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Ohio Utility Ships Customers Energy-Efficient Bulbs, Plus a Huge Bill

| Monday October 26th, 2009 | 13 Comments

deadlight-bulbCall it greening run amok. Or, more likely, poor planning combined with petty penny pinching by a large corporation. FirstEnergy, an Ohio utility, sent two $3.50 energy-saving compact florescent light-bulbs (CFLs) to customers, and then charged them $21 for the bulbs — whether they wanted them or not.

According to news reports, the remaining $14 was to pay the utility back for the electricity customers would not be using because they had the new bulbs. But if customers don’t use the bulbs, or if they already have their own, they still have to pay the fee.

The scam program, which was set to begin October 12 but has been “postponed,” was FirstEnergy’s response to the state’s new energy law, which requires investor-owned electric utilities to reduce consumption by 22.2 percent by 2025. The bulb distribution was supposed to help FirstEnergy’s customers meet the new requirements.

FirstEnergy, which was a little startled by the outcry, pointed out that customers would save $60 over the life of the bulb. It was unclear if this figure was before or after the $21 fee.

Too Many Mandates, Too Few Lightbulbs?

This isn’t the first such maneuver by a utility: about two years ago, Allegheny Power sent energy-efficient bulbs to its 220,000 Maryland customers without letting them know they would be footing the bill, according to ONNtv.

Bulb brohahas may become more frequent, as states require utilities to reduce consumption and/or use more renewable energy sources, which are typically more expensive. Critics have argued that such sweeping initiatives will raise costs and/or lower profits for utilities, who will then turn to their customers to make up the difference — some more gracefully than others.

But if demand is reduced, should utilities really be repaid for the lost profits? Or should reduced consumption be seen as merely the cost of doing business in a more energy-conscious country? The issue is akin to Saudi Arabia’s demand that it be repaid for lost revenues, should oil consumption drop. In this country it’s called decoupling, and it’s a hotly debated topic.

FirstEnergy, headquartered in Akron, OH, is the nation’s fifth largest investor-owned electric system with 4.5 million customers in Ohio, Pennsylvania and New Jersey. If the company sounds familiar, it might be because FirstEnergy was fingered in a massive East coast blackout in 2003. Failure by the company to adequately maintain transmission lines led to a cascade of outages that left millions without power for days.


▼▼▼      13 Comments     ▼▼▼

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  • Fred

    The “lost revenue” provision in Ohio law specifically does NOT cover the cost of electricity customers didn’t use, as generation is unregulated and those costs are not recoverable through the public utilities commission. Rather, this provision of Ohio’s law recognizes that grid maintenance costs the same whether customers use more power or less power — it costs the same to keep live service to a residence whether ten people live there or the owners are in Florida all winter. By law, the state cannot force a company to sell less of their product and then leave them short of the grid maintenance funding that’s folded into their per-kwh rate, especially as Ohio’s efficiency mandates ramp up to 22.5 percent reductions by 2025.

    Energy efficiency doesn’t really save much money — it just saves energy.

  • JessG

    First, why are the energy producers being held accountable for what the energy consumers use?

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  • binaryorganic

    Inaccurate. You can’t say in your headline that the company “sent” the bulbs, and then in the story say that it’s been “postponed.”

  • Herman Gurbutz

    I would be protesting. Signs and everything.

  • frgough

    Once gain, liberals show that they either don’t know (or more likely don’t care) about economic law.

    Price does not equal cost. Price must always be higher than cost or the business goes out of business. And, no, government bailouts don’t allow you to ignore this law. Only, because a government can’t go out of business, it produces inflation instead.

    • Nick Aster

      This has nothing to do with “liberals”. The point here is that Ohio and presumably this utility did a sloppy job of what could have otherwise been a good program. Decoupling would be a much better system, the way it’s done in California. In that system, utilities can give out CFLs for free, then modestly raise rates to cover the cost and save money because they don’t have to build new power plants, so it’s a real win win.

  • Fred

    Indeed, this is extemely poor planning on the part of the utility. Especially if this is the best they can offer in the way of a conservation porgram. Makes me wonder if some of the former Enron accounting execs are working for FirstEnergy.

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  • Dan

    Every hear of the free market? It’s a novel concept.

    The government is mandating how much energy an energy company can produce for it’s customers. Of course that is going to mean higher prices whether its a goofy bulb story or shortages or anything else. It’s not very complicated but liberals love to make it complicated.

    All you need to understand here is this. Energy is BAD. Earth is GOOD. Stop using energy so mother Gaia can be saved. That means all you peons in your homes need to get with the program and you have no choice in the matter. It’s “for your own good”.

    • Helen

      Free market is what’s made this country great. Why on earth would anyone in their RIGHT mind allow the government to decide what is “for their own good?” Oh, that’s right, Liberals aren’t right, they’re left.

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  • rae

    i think the rates suck..were getting ripped off people .

  • rae

    were getting RIPPED off people…..as long as we let them get away with it ..its going to never change..

  • rae

    i think the rates suck..were getting ripped off people .

  • rae

    were getting RIPPED off people…..as long as we let them get away with it ..its going to never change..