CLEVELAND, Feb. 14, 2001 (PRNewswire) Officials of the Northeast Ohio Public Energy Council (NOPEC) and Texas-based Green Mountain Energy Co. today signed an initial letter of understanding under which Green Mountain will supply electricity to approximately 450,000 residential customers in nearly 100 Northeast Ohio communities for the next six years.
The understanding, which would be the largest deal for electricity ever made by a public retail aggregation in the United States, was approved by the NOPEC Board of Directors Wednesday morning, following more than a month of intense negotiations. It links the nation’s largest public buying group with the country’s leading provider of environmentally friendly, cleaner energy.
In addition to supplying electricity, Green Mountain has agreed to work with NOPEC to provide natural gas at discounted prices to NOPEC customers. In order for NOPEC to provide this service, the State Legislature is considering legislation authorizing aggregation programs for the purchase of natural gas similar to the one now in place for electricity.
“We are tremendously excited to have reached this understanding and look forward to a lasting partnership with Green Mountain Energy,” said Eastlake Mayor Dan DiLiberto, NOPEC Chairman. “Not only will the contract we hope to sign offer savings to the people we represent, it also would provide them with ‘green’ power, something which many environmentally conscious consumers in other states have been willing to pay a premium for.”
Dennis Kelly, chief executive officer of Green Mountain Energy, who traveled to Cleveland for the signing of the letter of intent, said: “This is a monumental day for the people of Northeast Ohio and for the state’s effort to effectively deregulate its energy market. We look forward to providing the customers represented by NOPEC with cleaner and renewable electricity at affordable prices.
“This decision not only means continued business momentum for Green Mountain Energy, but it also validates the emerging viability of, and mainstream demand for, green power on a mass scale,” Kelly added
Green Mountain Energy in Ohio sources 98% of its electric supply from natural gas-fired plants and 2% from renewable sources such as wind, solar, and geothermal power. The company will designate eight schools one in each county NOPEC represents as recipients of “Solar On Schools” facilities, offering students the opportunity for hands-on study of solar power.
Total savings over the six years of the proposed contract would range from a minimum of $12 million to a maximum of $36 million, depending upon such variables as the availability of low-cost power, known as Market Support Generation (MSG), and the wholesale price of electricity. Individual customers would see a savings of 6 to 8 percent from the amount they were paying for electric generation last year, including the 5 percent reduction in the generation rate mandated by Ohio’s deregulation law. NOPEC consumers are assured to pay less than FirstEnergy’s standard offer for the six years of the proposed contract.
The understanding also calls for Green Mountain Energy to pay any fees charged to consumers for initially switching to Green Mountain Energy. Currently, FirstEnergy plans to charge a $5 per customer switching fee, an amount NOPEC considers exorbitant, unjustified and discriminatory. NOPEC has asked state regulators to eliminate the switching fee. A decision on that request is pending.
Two companies, Green Mountain Energy and AEP Ohio Retail Services, responded to NOPEC’s “Request for Proposals” last month. Negotiations have been underway with both companies since then.
Glenn Krassen, a partner in the law firm of Arter & Hadden LLP, Cleveland, Ohio, and chairman of its national Energy Deregulation Practice Group, utilities expert Scott Ridley, of Massachusetts-based Scott Ridley Associates, and Bess Vrettos of SVA Communications, Inc. made up NOPEC’s negotiation team. The NOPEC Board of Directors chose the Green Mountain Energy proposal in a unanimous vote Wednesday morning.
If a final agreement is reached with Green Mountain Energy, service would begin in September, 2001 for NOPEC customers living in the Ohio Edison service area. The start-up for Cleveland Illuminating Co. customers would be in November.
SOURCE: Northeast Ohio Public Energy Council