John Funk had another article today (February 19th) in the Plain Dealer about all-electric homeowners in northern Ohio and the 2009 change in FirstEnergy’s electric rates. You may read the article at the following link: http://www.cleveland.com/business/index.ssf/2010/02/puco_takes_blame.html
The article mentions that FirstEnergy has proposed to the PUCO partly restoring the all-electric discounts and phasing in increases over the next eight years. However, we have learned that the proposal includes recovering these lost revenues by adding a new charge to business customers who are billed under the Secondary and Primary Rates. In our opinion, this would be the worst of all worlds. This would not encourage the residential customers to conserve energy and it would help drive more businesses out of Ohio. We agree with Ohio Consumers’ Counsel Janine Migden-Ostrander when she said she could not justify defending the all-electric discounts because the rest of FirstEnergy’s customers would have to make up the difference. While electric costs are around 13¢ per kilowatt-hour in northeast Ohio, they are over 20¢/kWh on the east coast and as high as 43.6¢/kWh in California. We all need to encourage energy efficiency while finding some means of aiding the all-electric users to transition to standard tariffs over the next decade.
An alternative approach
We see this proposed 8-year phase-in period as an opportunity for all parties to work together to lower electric consumption, especially the heavier residential users. We would hope that the PUCO and FirstEnergy might find some way of using the $100 million of future revenues generated annually from the Alternative Energy Rider (AER) and the Demand Side Management and Energy Efficiency Rider (DSE) to aid residential customers who have lost their discounted rate with finding ways to reduce their energy consumption.
For example, the utility could provide funding for residential energy efficiency projects such as tank-less water heaters, energy audits, geothermal heating and cooling systems, etc. Then, the customers can be well prepared to handle increasing costs per kWh over time. For more residential energy saving ideas, see our reports: Pursuit of a Net Zero Energy Home Feb 17 2010 and Reducing Gas Consumption with Insulation Sept 2006. We see this as an excellent opportunity for the utilities and customers alike, working together, to control energy consumption and fulfill the requirements and objectives under Senate Bill 221.
This could be a long-term solution to enviable skyrocketing energy prices in northeast Ohio. It could be a win-win for all in keeping Ohio competitive for businesses and homes alike. It would be a win for the utilities because FirstEnergy can show a reduction in consumption that will help them meet the Ohio legislature’s energy efficiency mandates. And, of course, it is a win for consumers because they will have lower electric consumption leading to lower bills. This also helps keep business operating costs down.
If at all possible, we can’t allow short-sighted politics to harm local businesses. If we do, there would be an added truth to what State Senator Tim Grendell was quoted as saying when FE initially suggested backing down the recent residential increase to 20% and then gradually increasing the charges to the standard residential rates by 2017-18. John Funk quoted him to say, “That is not a solution. That is a stay of execution. But you are still dead at the end of the day.” Not only would all-electric homeowners have higher costs, but also Ohio would have the loss of more jobs.
We believe the Senate Bill 221 legislation can help all-electric homeowners gain the technology to lower energy consumption and costs without harming businesses in a recession.
