The power of buying groups

There’s power in numbers, and buying groups could help business owners save even more money on electricity when deregulation goes into effect in Ohio.

Groups can’t be formed until the deregulation bill takes force on Jan. 1, but once it does, business owners, as well as individuals, can form them and use the bargaining power of their members to garner more favorable rates for electricity.

Matt Motley, public information officer with the Ohio Public Utilities Commission, says that as of now, there are no restrictions on who can form a buying group, from the American Association of Retired Person to the local Kiwanis club to cities and counties.

In Northeast Ohio, the Northeast Ohio Mayors Legislative Action Group is testing the waters in cities in a six-county area to see if there is interest in forming a group. Interested cities would put the question on the November ballot, and those which approve the measure would together solicit bids from electricity providers to service every residence and business within that area.

Those within the buying group’s area who wish to join another buying group, or purchase their electricity from another source, will be able to opt out.

Business owners have the same option of joining together to seek a better rate. All the businesses in an area could form a group, as could those in a certain sector of business, such as the members of the Ohio Grocers Association.

Tom Jackson, president and CEO of that organization, says that its 900 members use a lot of electricity to keep their grocery stores going. The Ohio Grocers Association has selected an aggregator and is now in the process of surveying its members on their energy use.

“We need to obtain information in order to determine what size block of energy we’ll be able to buy,” Jackson says. The buying block will make electricity available to members “cheaper than they could buy themselves.”

Jackson says he doesn’t see a great savings in the first five years of the program because of associated costs during a five-year transition period, but starting in 2006, “it will be progressively better. It will be a tremendous benefit to our members.”