PUCO Reverses Position on AEP Rate Case

As reported in the Cleveland Plain Dealer today, the Public Utilities Commission of Ohio (PUCO) ruled yesterday, February 23rd, to disapprove the settlement agreement in AEP-Ohio’s rate case.  This reverses their December 14th decision to approve the settlement.  Note that IEU-Ohio was the only business group that opposed that settlement agreement.  The PUCO press release stated:

“Upon consideration of arguments raised by parties who did not sign the settlement agreement and upon becoming aware of the actual impacts of the agreeement, the Commission found that approving the agreement does not benefit ratepayers and is not in the public interest.”

The PUCO ordered AEP to return to the rates that were in effect in December 2011, until such time as a new rate plan is adopted.  By next Tuesday, February 28th, AEP must file tariffs to comply with this order.  It is unclear at this time when those rates will take effect or whether there will be any refunds of January and February charges.

AEP’s original rate application, which was filed on January 27, 2011, remains in place. The PUCO gave AEP 30 days to amend or withdraw that application.  The PUCO will allow any party to participate in the proceedings when they occur.  We encourage AEP customers to stay informed and get involved.  If you are a member of IEU-Ohio, you will be well represented in those proceedings.

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Successful Energy Conference

With almost 600 attendees, the 16th Annual Ohio Energy Management Conference, which was held earlier this week in Columbus, was a huge success.  Matt Brakey, as chairman of IEU-Ohio, served as the emcee and made presentations at two workshops.  Mike Brakey was also a presenter at another workshop.  You may find the presentations on the Manufacturers’ Education Council website.

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AEP’s New Rate Plan

On December 14th, 2011, the Public Utilities Commission of Ohio (PUCO) issued an order that:

  • Modified and approved the settlement filed on September 7th in AEP’s electric security plan (ESP) proceeding;
  • Approved the settlement in AEP’s distribution rate case; and
  • Approved the proposed merger of Ohio Power and Columbus Southern Power to form AEP-Ohio.

New rates took effect on bills rendered on or after January 1, 2012.  Some customers saw large increases in their January bills.  The impact varies by rate schedule and load profile.  For more information, see this Columbus Dispatch article from Sunday, February 19th: First AEP plan aided smaller businesses, and this editorial from today’s Akron Beacon Journal: Consumer unfriendly.

As noted in the article, the Industrial Energy Users – Ohio (IEU-Ohio) was one of the few organizations that raised objections to the rate proposal last year, but these were largely ignored.  The PUCO staff generally agreed with IEU-Ohio, but other industrial groups supported the AEP proposal to put most of the rate increases on smaller businessses.  Now that some small businesses are seeing “rate shock”, the PUCO is reconsidering its approval of the rate plan.  The AEP rate plan is sure to be a hot topic at this week’s Ohio Energy Management Conference in Columbus.  Stay tuned!

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Low Natural Gas Prices

We recommend using natural gas over electricity wherever it makes sense.  One million BTU’s of energy equates to 970 cubic feet of natural gas or 293 kWh of electricity.  For example, if your average electric cost is about 10¢ per kWh, the burner-tip price of natural gas would have to exceed $29 per thousand cubic feet (Mcf) to become as expensive as electricity.  Current natural gas prices are much lower than that. For Dominion East Ohio commercial and residential customers, the standard price will be $3.68 per Mcf starting in mid-February.  This is down 10% from the current price of $4.08 with took effect in mid-January.  You may read more about this in John Funk’s article in the Plain Dealer.

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Reducing Household Power Consumption

In this article in today’s Plain Dealer, John Funk describes how Mike Brakey cut the electric consumption in his Shaker Heights home dramatically through various measures, including replacing all the light bulbs in the house with LED’s.  Here is more detailed information on what LEDs were used.

We installed 88 LEDs at a total cost of $2,400 over a three-year period.  The combined load of the LEDs is 709 watts compared to approximately 7,000 watts for equivalent incandescent bulbs.  $330 was also spent on 11 Lutron LED dimmer switches for individual rooms.  If a power outage occurred, a back-up generator could operate every LED light in the home with as little electrical draw as 100 watts.

Details on the fixtures we used are shown in the table below:

Number

Fixture Cost per fixture Kelvin Rating

Watts

3

Cree RL6
1,000 Lumen
$95 3,000 12.4

3

Cree RL6 650
Lumen
$75 3,000

10.0

7

Nexxus Array
Par 30
$50 5,000

7.8

70 Sylvania A19 $20 3,000 8,4

5

Sylvania G25 $29 3,000 8.3

The Kelvin rating relates to both the color of the light and the temperature.  3,000 K is a warm white light, with a tinge of yellow.  5,000 K is a cool white light, with a tinge of blue; it is better for reading.  All of these fixtures are rated for a minimum of 50,000 hours of life, with less than 10% degradation.

