Your electric bill could skyrocket soon. City, AEP Energy must come clean|Opinion
NOTE FROM OPINION EDITOR AMELIA ROBINSON: This column was submitted to the Dispatch May 13, 2022. The Clean Energy Columbus program disclosed its rate for the second year of the program on May 17. The column appeared on this website two days later due to an error. Rates can be found at cleanenergycolumbus.org/rate.
In the November 2020 election, City of Columbus residents voted overwhelmingly to approve Columbus Issue 1, electric service aggregation.
In public meetings and dialogue, the principal architects of this program agreed to timely public disclosure of information. They are falling short of that key promise.
More: Columbus voters approve green-energy aggregation plan
We are just over a week away from the date at which new electricity rates kick in, which occurs on June 1. Neither the city nor its aggregation supplier (AEP Energy), are “releasing that information at this time.”
Customers who did not manually opt out of the aggregation are essentially on a variable rate that will change on June 1. Prompt and timely public disclosure of that rate is essential to market efficiency.
Customers need to know what that rate will be so that they have time to find an alternative supplier, or shift back onto the standard service offer with AEP Ohio.
(Note that AEP Ohio is a regulated distribution utility that is corporately distinct from AEP Energy, which is the supplier for Columbus’ aggregation deal.)
This is important because electricity prices are skyrocketing.
On May 12, I watched wholesale prices on our power grid clear in the triple digits. By 2 p.m., prices in our interconnection were clearing at nearly $350/megawatt hour.
To put that into perspective, that is about $100 higher than the price cap enforced by the California grid operator during the Enron blackouts.
More: Columbus green-power aggregation currently more expensive, but maybe not for long
The auctions that set the standard service offer rates are ultimately based on the wholesale price. The most recent March competitive bidding price auction, which sets the standard service offer rate in the AEP Ohio territory, cleared above $69.
Two years ago, they were clearing in the low $40s and mid $30s. And if you have friends over in Dayton, their auctions just cleared last month at $122.
While all of this sounds technical — and it is — what residents really need to know is that residential retail prices are going up — a lot.
The city’s failure to provide timely disclosure of rates in this environment is inexcusable. They know what the cost of their solar generation will be. They are waiting to set their rates based on public release of the standard service offer rate — which has also not been released.
More: AEP pressed Columbus to drop electricity aggregation in 2014, ex-committee chair says
And they know that the average customer does not have the technical capacity to translate the auction price and tranche value into a comparable residential rate, nor how to find the auction price online.
The city should follow through on its promise for timely disclosure. They should be reminded that they were elected to represent Columbus residents — not shareholders. They committed to disclosure; now let them open their books so families can make informed choices.
Noah Dormady, Ph.D., is an associate professor of public policy at The John Glenn College of Public Affairs at The Ohio State University. He specializes in energy markets, risk and decision analysis, and critical infrastructure.
This article originally appeared on The Columbus Dispatch: Opinion: Are electricity bills rising for AEP customers on June 1?
