ABACCUS: Municipal Aggregation Risks Becoming "End Point," Stifling Choice

The 2015 Annual Baseline Assessment of Choice in Canada and the United States (ABACCUS) was released yesterday and the accompanying report concludes that municipal aggregation risks becoming an "end point" which stifles a fully competitive market

While the report notes, "[p]eople readily understand the concept of 'buying groups,' and municipal aggregation is an effective way for consumers to quickly obtain reductions in power costs," the report cautions against municipal aggregation as an end point

"Municipal aggregation risks becoming an end point in electric market transformation -- effectively giving up on choice before it has a chance to develop -- and stifling a fully competitive market," the report notes.

"Municipal aggregation does not, however, promote individual choice of electric provider, differentiation of retail services and products, innovation, or technological change at the small consumer or retail level. Opt-out municipal aggregation tends to maintain the status quo with respect to individual consumer awareness, education and choice. That is, municipal aggregation does not require consumers to increase their education and make individual choices," the report notes

The report observes that in order to raise awareness and encourage customer action, an opt-in design to municipal aggregation is required.

The ABACCUS report is authored by the Distributed Energy Financial Group LLC (DEFG)