Springdale council OKs renewal of city electric aggregation after consultant outlines savings and safeguards

Springdale — The Springdale City Council voted unanimously May 21 to authorize the city administrator to enter into a master service agreement to continue the city's electric aggregation program, after a detailed presentation from consultant Energy Alliances Inc. and a series of questions about opt-in/opt-out mechanics and protections for seniors.

The council's action, passed 6-0, gives the administrator authority to contract with the electric supplier recommended by Energy Alliances to supply electricity for the city's opt-out aggregation program. Energy Alliances told council it has been pricing supply for the city and urged the city to grant authority so staff can execute a supplier agreement when market prices are favorable.

Why it matters: The aggregation program pools the city's retail electric load to obtain supply prices lower than the default utility rate, producing direct monthly savings for enrolled households. With energy costs rising in recent months, the council's approval aims to lock in a supplier price that would protect residents from higher default utility rates and reduce the risk that unscrupulous third-party marketers will enroll customers into higher-cost plans.

Energy Alliances representative Dan Dieters said the program that began in September 2023 has produced substantial savings for residents and the city. "Any residents in the program, average residents save $275," Dieters said, adding the citywide savings equated to "three quarters of a million dollars." He told council Springdale participants previously paid a supply rate of 6.99 cents per kilowatt-hour; he said the incumbent utility's upcoming month rate would be about 10.45 cents per kilowatt-hour and that aggregation can blunt that increase.

Council members pressed on consumer protections and process. Members asked whether the program could be run as an opt-in rather than an opt-out; Dieters said opt-in models rarely achieve the customer volume needed to secure the lower prices the city has realized, and that the state Public Utilities Commission of Ohio (PUCO) already operates an opt-out default administered by the utility. He said the city's local aggregation simply assumes the supply-purchasing function so council can accept or reject supplier offers on behalf of residents.

Councilors also asked about outreach to seniors and residents who may be confused by billing language. Dieters said Energy Alliances will meet with groups, read bills with residents and assist those who call the consultant's office. He described in-person help at senior centers as a familiar outreach tactic: "If anybody has any questions, I explain the whole thing to them," he said.

City leaders and the consultant also warned residents to guard identifying information on their utility bills, which can be used by unauthorized agents to change a customer's supplier. The consultant said remedies are available and the vendor will help residents who were improperly switched.

The ordinance authorizing the administrator to sign the electric master service agreement passed with an emergency clause. Council discussion emphasized the need to give administration authority to sign quickly because suppliers and markets publish competitive prices on short notice.

The council's vote follows prior voter approval of an opt-out aggregation approach and completes the local legislative step needed before staff and the consultant execute a supplier contract and file necessary documents with PUCO.

Looking ahead: Administration and the consultant will notify residents about any new supplier/rate and will provide opt-out instructions to any customer who chooses not to participate. The city will continue to monitor prices and return to council if there are significant changes or recommendations outside staff authority.