In choosing an aggregation, customers must be careful and understand the problems and implications. Several issues must be addressed early on for the customer to get the best deal, such as:
Who else is in the aggregation?
Most customers have load profile or pattern of usage that is not constant. Do the load profiles of other participants in the aggregation compliment that of your organization? If so, the aggregator may be able to get a better price than a collection of similar loads.
Most customers have load profile or pattern of usage that is not constant. Do the load profiles of other participants in the aggregation compliment that of your organization? If so, the aggregator may be able to get a better price than a collection of similar loads.
Are the other participants in the aggregation stable businesses with a
track record of sound financial management?
Every supplier will evaluate the credit risk associated with the pool to be aggregated, a municipal pool is almost guaranteed to have good credit and each organization is likely to remain in existence for many years. Stability and consistency equal good credit. Good credit rating equals a preferential price.
Every supplier will evaluate the credit risk associated with the pool to be aggregated, a municipal pool is almost guaranteed to have good credit and each organization is likely to remain in existence for many years. Stability and consistency equal good credit. Good credit rating equals a preferential price.
At what point in the membership process am I actually committed
to a supply contract?
If the commitment is up front, requiring you to sign an agreement to accept pricing only from one broker or other entity or if the price to be agreed upon is not know, customers should be wary of these options. A sound aggregation is one where each member can choose to accept an offer or reject it. The commitment should only be when all the information is known including price, source, and contract.
If the commitment is up front, requiring you to sign an agreement to accept pricing only from one broker or other entity or if the price to be agreed upon is not know, customers should be wary of these options. A sound aggregation is one where each member can choose to accept an offer or reject it. The commitment should only be when all the information is known including price, source, and contract.
What are the costs to become a member and participate
in a supply offering?
Whatever costs are assessed to members, they must be weighed against the supply offering in order for prospective members to make an informed business decision. In addition to a straight membership fee, there may be ongoing fees throughout the term of the supply contract.
Whatever costs are assessed to members, they must be weighed against the supply offering in order for prospective members to make an informed business decision. In addition to a straight membership fee, there may be ongoing fees throughout the term of the supply contract.
What are the terms under which a business is asked to join an aggregation?
Is there an energy purchase agreement between you and the aggregator? Is there a purchase agreement between the aggregator and the power supplier?
Is there an energy purchase agreement between you and the aggregator? Is there a purchase agreement between the aggregator and the power supplier?
Most importantly, who is running the aggregation?
If people with little or no experience manage the aggregation, your organization may be better off negotiating independently or financing an alternative aggregator. Ask the question: How long has the aggregation been in existence?
If people with little or no experience manage the aggregation, your organization may be better off negotiating independently or financing an alternative aggregator. Ask the question: How long has the aggregation been in existence?
Does the aggregation provide opportunities for member involvement?
It is important that the aggregation allows for ample representation of its participants and opportunities for input from participants. For example, the Maine PowerOptions electricity program uses an institutional advisory committee to help determine what elements of the program are important for their types or organizations. This institutional advisory committee consists of representation from the various member segments (i.e. healthcare, higher education, utilities, local governments, and non-profits).
It is important that the aggregation allows for ample representation of its participants and opportunities for input from participants. For example, the Maine PowerOptions electricity program uses an institutional advisory committee to help determine what elements of the program are important for their types or organizations. This institutional advisory committee consists of representation from the various member segments (i.e. healthcare, higher education, utilities, local governments, and non-profits).