In 2008, a group of six West Texas cities operating in the state's deregulated market tried and failed to use a bulk purchasing strategy in order to lower rates for their constituents. The strategy, known as opt-in aggregation, is explicitly authorized by Senate Bill 7, the deregulation law for this state.
However, as the cities of Cisco, Comanche, Dublin, Eastland, Hamilton and Snyder discovered in 2008, the aggregation provision in the law doesn't work particular well in practice.
The cities managed to sign up 1,600 households during an extensive outreach program and then attempted to negotiate a bulk rate power deal on their behalf. But citing the relatively small number of customers, the REPs either decided not to participate or would not offer prices lower than those already advertised on Power To Choose.
Organizers of this effort concluded that they would have been more successful using another bulk rate purchasing strategy, known as opt-out aggregation. However, opt-out aggregation is not permitted under Senate Bill 7.
Source for these facts is CAPP, Cities Aggregation Power Project,Inc.
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