Oberlin Municipal Light and Power System’s (OLMPS’s) 2,750 resident and 370 commercial Ohio customers will share about $2.2 million in rebates from the roughly $2.6 million in cumulative profits earned by the utility from the ongoing sale of Renewable Energy Credits (RECs), the local Oberlin News Tribune reported on June 21.
The remaining $400,000 will go into Oberlin’s $1.6 million Sustainable Reserve Fund, eventually to be spent on energy conservation and efficiency initiatives.
RECs have proven to be very profitable for Oberlin. Each REC represents one megawatt-hour (MWH) of energy generated from a renewable source, such as a solar or wind plant. In the case of Oberlin, the city has been selling its RECs – valued at $15/MWH to $17/MWH – to a San Francisco-based company called 3 Degrees.
That company goes on to resell the credits, returning a portion of profits to Oberlin. Meanwhile the city of Oberlin replaces the high-priced RECs it is selling with lower-priced credits (valued at about $2.50/megawatt-hour). In this way, Oberlin makes about $800,000 in profits annually. The only question has been how to spend the money.
City council members approved the 85-15 percent split on June 20, but didn’t say when the rebates would begin.
The utility expects to generate 87 percent of its electricity fossil-free by next year. However, decreasing pollution has meant increased cost. Customers paid an extra $1.8 million between 2012 and 2015 for clean energy rather than coal, OMLPS Director Steve Dupee told the Oberlin News Tribune.
And costs are expected to increase. According to council members, the average residential customer will pay $1,149 next year – up 27 percent from 2013. The rebates are designed to help cushion rate hikes,although residential customers will only receive about $90 annually, with the rebates expiring in three or four years.
Commercial customers will receive the biggest rebates, the news outlet reported. Oberlin College, the utility’s biggest customer, will receive $415,081. The Federal Aviation Administration will come in at second, receiving $181,011.
Proponents of the 85-15 split said customers have been overcharged and deserve the rebate from the nonprofit utility. Opponents said the credit profits are owned collectively by ratepayers and more investment in conservation and efficiency would yield far greater long-term benefits.
