FirstEnergy requests waiver in battle of bulbs

10/29/2009

COLUMBUS - Between all the finger-pointing over who was to blame, FirstEnergy Corp. yesterday suggested an alternative to its mandatory light-bulb replacement program that had consumers across northern Ohio in an uproar.

The Akron parent of Toledo Edison urged the Public Utilities Commission of Ohio to waive this year's mandate that the utility demonstrate a 0.3 percent reduction in electricity usage while it explores a voluntary program that may carry a lesser cost for customers.

"Some have referred to the energy savings aspects of [Ohio's new electricity law] as the statute's 'jewel,'" FirstEnergy's senior attorney, Art Korkosz, told the PUCO. "As with other 'jewels,' however, energy efficiency programs come with a cost."

The PUCO took no immediate action yesterday. The commission rejoined the battle of the bulb af-ter Gov. Ted Strickland urged a delay in FirstEnergy's plan to deliver two energy-efficient, compact fluorescent light bulbs to each customer, regardless of whether the bulbs are wanted.

In turn, those customers were to be billed 60 cents a month for three years for a total of $21.60 to cover the costs of the bulbs and their delivery and to compensate the utility for "lost revenue" from the anticipated reduced energy usage.

FirstEnergy halted the plan, and the utilities commission agreed to the hearing. In the meantime, the utility is warehousing 3.75 million light bulbs.

Critics of the program yesterday argued that FirstEnergy was late with its plan to meet mandated 2009 energy efficiency standards under state law and forged ahead for commission approval as a deadline approached despite concerns that had been raised.

FirstEnergy countered that it believed there was consensus with entities such as the Ohio Consumers' Counsel.

Some commission members, in turn, said they relied on the apparent absence of criticism as they proceeded to approve the general plan but without specific cost-recovery approval.

The utility warned that if there was this much backlash to this plan, regulators should expect much more as greater efforts occur later to meet the goal of reducing energy usage by 22 percent by 2025.

"Why would anybody in the future agree to stipulations or agreements when a party comes forward after you-know-what hits the wall and says, 'We really didn't agree with that'?'' PUCO Chairman Alan Schriber asked Consumers' Counsel Janine Migden-Ostrander.

"It was our impression, because the [PUCO] staff and FirstEnergy were supporting this program, that it was going to get approved, so we did what we could to mitigate the damages to customers," Ms. Migden-Ostrander said. One of the benefits negotiated, she said, was a reduction in the direct price of the light bulbs from $5.75 to $3.50.

"At no time did we say that we supported the program…." she said.

FirstEnergy has not formally submitted its alternative plan to the commission. That plan would generally involve giving customers vouchers to voluntarily redeem up to six light bulbs each through a yet-to-be-determined delivery mechanism.

But whether voluntary or mandatory, FirstEnergy is not necessarily backing off on its request to be compensated for the utility's expected "lost revenue" from decreased energy usage. Mr. Schriber essentially defined "lost revenue" as an investment now in reduced energy demand that should pay off later.

"That's going to be costly to some extent, but in the long run, it's going to foreclose the need to build a new power plant or to repower an old power plant…." he said. "In the long run, that's the dividends."

Contact Jim Provance at:

jprovance@theblade.com

or 614-221-0496.