After Perry Mitchell formed Consumers for Alternative Power, a local residential group looking to aggregate their electric usage to negotiate for a better price, he expected the word to travel quickly.
Once that word got out, he said, he expected hundreds of people to sign up for the group and perhaps save money on skyrocketing energy costs. But there’s a problem.
Richard Anderson, a principal in CQI Associates, a Maryland-based energy consulting firm, said that about 10,000 residential customers would have to join the group to get a supplier’s attention.
“I’m out there trying to talk to suppliers. That’s fairly uniform,” Anderson said. “You’ve got to get a pretty hefty number even to get somebody to be interested.”
CQI works as an aggregator for commercial electric cooperatives and is now looking to reach out to residential co-ops in Maryland. And Patrick Lavigne, a spokesman for the National Rural Electric Cooperative Association, agreed with Anderson’s assessment.
“I can’t imagine an aggregated group of 150 residential (customers) would be able to negotiate a significant drop in the rate based on what they’re going to have to do,” Lavigne said.
According to Lavigne, what they’re going to have to do is form a non-profit organization with which supply companies are willing to negotiate, obtain an energy market analyst who knows when to accept bids for supply, and hire an attorney to continually examine the supply contract.
Or, he said, they can work with a willing aggregator, such as CQI Associates, who will perform all of those services for the group. Both of those options, however, are expensive ones. Bruce Burkat, the executive director for the Delaware Public Service Commission, said he doesn’t know of any residential groups in the state who have aggregated their supply and negotiated a lower price.
“There are a lot of engineering and market questions that need to be answered,” Lavigne said. “It is not a cheap or easy proposition. It takes a lot of professional consultation. It takes a lot of lawyers.”
Perry Mitchell started to solicit members for the group last month before Delmarva Power’s rates rose an average of 59 percent for residential customers on May 1.
Government and commercial cooperative efforts have also stemmed from the rising prices, which have risen by as much as 117 percent for some large businesses.
“We wanted to go out and set a rate that is more favorable,” Mitchell said, “So we founded this group to aggregate our kilowatt demand.”
Anyone interested in joining Mitchell’s group and exploring the option should e-mail the Bethany Beach resident at pmitchell@mchsi.com. Membership in the group requires an e-mail address for communication purposes.
Washington Gas Energy Services (WGES), a Maryland-based supply company, announced another option for residential Delmarva Power customers last month. Delmarva Power residential customers who switch to WGES can save an average of $85 in the coming year on energy prices, according to WGES, and work with a company that uses renewable energy sources. Wind power accounts for 5 percent of the company’s supply, according to its Web site at www.wges.com. Visit that site for more information.
WGES is the first competitor for Delmarva Power to enter the state of Delaware since deregulation, which was supposed to promote competition, in 1999. Since 1999, fossil fuel prices have skyrocketed — natural gas prices have risen by about 400 percent — causing high supply contracts. Delmarva Power accepted bids for all of its supply this year and signed one- to three-year fixed-price contracts in the midst of an expensive market.