Delaware takes step toward municipal aggregation

muniResidents and small businesses in Delaware just may see a drop in electricity prices, if one lawmaker gets his way.

Sen. Colin Bonini, R-Dover South, authored a proposal to order an electricity aggregation study, which would include best practices from other states already undertaking municipal aggregations and would gauge the local pulse for municipal aggregation feasibility.

For those wondering just what a municipal aggregation is, it’s a group of residents and/or businesses that form an energy-purchasing group, typically led by a local government entity. By joining together to buy power, municipal aggregations can save participants money on their electricity bills.

In Delaware, the state government would shop for power, buying in bulk for the 260,000 residents and small businesses that use Delmarva Power. The buying block could be as large as 900 MW annually – big enough to potentially attract a lot of competition for the aggregation. There are 49 licensed retail electric providers operating in the state.

While Delaware deregulated its energy industry in 1999, only about 10 percent of consumers receiving Delmarva’s standard offer service have taken advantage and shopped for energy supply.

Delaware has already dipped a toe in the aggregation waters, buying power for state government and some organizations. According to the state Office of Management and Budget, Delaware has seen “good results” from that decision. Other state governments using a pool system include California, Illinois, Massachusetts, New Jersey and Rhode Island.

Looking to municipal aggregation may be a smart move for Delaware. As Sen. Bonini said to a local newspaper, “My thinking is, we should take a look at it and if it looks like a good solution, we should do it. If we can save even a small percentage on everybody’s electric bill, that creates real money in the economy.”

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