Municipal Gas Aggregation

Local Utility:

Dominion East Ohio

Population:

85,000.

Challenge:

How to coordinate an opt-in program with an opt-out program that will start the following year without damaging the buying group's size and bargaining power. Opt-out programs are only allowed to automatically aggregate eligible customers who have not chosen a supplier on their own. Customers joining the initial opt-in program therefore are ineligible to be automatically included in the opt-out program. They must take action to join the opt-out program.

Buying Group Description:

A single community seeking offers for Residential and Commercial customers.

Resolutions:

• This scenario, while not desirable and/or recommended, came about because the regulations were not yet in place to allow for opt-out aggregation. Only Opt-in aggregation programs were allowed at the time.
• The Request for Proposal (RFP) was written to ensure suppliers knew that an opt-out program would follow at the end of a desired 1-year opt-in program.
• The objective was to structure a deal, if possible, with the same supplier for both programs.
• Open enrollment was created during the 3-week time period the opt-out notices were being sent. This allowed customers in the opt-in program to transfer to the opt-out program. Otherwise, they would be renewed as the supplier's customers and not those of the Governmental Aggregator. This would drastically reduce the size of the buying group and lessen their bargaining power with suppliers.
• Press releases at key times helped get the word out and enrollment spiked.

• With natural gas prices high and the winter heating season approaching, the community decided it was best to begin with an opt-in program so that its residents would have a lower-cost alternative to the local utility prices.
• Only suppliers agreeing to bid on the subsequent opt-out program were eligible to bid on the opt-in program.
• To make this a possibility the contract with the winning bidder for the opt-in program contained a provision affording them the "right of last look" for the opt-out program.
• Also wrote into the contract the need for an open enrollment during the 7 summer months so people who missed the earlier opportunity to transfer from the opt-in program to the opt-out program could do so.
• Held public hearings and stressed how the opt-in customers could join the opt-out program.