What is Aggregate Energy?

What is Aggregate Energy?

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In what is sometimes referred to as community-driven buying power”, the aggregation of energy allows customers to join together in buying natural gas and/or electricity as a group, which allows them to solicit for the lowest price for the group’s needs. When communities are allowed this right by law, it is called governmental aggregation.

If your community decides to undergo this process or if you move to an area that aggregates energy, there are a few things that you should know.

What is Aggregation?

Aggregation is multiple customers gathering together to create a single, larger customer that buys energy for all of the members.  If the group is large enough, this allows for a better price than any one member could get on their own. Many discounts will only occur if a certain amount of energy is used. Aggregating to reach that threshold reduces cost and becomes more efficient for many groups.

How is the Government Involved?

Beyond the many statues surrounding energy usage and the red tape that can surround it, certain areas have laws that allow for those areas (cities, towns, counties, etc.) to form that larger singularity on behalf of the citizens of that area. They then choose a supplier to provide for all of the members of the group.

Non-Governmental Energy Aggregation

Groups of citizens can also create an energy aggregate in certain situations, often if tenant of a larger building or apartment system that is using aggregate energy. Landlords and landladies who choose to aggregate their property’s energy also have the added benefit of having only one energy company to deal with, which is one less problem.

Businesses can also reap the benefits of aggregate energy. Franchisees of certain regions can buy their energy together. Much like buying a bulk supply of paper or snack mix, buying energy in bulk can save businesses a percentage off of their energy spend.

Opt-in vs. Opt-out Aggregation

Opt-in aggregation requires the participants to sign up individually for the program. Opt-out has an auto-enrollment of all group members, but they can choose to opt out on an individual basis.

Benefits

Often the biggest benefits of aggregating energy is saving money. There may be rare cases when you (as an individual from the group) will not, so research should be done before deciding whether to stay. This most often happens when the group is not large enough to procure vast savings or when there are fees and taxes that add up from the chosen provider.

Do your research and try to understand local laws and legislation before you make your choice, but, when done right, aggregating energy can be a huge money saver for you and your neighbors or associates.

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