Here's how to save money on your electric and natural gas bills.Illustration by David Lafata, Advance Local
CLEVELAND, Ohio — NOPEC’s plan to cut utility bills for 550,000 electric customers by moving them to their utility’s standard service offer is being challenged by an energy supplier who would have to pick up the increased load.
Wholesale electricity supplier Dynegy is asking the Public Utilities Commission of Ohio to stop NOPEC from shedding its customers and to investigate NOPEC’s choice to do so. The company said NOPEC’s plans could have a “significant and potentially devastating impact” on Ohio’s electricity market.
Otherwise, Dynegy would need to ramp up its services to fill former NOPEC customers’ needs. This is because Dynegy sells FirstEnergy the power sent to customers on the default option — often called the standard service option or the “price to compare.”
Dynegy is responsible for 32% of the power sent to customers on FirstEnergy’s standard service offer.
NOPEC wants to make the switch because most of its customers were paying 12 cents a kilowatt-hour, while the utility default rate was between 6.7 and 6.8 cents in FirstEnergy territories.
A sudden shift of 550,000 customers, however, isn’t something Dynegy and other suppliers prepared for when those prices were set.
PUCO has not heard the case yet. NOPEC spokesperson Dave Jankowski said the aggregator doesn’t comment on active legal matters. But it is continuing to transition customers to the standard service offer based on where they live.
The complaint complicates an already confusing system when it comes to utilities and suppliers in Ohio.
People are billed by their utility – say FirstEnergy’s Illuminating Co. or Ohio Edison – for delivery of the electricity. But included on the same bill is a separate charge for the electricity provided by another company. Customers’ end up with NOPEC or the standard service offer if they don’t take action and pick their own supplier.
If Dynegy’s motion is successful, it could cost NOPEC customers money in the short term. But Dynegy spokesperson Meranda Cohn said NOPEC’s action will hurt all customers in the long run.
“NOPEC touted in its announcement that this action would mean customers would “soon start saving money on their electric bills,” when in fact most of NOPEC’s customers have been overpaying for their electricity since at least December 2021, and while the proposed drop may provide short-term savings, Ohio’s electricity market and its customers would suffer in the long run,” Cohn said in a statement.
Everything was set into motion Aug. 24 when NOPEC said it would temporarily drop about 97.5% of its electricity customers and pick them back up in spring 2023, something it had never done before.
Dynegy filed several motions with the PUCO to try and stop this from happening. This, according to the documents filed, is why Dynegy wants PUCO to intervene.
NOPEC shedding close to 550,000 customers will shift that load to the utility’s standard service offer, which means suppliers like Dynegy will need to produce or buy more energy than expected.
Utilities, like FirstEnergy, hold auctions with bids coming from companies such as Dynegy. Historical data is often used in determining bids. So, an unprecedented move from NOPEC is something they couldn’t prepare for, Dynegy argued in the motion.
Dynegy argues that NOPEC’s action will “destabilize the competitive market” by switching a massive amount of customers. Dynegy said it and other companies will need to shop on the open market to meet demand.
Companies also won’t know what to expect during the next slate of auctions, and uncertainty means higher bids, which Dynegy argues will harm customers in the long term.
Dynegy is also asking why now? Dynegy said NOPEC’s electricity rates have been higher than the utility default since December. It wants PUCO to investigate why NOPEC made the decision in August and not sooner.
The bulk of the energy Dynegy supplies to FirstEnergy come from six Ohio-based power plants, Cohn said. Though an increased load will mean buying more electricity from third parties. The plants and Dynegy are all owned by the parent company Vistra, an electricity generation company headquartered in Texas.
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