Walt D from Pittsburgh, PA. Duquesne Light delivery territory. Working with a client who owns 12 small retail stores across the Pittsburgh metro area. Each store uses about 15,000 kWh/month — too small individually to attract competitive REP quotes. Most REPs will not bother with accounts under 50,000 kWh/month because the margin is not worth the paperwork. But aggregated, these 12 stores represent 180,000 kWh/month which puts them in a different tier. I am exploring whether we can aggregate the accounts under a single supply contract to get a better rate.
Aggregating small accounts to qualify for a better supply rate
Walt, account aggregation is one of the most underutilized strategies in deregulated markets. PJM rules allow multiple accounts owned by the same entity to be aggregated for supply purchasing. The aggregated load gets better pricing because the REP can manage it as a single portfolio. Some states also allow aggregation of accounts owned by different entities through municipal aggregation programs. What is the rate difference you are seeing between individual and aggregated quotes?
Randy, individual account quotes are coming in at $0.078-0.082/kWh. Aggregated quotes for the 12-account portfolio are $0.068-0.071/kWh. That $0.010/kWh difference on 180,000 kWh/month is $1,800/month or $21,600/year. The aggregation does not cost anything extra — the REP just treats the accounts as a single block for pricing and bills each account separately at the aggregated rate.
Walt, in Illinois we have been doing municipal aggregation for years through the ComEd territory. The key is making sure ALL accounts in the aggregation are on the same utility delivery territory and the same customer class. If any of the 12 stores are on Duquesne and others are on West Penn Power, you cannot aggregate across utility boundaries in PJM.
Yuri, all 12 are in Duquesne Light territory so that is not an issue. One question I have: does the aggregation affect the PLC tag calculation? If the coincident peaks of 12 small accounts are combined, the diversified peak of the portfolio should be lower than the sum of individual peaks because they are unlikely to all peak at the exact same time.
Walt, in PJM the PLC tags are calculated at the individual meter level and then summed for the aggregation. You do not get a diversity benefit on the PLC through aggregation alone. However, some REPs will offer a lower capacity pass-through on aggregated accounts because they can manage the portfolio more efficiently. Ask the REPs specifically about their capacity pricing for aggregated vs individual accounts.
Tony, thanks for clarifying the PLC point. The winning REP bid at $0.071/kWh all-in includes capacity. They confirmed the aggregated price reflects a portfolio management benefit even though the PLCs are calculated individually. Client signed the 24-month aggregated contract. Annual savings vs individual default service rates: $21,600. My contingency fee on the first-year savings: $10,800. And all I did was pick up the phone and get quotes — no billing errors to dispute, no tariff analysis. Pure market optimization.
$21,600 in annual savings through aggregation with zero dispute work. Walt, this is an important reminder that auditing is not just about finding errors. Rate optimization, contract negotiation, and market strategy are all value-adding services we can provide in deregulated markets. The audit finds errors. The optimization finds savings. Both matter.