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Council authorizes one-year electric aggregation agreement as transmission costs push rates higher
Summary
Mayor and Director of Public Service said transmission and capacity costs are driving electricity rates up; council approved a one-year aggregation agreement that keeps the current 4.96¢ rate through May and moves to an 8.63¢ rate beginning in June if implemented.
Tallmadge City Council on Feb. 13 authorized a master service agreement for electric aggregation with Dinergy Energy Services East LLC after hearing an explanation from the director of public service that energy transmission and capacity charges rather than generation are the primary drivers of an expected rate increase.
What council heard
Director of Public Service Mike Rohrer described the aggregation deal as “not good” but the best available option at present. He said the city’s current blended rate is 4.96¢ per kilowatt-hour through May; for a one-year term beginning in June the best available rate presented was 8.63¢ per kilowatt-hour. He noted that regional utility transmission charges are rising (citing Ohio Edison moving to 10.4¢) and that waiting longer could increase the rate further. Rohrer said residents remain free to opt out and find individual suppliers.
Council action and implications
Council voted 6-0 to approve the master service agreement authorization. The ordinance authorizes the mayor and director of public service to enter into the aggregation agreement; it was described as a one-year arrangement intended to avoid a potentially higher price if the city delayed.
Why it matters
Electric aggregation affects residential and municipal electricity costs. The director’s presentation emphasized that capacity and transmission charges were the main contributors to the price increase rather than generation costs, and that market volatility means the longer the city waits the greater the risk of higher prices.
Ending
The ordinance passed with a recorded 6-0 vote; staff said the arrangement is intended to be temporary while the market stabilizes.
