Thursday, October 8, 2009

A Bright Idea in Response to First Energy's "Free" Bulbs

I received this message today from attorney Terry Lodge in Toledo with the article at the end of this posting.

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PUCO allowed FirstEnergy to charge users $21.60 for 2 CFL bulbs!

But thanks to Kucinich's intervention and a lot of pissed off electricity customers, the PUCO is trying to cover its ass and has suspended the program.

FirstEnergy is selling the bulbs at a profit, if you konw what CFLs sell for at the big-boxes, AND ALSO gets to charge consumers for kilowatts they will not be able to sell once you start using compact flourescents. A great example of captive regulators caving to utilities too big to regulate. And so the "love story" continues.....

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Terry is absolutely right. Not only is this a “great example of captive regulators caving to utilities too big to regulate,” but is also a great example of two other realities:

1. People voicing their opposition in large numbers — demonstrating that people power on this issue has more juice than the electrical power corporation.

2. The fundamental flawed economic model of private utility monopolies. Corporate utilities need to charge their captive customers for unused kilowatts saved from energy conservation to satisfy their Wall Street investors. By contrast, a publicly-owned utility doesn’t have to pay out dividends because the “owner” is the municipality or, in the case of electrical cooperatives which number 24 in Ohio alone, their members. Gar Alperovitz, author of America Beyond Capitalism, states that about 20-22 percent of our electricity is supplied by public utilities of one kind or another.

Regulatory agencies regulate activism. They were/are the preferred alternative of corporations to public ownership — which is why in the end they supported the formation of the first regulatory agencies. Better to regulate their profits they felt than to have none at all.

As former Cleveland Mayor Tom Johnson stated, “I believe in municipal ownership of all public service monopolies… because if you do not own them, they will in time own you, they will rule your politics, corrupt your institutions and finally destroy your liberties.”

Municipal ownership of utilities and electrical cooperatives are a bright idea for the present and future.

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http://www.cleveland.com/business/plaindealer/index.ssf?/base/business-13/1254990793265480.xml&coll=2

At PUCO's request, bulb giveaway held for review
Thursday, October 08, 2009
by John Funk

Plain Dealer Reporter State regulators have pulled the plug - temporarily - on FirstEnergy Corp.'s controversial program to deliver two energy-efficient light bulbs to customers and then charge them.

Alan Schriber, chairman of the Public Utilities Commission of Ohio, asked FirstEnergy on Wednesday to postpone the program after Gov. Ted Strickland and a number of lawmakers asked for the delay. The same day, U.S. Rep. Dennis Kucinich asked the Federal Trade Commission to investigate the bulb program, which he called "unfair, deceptive and injurious to consumers." FirstEnergy issued a statement saying it would further discuss the program with the PUCO and then determine how to proceed.

The furor followed FirstEnergy's announcement Monday that it would hand deliver or mail 3.75 million compact fluorescent bulbs to homes and small commercial customers, beginning Monday. The mass distribution would help the company comply with a new state law requiring that it develop energy-efficiency measures to reduce its power sales every year through 2025, when total reductions must reach 22.5 percent. The state's other utilities have offered their customers discount coupons for light bulbs. FirstEnergy said the cost of each 23-watt bulb was $3.50 and that customers would pay about 60 cents a month extra in distribution charges for 36 months to pay for the bulbs - $21.60 total. The charge would also help to make up for lost delivery income since customers would be using less electricity.

The PUCO approved the plan last month without comment, though it did not approve the exact rate increase the company has announced. The fluorescent bulbs use three-quarters of the power of a standard 100-watt incandescent bulb, so FirstEnergy said consumers would save $60 in energy costs over the bulbs' lifetimes. Thousands of enraged customers didn't buy the argument and swamped the PUCO's call center as well as FirstEnergy on Tuesday and Wednesday demanding that the program be halted or significantly changed. Most irritating to the more than 100 who called The Plain Dealer was that customers would have to pay for light bulbs they did not request and, in many cases, didn't want. Many callers said they already had CFL bulbs in their homes. Others said they feared them because of the mercury they contain, though it is far less than the mercury in a standard fluorescent tube.

Schriber noted that the commission approved the plan after FirstEnergy had reached a consensus with the Ohio Consumers' Counsel and the Natural Resources Defense Council, a national group that often litigates to enforce environmental and renewable-energy standards. "Although the PUCO allowed FirstEnergy to implement its program, we did not approve the charge that will appear on monthly bills as a result," Schriber said. Company officials said they had not submitted paperwork to the commission to recoup costs - as allowed by the state's new law - but would before the end of the year. They reiterated that the PUCO had approved the program and the concept that customers would pay for it.

The charge would appear as a fraction of a cent increase in FirstEnergy's distribution rate, which now is about 3∏ cents per kilowatt hour. The average residential customer uses 750 kilowatt-hours per month. The CFL bulbs are a small first step that every Ohio utility must take to meet the state's new law. Power reductions must be phased in, with a 0.3 percent reduction this year. Even that amount means FirstEnergy must sell 166,000 million-watt-hours less, John Paganie, FirstEnergy's vice president of energy efficiency, told a group of manufacturers meeting Wednesday in downtown Akron. Paganie and other panelists politely debated the law's consequences at a conference sponsored by the Manufacturing Advocacy & Growth Network, or MAGNET, headquartered in Cleveland. The focus was to help commercial and industrial power users adopt energy efficiency measures - everything from lighting to motor upgrades and "smart" meters and circuits - to cut their power use. Paganie told the nearly 200 participants that the public outrage over the CFL bulb program had been "a real lesson learned." "We didn't do a good enough job in helping customers understand the purpose, the reason for doing it and the impact," he said. "It's a pretty difficult job to do, but we've got to step back and find a better way to do that." FirstEnergy Chief Executive Officer Anthony Alexander described the dimension of changes the new law and pending congressional legislation will force on utilities and consumers. Ohio's mandated power reduction "means essentially no growth in electricity use over the next 15 to 20 years," Alexander said. "When you combine no growth, a mandate for new alternative sources of energy, increased environmental costs associated with the use of coal and growing costs to maintain reliability and to add smart grid technology, it is fairly easy to predict where prices are heading," he said. Energy efficiency, then, has become paramount, he said. "We view energy efficiency programs as essential tools that can help customers better manage their energy use while helping us increase the overall efficiency of our electric system."

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