We are asked about community aggregation discounts from time to time, and how our rates compare to those?  After all, isn't it better to shop as a group than just 1 individual?  My very quick answer is in most cases, NO.  You would have to be in a group of well over 100,000 homes to get a tiny benefit.  Here's why:

Most retail electricity providers buy the power they sell you from wholesale power providers.  In my role as a wholesale power trader at JPMorgan, I used to sell power to these retail providers on a daily basis.  At the time, JPMorgan was one of the leading wholesale power traders in the country and we saw a lot of deals and traded a lot of volume.  As a market maker, in order for me to give a volume discount and offer a lower price to retail providers, they would have needed to buy power for the equivalent of at least 100,000 homes.  And even then, the discount would have been minuscule.  A noticeable discount would have required them to buy power for more than 300,000 homes or more. 

Perversely, buying power in extra large blocks would actually INCREASE the price because it means the market maker has warehouse the risk longer and take the price risk.  

So, in the case of companies trying to sell you a discounted rate claiming advantages of aggregation, they are most likely just using it as sales tool to make you think you are getting a better deal than you really are. 

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