Part Two: An Analysis of Opt-out Aggregation in Massachusetts and Ohio


Excerpt form the executive Summary:

Half of the states in the U.S. have enacted laws to open their energy markets to competition since 1996. Yet, with only a couple of exceptions, these laws brought about the dramatic price reductions and competitive energy markets that many policymakers anticipated. Those exceptions are notable, however, and offer lessons about keeping electricity costs low while bringing the benefits of competition to a large number of small customers. Ohio and Massachusetts -- recently followed by Rhode Island -- enacted laws that allow a process known as optout aggregation. This is a public process that allows a municipality, county or other local branch of government to assemble the electric load of all or a part of the customers within its jurisdiction, and bid that load out to the best bidder. The citizens of the aggregating entity become part of the buying group unless they affirmatively “opt-out” by saying that they do not want to be part of the group. Opt-out aggregation is a low-cost way to pool the buying power of a large number of customers. Part Two of this study examined aggregation programs in Ohio and Massachusetts, which are the two states that have allowed opt-out aggregation and have programs in operation. The two case studies provide data that reflect significant savings and a high participation rate and also provide some conclusions and lessons learned.

Last updated on 08/11/2021