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Municipal aggregation and retail competition in the Ohio energy sector

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  • Littlechild, S.

Abstract

Ohio allows communities to vote to aggregate the loads of individual consumers (unless they opt out) in order to seek a competitive energy supplier. Over 200 communities have voted to do this for electricity. By 2004 residential switching reached 69% in Cleveland territory (95% from municipal aggregation) but by 2006 had fallen to 8%. Savings are now small, but customer acquisition costs are low and the cost to consumers is negligible. Aggregation and retail competition have been thwarted by Rate Stabilization Plans holding incumbent utility prices below cost since 2006. In the Ohio gas sector, rate regulation has not discouraged aggregation and competition, but market prices falling below municipally negotiated rates can be politically embarrassing. How municipal aggregation would fare against individual choice in a market conducive to retail competition is an open question, but the policy deserves consideration elsewhere.

Suggested Citation

  • Littlechild, S., 2007. "Municipal aggregation and retail competition in the Ohio energy sector," Cambridge Working Papers in Economics 0739, Faculty of Economics, University of Cambridge.
  • Handle: RePEc:cam:camdae:0739
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    File URL: http://www.electricitypolicy.org.uk/pubs/wp/eprg0715.pdf
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    References listed on IDEAS

    as
    1. Littlechild, Stephen, 2006. "Competition and contracts in the Nordic residential electricity markets," Utilities Policy, Elsevier, vol. 14(3), pages 135-147, September.
    2. Ridley, Scott, 1995. "Seeing the forest from the trees: Emergence of the competitive franchise," The Electricity Journal, Elsevier, vol. 8(4), pages 39-49, May.
    3. Ridley, Scott, 1997. "Local government: the sleeping giant in electric industry restructuring," The Electricity Journal, Elsevier, vol. 10(9), pages 13-21, November.
    4. Littlechild, Stephen C, 2003. "Wholesale Spot Price Pass-Through," Journal of Regulatory Economics, Springer, vol. 23(1), pages 61-91, January.
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    Cited by:

    1. Stagnaro, Carlo & Amenta, Carlo & Di Croce, Giulia & Lavecchia, Luciano, 2020. "Managing the liberalization of Italy's retail electricity market: A policy proposal☆," Energy Policy, Elsevier, vol. 137(C).
    2. McDaniel, Tanga M. & Groothuis, Peter A., 2012. "Retail competition in electricity supply—Survey results in North Carolina," Energy Policy, Elsevier, vol. 48(C), pages 315-321.
    3. Saskia Lavrijssen & Arturo Carrillo Parra, 2017. "Radical Prosumer Innovations in the Electricity Sector and the Impact on Prosumer Regulation," Sustainability, MDPI, Open Access Journal, vol. 9(7), pages 1-21, July.
    4. Silvia Blasi & Silvia Rita Sedita, 2020. "The diffusion of a policy innovation in the energy sector: evidence from the collective switching case in Europe," Industry and Innovation, Taylor & Francis Journals, vol. 27(6), pages 680-704, June.

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    More about this item

    Keywords

    Municipal aggregation; retail competition; electricity; gas; Ohio; regulation.;
    All these keywords.

    JEL classification:

    • L33 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Comparison of Public and Private Enterprise and Nonprofit Institutions; Privatization; Contracting Out
    • L43 - Industrial Organization - - Antitrust Issues and Policies - - - Legal Monopolies and Regulation or Deregulation
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities
    • L98 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Government Policy

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