Auction Sets Utility Prices Through May 2021
The Public Utilities Commission of Ohio (PUCO) has officially accepted results of FirstEnergy utilities auction of electricity service supplies. CRA International managed the auction and PUCO hired aconsultant who monitored the The competitive bidding process. The auction produced four successful bidders with the best electric prices for 2-year and 3-year product auctions. Bids affect the price of FirstEnergy owned utilities’ electric services through May 2021. Find PUCO’s media release regarding the auction here.
Why do Ohio’s local utilities use auctions?
Ohio’s local utilities must secure their entire anticipated electric load through competitive wholesale auctions. Auction prices determine generation rates. Utilities pass these prices directly to the consumer. FirstEnergy owned utilities include Ohio Edison serving Akron, Illuminating Company serving Cleveland, and Toledo Edison serving Toledo.
The most recent FirstEnergy utilities auction set a price for about 17% of its energy and capacity obligations. The auction directly affects pricing for customers who choose their local utility’s standard service offer (SSO). The auctions do not take into account electric demands for customers under the Percentage of Income Payment Plan or customers who compare electric rates and chose and a retail electric plan.
How will the auction prices affect my electricity rate?
If your local utility is your electricity provider, you will likely a rate change sooner. The FirstEnergy utilities auction resulted in winning bids averaging over $49.00 per MWh for the next two to three years. This is a slight increase in energy price from the previous auction in October 2018, but down from the January 2018 auction. For now, the auction results only cover 17% of the energy demand of SSO customers. This makes it difficult to predict how electric bills might change. However, the price you ultimately see on your FirstEnergy utility bill is determined by many factors which include pricing established by past and future auctions.
Meanwhile, retail customers who compare electric rates apples to apples, won’t see rates change as quickly. The auction process benefits all consumers by driving competition between energy suppliers, keeping Ohio electric rates cheap. Consequently, while the auctions help maintain low electric rates by making energy procurement open and public, competitive energy suppliers must try to beat SSO rates with even cheaper rates or other incentives.
Because distribution and delivery rate charges are set by PUCO-approved tariffs for each local utility, they are not affected by auctions. All Ohio electricity customers must pay distribution and delivery charges to their local utility.
What options do Ohio electric consumers have to save on electric rates?
Ohio’s deregulated energy market depends on customers having a choice in energy providers. To make the most of your choice and to lower your electric bill, it’s crucial that you compare electric rates available in your area regularly.
Ohio Energy Ratings makes it easy for customers to compare electric rates apples-to-apples. Just enter your zip code on our site to see a range of plans available in your area. Ohio Energy Ratings organizes all electric plan information on one site, making shopping for the best supplier is even easier.
Shop cheap electric rates and start saving today: https://www.ohenergyratings.com/electricity-rates.