All-electric homes in the United States use electricity for heating as well as air conditioning, lighting and to power all the home appliances. Until recently, electric utilities offered declining rate blocks to large residential users to encourage more electric consumption. Thus, declining rate blocks discouraged energy conservation.
Politicians in many states, caught up with all the clamor and hysteria of global warming fears, have enacted laws requiring the utilities to both reduce energy consumption and implement expensive renewable technologies such as wind and solar. To meet these recent mandates, the utilities had to flip a switch and redesign the residential rate blocks. Now, utilities have adopted either flat rate structures or inclining rate blocks in order to encourage energy conservation. For example, in order to encourage a switch to solar power, in California’s Pacific Gas & Electric territory, residential customers pay 44¢/kWh for each kWh in excess of 850 kWh (see PG&E’s Proposed New Rates ). In Massachusetts, politicians with a “green” agenda have just acknowledged that their recent renewable energy mandates will result in residential customers paying 50¢/kWh to 60¢/kWh in the next few years (see Fuming Over Solar Rules ).
California and Massachusetts are several years ahead of Ohio with regard to energy legislation and implementation. We can only hope that Ohio’s decision makers can learn what not to do from these other states and navigate our Ohio economy away from financial ruin. We are beginning to see the consequences of recent Ohio energy legislation. I fear we will solely blame FirstEnergy for actions mandated by state legislature, the PUCO and the Ohio Consumers’ Counsel.
Let’s look at two Illuminating Company examples in order to examine the results of energy conservation mandates in Ohio.
| Illuminating Company |
Typical home without electric heat |
All-electric home |
| Kilowatt hours per month |
500 |
5,000 |
| Average electric cost in 2009 |
$59.97 per month
12¢ per kWh |
$361.24 per month
7¢ per kWh |
| Average electric cost in 2010 |
$63.88 per month
13¢ per kWh |
$673.91 per month
13¢ per kWh |
| % Increase |
6.5% |
+86.6% |
We can see that the all-electric home used to pay 5 cents less per kWh, but now the cost per kWh is about 13 cents for both homeowners. Ohio officials wanted to encourage higher users of electricity to pursue energy conservation actions within their homes. So, their costs were brought in line with those of other users.
Now, Ohio officials have heard complaints about cost increases for over 100,000 voters with all-electric homes. What are they going to do? The Ohio governor wants to return all-electric rates permanently to what they were before state laws were signed and implemented. See John Funk’s article in the April 10th Plain Dealer for more information: Strickland wants electric discounts restored permanently
What happens when the politicians hear from the remaining one million voters in FirstEnergy territory that they do not want to subsidize the all-electric homes? Will they reverse themselves again?
Conclusion: It is critical to reduce the impact of the actions taken by state officials. You can only accomplish this by striving to become more energy efficient. Watch for future blogs with energy efficiency ideas.
