[Editor’s note: This article has been clarified to better reflect how residents vote to begin using an energy aggregator like NOPEC.]
(WJW) — Just a few months ago, the electricity bill for Melissa Malicki’s three-bedroom, 900-square-foot Strongsville apartment was a little more than $100 — not “that bad,” she said.
But over the last three months, it’s climbed to more than double that amount.
She also began noticing what she first thought was an extra charge for “NOPEC,” she told FOX 8. That’s the Northeast Ohio Public Energy Council, the nonprofit Ohio energy aggregator that buys and supplies the electricity used by her and a million other customers in Strongsville and across the state.
Right now, most of its customers are being charged 12 cents per kilowatt-hour, up from the comparative rate of about 6 cents per kilowatt-hour from Malicki’s electricity provider, The Illuminating Company, which is part of FirstEnergy Corp.
“Why in the world would anybody want to go with NOPEC?” Malicki told FOX 8. “I don’t know who it’s saving money — because it’s not saving me any money.”
Since aggregators like NOPEC buy in bulk from energy providers for a wide customer base, that extra buying power often translates to cheaper rates and other benefits.
But not right now.
Several northeast Ohio cities — many of whose residents voted to join NOPEC at some point in the past for better deals on utilities — are now encouraging their residents to “opt out” of NOPEC’s electricity aggregation, at least for now, since its rate has become much higher than residents’ default providers.
Why are electricity rates so high?
There are a number of reasons why prices have skyrocketed, said NOPEC spokesperson Dave Jankowski, but they all come down to supply and demand: There’s the continuing war in Ukraine; a hotter-than-usual summer, causing residents to crank their air conditioners; and ongoing supply chain instability caused by the COVID-19 pandemic.
It’s the same kind of inflation consumers are seeing in the grocery store and at the gas pump, he said.
“It’s tied very closely to the start of the war in Ukraine. That’s when prices spiked and we saw a lot of the inflationary factors,” Jankowski said. “The global markets went crazy over threats of [Russia] shutting off natural gas to the rest of Europe. That’s really when the prices started to shoot up.”
Russia is a major global supplier of natural gas — though not for the U.S. While that uncertainty isn’t directly affecting U.S. customers, they can still feel its impact on the world’s energy market, he said.
“It is rocking the boat, definitely,” Jankowski said.
The 6.8-cent rate from FirstEnergy seen on NOPEC customers’ bills is called the “Price to Compare.” That’s the rate FirstEnergy got when it bought its electricity supply wholesale at auction. Customers can use the Price to Compare to see if they’re paying more than they could be for their utility service.
But that rate can sometimes be misleading, Jankowski said. FirstEnergy secured that rate in early spring — when the Russia-Ukraine war had just begun, and energy prices were still low — and it’s not a good representation of the market right now, he said.
FirstEnergy buys portions of the available energy over three years, according to a pre-determined timeline. Theirs was purchased before inflation hit. NOPEC, however, buys on a much shorter timeframe in order to be more flexible.
“Traditionally, NOPEC tries to smooth out the curves so you don’t get wild swings month-to-month,” Jankowski said. “Under the current market volatility, it’s been very difficult to do that.”
What is NOPEC? How customers get enrolled
NOPEC is Ohio’s largest nonprofit energy aggregator and serves about 240 communities in 19 Ohio counties, about three dozen of which are around Greater Cleveland. If you live in the FOX 8 viewing area, there’s a good chance you’re in one of them.
Energy aggregators like NOPEC were formed after the state deregulated the market in 2001, allowing consumers to choose their energy providers and find the best rates.
Since NOPEC buys in bulk for many customers, its option is often cheaper than buying from a local utility. In less-volatile times, Jankowski said NOPEC’s rates have been “consistently in line with or below both retail market and the utilities’ rates.” There also aren’t any additional fees for its member communities or consumers, he said.
In those areas, residents decide at the ballot box whether their community should begin using an aggregator for electricity, natural gas or both. Then officials decide which aggregator to use, like NOPEC. After that happens, if utility users there don’t actively seek out their own provider, they’ll end up with NOPEC and begin paying its standard rate, which is now 12 cents.
