By Mike Boyer
The Cincinnati Enquirer
Residents of Indian Hill soon will become the first consumers in Cinergy Corp.'s service area to band together to reap the benefits of electric deregulation.
Indian Hill consumers will see their annual electricity costs drop an estimated 9 percent by forming a buying pool, which lets residents combine their purchasing power to get lower rates from companies competing for their business.
It's a move that some observers hope other Tristate communities will follow, spreading more benefits of deregulation to Southwest Ohio consumers.
With the power pool, an average Indian Hill resident will save $183 on an annual electric bill, says Donald Marshall, president of Eagle Energy, the energy consulting firm assisting the village.
Indian Hill plans public hearings next week on its power pooling plan, which is a requirement for the plan to be accepted by state officials. A May 8 session is scheduled at 7:30 p.m., and a May 9 session is at 3 p.m. Both meetings will be in the village hall, 6525 Drake Road.
The pool is possible because Ohio deregulated the state's $11 billion electric power industry two years ago. The law included a 5 percent across-the-board rate cut, allowed independent providers to seek customers and permitted consumers to form buying pools.
Under that "electric choice" law, Cinergy continues to deliver electricity to customers' homes and provide billing and service. But the power itself is supplied to Cinergy's network by an independent supplier that contracts with a municipality.
The combination of Cinergy's low electric rates and official uncertainty slowed the formation of municipal buying pools - what the utility industry calls "aggregation" - in this area.
"Nobody wants to be first,'' Marshall said.
The pools are much more common in northern Ohio, where electricity costs are much higher. About 90 percent of the more than 800,000 Ohio consumers who have switched suppliers since the advent of the choice law have done so through community buying pools, state officials say.
The Indian Hill plan was authorized by a May 2001 city vote. But Mike Burns, Indian Hill manager, said the city, which has about 2,150 residences, didn't act until now "because the market hadn't developed."
"Cinergy's rates are pretty good, and there weren't any suppliers rushing in" to provide power, he said.
Dominion Energy, which has about 14,000 customers here via direct-mail offers to Cinergy's Southwest Ohio customers, will provide power to Indian Hill starting in July.
But Marshall hopes Indian Hill's move to aggregation might spur interest from other municipalities. His company will present an overview of how power pools work at a meeting of the Hamilton County Township Administrators May 8.
The Warren County city of Franklin is the only other community in Cinergy's service area where voters have authorized aggregation, but Franklin officials haven't moved forward to form a power pool.
The deregulation law provides shopping credits to encourage the first 20 percent of each Cinergy customer class - residential, commercial and industrial - to switch to independent suppliers.
But until now, Marshall said most of the effort by Cinergy competitors has been to attract commercial and industrial customers, which buy in larger volumes and are less costly to attract.
More than 20 percent of Cinergy's commercial and industrial classes have switched to alternative suppliers, so the potential competitors now are looking to get residential customers. "The market's changed,'' Marshall said.
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