By Kennedy Maize
In the words of shade-tree philosopher and New York Yankee Hall-of-Fame catcher Yogi Berra, “It’s deja vu all over again.”
The Public Utilities Commission of Ohio has put on hold a plan by Akron-based FirstEnergy Corp. to send out compact fluorescent light bulbs to its customers, unbidden, and bill them for the bulbs in their rates.
Here’s the Energy Daily story, which clearly misuses uses the term “free”:
“At the request of the state’s governor, the Public Utilities Commission of Ohio … ordered FirstEnergy Corp. to halt a program to give free compact fluorescent light bulbs to its customers, citing concerns about the cost of the energy efficiency initiative.
In a statement, Alan Schriber, chairman of the commission, said the agency had received many phone calls and e-mails about the cost of the program, under which FirstEnergy is sending two bulbs to each of its customers.
“Schriber said the commission had approved the program, but not the charge that the utility is putting on customer bills to pay for it. He cited media reports as putting the cost at 60 cents per month for three years, amounting to $21.60 [per customer] for the life of the program.
‘The PUCO has not approved these additional dollars nor have we received a request by the company to do so,’ he said.
“‘Today, I received a letter from [Ohio] Gov. Ted Strickland (D) asking that the PUCO postpone the program until such time as we can address several questions raised by the governor, members of the Ohio General Assembly and FirstEnergy customers related to program details and costs. Until the PUCO has specific details regarding the program costs, FirstEnergy should not deploy its compact fluorescent light bulb program.’
“FirstEnergy, which says the bulbs will save customers $60 in electricity costs over their operating lifetime, agreed to the commission’s request and pledged to work with the agency to ‘respond to its questions and determine how best to proceed.’”
What’s going on with these utilities? Don’t they read and remember their own industry’s recent history? Whomever came up with this FirstEnergy light bulb program should be fired immediately, as should the managers who approved it. The utility is going to end up apologizing to its customers, giving them the bulbs, and eating the entire cost. The public relations damage will be lasting.
Ohio isn’t that far from Maryland and Pennsylvania, where Allegheny Energy got entangled in an almost exact precursor of what is going to happen to FirstEnergy. Nearly two years ago – close to Christmas 2007 – Pennsylvania-based Allegheny Energy shipped a CFL bulb to each of its 220,000 Maryland customer accounts, with no coherent explanation, disclosing in fine print that the utility would recover the cost in rates (with a return on investment). The utility said it was responding to an initiative approved by the Maryland Public Service Commission.
It was a public relations and regulatory disaster, with the MPSC denying any culpability in approving the program. Allegheny ended up eating the costs and suffering a PR plastering in the Maryland media. It was part of an ill-advised industry strategy advocated by some utility executives, such as Duke Energy’s Jim Rogers, that utility energy efficiency programs should not require customer advanced approval. Rogers and others have advocated an “opt-out” rather than “opt-in” approach to efficiency programs. The Allegheny and First-Energy approaches amount to “sock it to ‘em and let ‘em scream.”
Marylanders screamed, and opted out en mass. The program crashed. The utility had energy-efficient egg on its face.
It looks like Ohioans are going to do the same screaming, with the same results.
The cost of the light bulbs to customers in the First Energy plan, spread out over three years, amounts to over $20. That’s for the equivalent of two 60-W incandescent bulbs that are available in bulk for about $2 each, according to LightBulbsDirect, a web-based provider. The utility says the bulbs will save $60 over their projected nine-year life. Maybe. Maybe not. CFL’s have a history of not meeting rated lifetime projections.
But the numbers are mostly irrelevant. What’s shocking is the arrogance of the utility to take a regulatory requirement to promote energy efficiency and turn it into a program where customers have no choice but to accept the bulbs and pay the utility-determined price, which, no doubt, results in the maximum regulated return on investment. There is no way that these bulbs are “free.”
But they will be free after the Ohio regulators are through with reviewing the program. FirstEnergy, like Allegheny Energy, will eat the cost of the unwanted light bulbs.
FirstEnergy has a deserved long-term reputation as a fumbling, bumbling utility. This latest fiasco adds to that rep. Those who do not understand history – even recent history—appear, as big-time philosopher George Santayana observed, doomed to repeat it.