The District’s scheme to reduce residents’ electricity bills through a competitive auction is teetering on failure due to a lack of interest or a lack of awareness.
The idea behind D.C.’s Municipal Aggregation Program was to amass the buying power of as many residents as possible, solicit bids from alternative energy suppliers and secure cheaper electricity rates than those offered by default provider Pepco.
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But fewer than 600 residents and small businesses signed up with the D.C. Department of the Environment by the Aug. 1 deadline, city officials said, thousands fewer than the government had hoped for. The District will solicit bids nevertheless, though expectations of beating Pepco prices are low.
“We have a shot at it,” said George Hawkins, director of the Environment Department. “But it’s not big enough that it’s definitely going to happen.”
Five D.C. government agencies participated in an energy auction in 2006. The resulting $134 million, 36-month contract with power provider Hess Corp. saved the city $10 million a year over what it would have paid Pepco.
The District hoped to do the same with residents, but it needed a “critical mass” of participants to succeed. Critics say the residential program cannot work if the District continues to have people to opt in, rather than opt out.
“It’s just inconceivable to me that that type of program hasn’t been extended to D.C. residents,” said Nancy MacWood, chairwoman of the Cleveland Park Advisory Neighborhood Commission and proponent of an opt-out policy.
D.C. might be headed down the opt-out road, Hawkins said, forcibly cutting the ties between residents and Pepco unless the resident chooses otherwise. In other words, all D.C. residents would participate in the auction unless they choose not to.
“We’re very interested in exploring it,” Hawkins said. “The pros are significant enough.”
Pepco strongly opposes an opt-out program, spokesman Bob Dobkin said.
“If they’re doing it that way, that would eliminate customer choice,” said Pepco spokesman Bob Dobkin. “We’re in favor of competition and support it as long as customers retain the ability to make a choice.”
Hawkins’ department needed to do a better job of advertising the auction program, said Ward 3 D.C. Councilwoman Mary Cheh, who has oversight of utility matters. An opt-out system, however, is “something that I’m actively considering.”