NOPEC is an “opt-out” aggregator, so customers in its communities are automatically enrolled. But they have a 21-day window to opt out and choose their own provider before joining. They can also drop out or rejoin later at any time without penalty.
Malicki, a 32-year-old Cleveland Clinic lab technician, said she moved into her Strongsville apartment eight months ago. Since her electricity meter is tied to her address, she was automatically opted into NOPEC — but she said she had no idea.
NOPEC mails two letters to new customers about the change that include a card to send back and opt out, Jankowski said, but Malicki said she never got them. She pays her Illuminating Company bill online.
“I live in an apartment building with over 200 residents — 9 times out of 10 I don’t even get my own mail,” she said.
Though Malicki said she feels that’s unfair, Jankowski said snail-mailing opt-out letters is a requirement from state regulators. NOPEC isn’t allowed to send digital notifications.
As for those two electric bill charges Malicki is seeing: Her charge for NOPEC is for the electricity supply she used during the billing period; her other, lesser charge from The Illuminating Company is the transmission fee. Though she pays NOPEC for the energy, FirstEnergy still controls the lines that bring it to her apartment.
Because of those two fees, callers often question whether NOPEC is a scam, Jankowski said.
NOPEC still mails letters every other month to new movers and consumers whose retail natural gas contracts have expired. But since electricity rates became super-charged, NOPEC has stopped enrolling new electric customers altogether, Jankowski said.
How to opt out of NOPEC
The easiest way to opt out of NOPEC is by calling 855-NOPEC-01 (855-667-3201).
Tim DeGeeter, mayor of Parma, told FOX 8 he did it himself to get a cheaper bill, and that the whole process took less than 15 minutes.
Parma had an average of more than 22,000 residential electric customers when it joined NOPEC in 2021. The city’s prior energy aggregation program saved them about $1 million in 2019, according to the city.
But this summer has seen the most volatility in the energy marketplace since DeGeeter became mayor 10 years ago, he said. The city wanted to be “proactive,” he said, and pushed a notice earlier this month advising residents to drop out and rejoin “when the markets normalize.”
DeGeeter said Parma’s natural gas customers are still getting a good deal, however, so residents are still recommended to keep NOPEC for natural gas.
Another way to opt out is to sign and return the mailed letter. And no — there’s no way to opt out online, Jankowski said. Here’s a list of other frequently asked questions about opting out of NOPEC.
Opting out of NOPEC doesn’t take effect immediately. When Malicki did it, she was told it would take at least a couple of billing cycles before her bill changed. That’s out of NOPEC’s hands, said Jankowski. The aggregator doesn’t “control the billing” — rather, billing cycles depend on how utility providers process those changes, he said.
After opting out of NOPEC, Cleveland-area electric consumers will go back to FirstEnergy, with its standard rate of about 6.8 cents per kilowatt-hour. But they can also shop around for a better price using the state’s Apples to Apples tool, which compares electricity and natural gas providers’ current rates and contract terms.
NOPEC also offers fixed-rate pricing for 12 or 24 months, bringing the standard 12-cent rate for its auto-enrolled customers down to about 9 cents, Jankowski said.
Officials are waiting for the results of next spring’s electricity auction to see if NOPEC will become a good deal again “and advise residents on whether or not to switch back,” DeGeeter said.
Jankowski said he expects prices for natural gas to stay high while the Russia-Ukraine war continues. Since that commodity is so closely tied to electricity — 38% of domestic electricity generated in 2021 came from natural gas-fired coal plants — those buyers should expect the same.
Unusually hot summers and cold winters also increase demand, which impacts prices, Jankowski said. The FOX 8 viewing area’s had 13 days with temperatures above 90 degrees, according to FOX 8’s weather team — which, so far, is normal for the year. And local folklore suggests the coming winter will also be extreme.
So is there any sense of when utility rate relief might come?
“They’re all impacted by domestic and global supply issues, so it’s really hard to say,” he said.