficiency grants.