Free light bulb plan gets regulators’ OK

3/24/2011

The Public Utilities Commission of Ohio has approved a revised program for FirstEnergy Corp. to distribute free compact fluorescent light bulbs.

The program was postponed in late 2009 after customers and politicians sharply criticized the utility’s initial proposal to distribute two CFLs door to door in a mandatory program.

The revised program is one of the initiatives included in a three-year energy-efficiency plan for FirstEnergy that thePUCO approved Wednesday.

FirstEnergy’s plan to meet state benchmarks for 2010 through 2012 has been waiting for approval from the commission since 2009.

As part of the revised light bulb program, FirstEnergy customers can immediately begin calling 888-846-2235 to request up to six compact fluorescent bulbs, called CFLs, for free. The bulbs will be mailed to homes or businesses within four to six weeks at no cost.

By April or May, customers who want more CFLs will be able to buy them through an online store or such area retailers as Home Depot and Lowe’s for no more than 50 cents per bulb, until the 4 million bulbs run out.
Some of the bulbs also will be distributed through local agencies that assist low-income cus
tomers.

“The original pass at the CFL program had some fundamental issues that were completely redesigned,” said Todd Snitchler, a former state representative from Lake Township who took over as PUCO chairman on March 1.
FirstEnergy spokeswoman Ellen Raines said the utility was pleased the commission approved the portfolio, saying the company was “anxious to begin providing the programs to customers so they can begin benefiting from energy and cost savings.”

In addition to the redesigned CFL program, the commission approved several other energy-efficiency programs to help customers save on their electricity, Snitchler said in a telephone interview.

The savings consumers can realize if they use the various programs can more than pay for the costs that will be assessed to all customers for the energy-efficiency initiatives, Snitchler said.

All FirstEnergy customers will pay the fees, regardless of whether they take the bulbs.

FirstEnergy residential customers using an average 750 kilowatt hours of electricity per month will pay about $1.50 a month over three years to fund the programs and the associated “lost distribution revenue.” That totals $54 over the three-year period.

In comparison, the PUCO said, the average residential customer who installs six CFLs can save an estimated $49.25 annually -- or almost $150 over the same three-year period.

While Snitchler agreed with Wednesday’s decision, he filed a two-page “concurring opinion” in which he states his concern with allowing utilities to recoup lost revenue for electricity they don’t sell.

He said encouraging customers to save energy while still allowing utilities to recoup costs for electricity it doesn’t sell presents a significant risk of undermining public support of such programs.

Snitchler said he believes the commission and other stakeholders should take time before FirstEnergy’s approved rate plan expires in 2014 to develop rate designs that “promote energy efficiency and rate stability without relying upon the collection of lost distribution revenues.”

He said he would be reluctant to approve any future proposals that include lost distribution revenue resulting from mandates for energy-efficiency savings.

Anthony Rodriguez, spokesman for the Ohio Consumers’ Counsel, said the state’s residential utility advocate agrees “that lost distribution should be revisited, and a mechanism that has periodic review and consumer safeguards is one that will best benefit energy efficiency and residential consumers.”

The Ohio Consumers’ Counsel worked with other groups on refining FirstEnergy’s energy-efficiency portfolio and believes consumers can benefit from the programs. However, the agency still has concerns with some of the costs allowed in the CFL program, such as personnel, managing and some marketing costs, Rodriguez said.

FirstEnergy will be allowed to recoup about 30 cents a month (included in the $1.50-a-month total) for three years for the light bulb program, for a total of about $10.80. That is half the 60 cents a month, or $21.60 total, the utility originally sought.

State law requires regulated, investor-owned utilities such as FirstEnergy to reduce energy usage by 22.2 percent by the end of 2025 and reduce peak demand by 7.75 percent by the end of 2018.