Promoting Competitive Electricity markets Through Community Purchasing: The Role of Municipal Aggregation

Of the states that have authorized retail competition, most have seen little shopping by small residential consumers.  Creating a competitive market is more easily said than done.  One promising means of encouraging shopping by small consumers is to establish their right to be represented in the market as a group by their local governments - a process called "municipal aggregation." Municipal aggregation refers to a municipality procuring electric power and related services on behalf of the residents of their community.  Properly structured, aggregation can reduce the cost barriers associated with a small consumer acting alone.

This paper was co-authored with Nancy Rader and funded by the American Public Power Association, discusses best practices in community aggregation and recommends legislative language for its adoption.