Presently, residential electric rates across FirstEnergy territories in Ohio average approximately 12 cents per kilowatt hour.  For 50,000 hours of light, this translates into $42,558 for equivalent incandescent bulbs as opposed to $4,255 for LED’s we installed.  Thus, the savings would be about $38,300 over 50,000 hours of usage.

The payback period is sensitive to family living habits.

  • In the extreme, if you are part of a large family that never turns lights off and they are run round the clock, 365 days a year, 50,000 hours would be 5.7 years.  The simple payback period would be 4.3 months.
  • If a family has each LED turned on for 6 hours per day, 50,000 hours would translate to 23 years. The payback period would be closer to 17 months.

Another benefit is that, for the next twenty or more years, I won’t hear my wife ask me to change a burned out light bulb!  These payback periods might become shorter for future LED users because for the following reasons:

  • LED pricing continues to fall as sales grows;
  • LED technology advances are continually providing more lumens per watt; and
  • Residential electric prices are likely to climb much higher over the coming years.

With financial savings of $38,300 over 50,000 hours, we have additional green benefits of:

  • 742 less metric tons of CO2 (carbon dioxide)
  • 4.72 less metric tons of SOX (sulfur dioxide)
  • 1.25 less metric tons of NOX (nitrogen oxide)

Mike Brakey

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Power Quality in Geauga County

We wanted to let you know about an upcoming educational forum, sponsored by the Geauga Growth Partnership and FirstEnergy, for energy intensive businesses in Geauga County. The topics include:

  • Power quality
  • Distribution system energy efficiency
  • Distribution automation
  • Volt/var control
  • Distributed generation

Power Quality in Geauga County Wednesday, February 8th 7:30 to 9:30 A.M. (Breakfast served at 7:30; program begins at 8:00.) Punderson State Park Manor Lodge 11755 Kinsman Road Newbury, Ohio 44065   To make your reservations, call 440-564-1060 or email info@geaugagrowth.com.

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Natural Gas Prices Falling

The NYMEX settlement price at the end of December was $3.084 per thousand cubic feet (Mcf), down 8% from $3.364 at the end of November.  For Dominion East Ohio commercial and residential customers under Choice, the price to beat is NYMEX plus $1, or $4.084 per Mcf beginning in mid-January.  For more information, you may read John Funk’s article from the January 4th Plain DealerDominion, Columbia rates lowest in decade

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Choices for Natural Gas

In recent years, the Plain Dealer’s John Funk has written a number of articles on residential and small commercial natural gas prices. John’s most recent article from Sunday, December 25 is How to choose the best natural gas contract. Commodity prices of natural gas haven’t been this low in a decade.  We have recommended that Dominion East Ohio (DEO) customers stay with the variable Standard Choice Offer (SCO) rate, if they have not selected another supplier.  If a customer had already contracted with a supplier at a higher rate, we recommended that the customer cancel and default back to DEO if there was not a significant penalty charged by the supplier. In fact, this is what I did for my Cleveland area home. I regret that I didn’t recall the information in John Funk’s September 4, 2010 article, Dominion East Ohio Gas switches some customers to high-priced suppliers.  The reason I mention this is because for the last two months I became one of the customers that was bumped to a higher-priced supplier.  If I had recalled the article, I could have maximized my natural gas savings in recent months by making a simple phone call to DEO specifically requesting to be returned to the least expensive variable program, the SCO. When I defaulted back to DEO’s variable program last September, I was returned to a different program called Standard Service Offer (SSO).  Like the SCO, the pricing formula was identical for two months – the NYMEX settlement price at the end of each month plus a dollar per Mcf. What I did not recall was that, after two months under the SSO, my account was handed over to a higher priced marketer under the Monthly Variable Rate (MVR) program.  The particular marketer that I was assigned used a pricing formula of the NYMEX settlement price each month plus $1.75 per Mcf, as opposed to $1.00. Summary:  If your intention is to default to DEO’s variable program, examine your natural gas bill closely.  Make certain that you are on the Standard Choice Offer (SCO) program as opposed to the Standard Service Offer (SSO) or the Monthly Variable Rate (MVR).  If you are on the MVR program ask your supplier what formula they are using.  If it is not NYMEX plus $1/Mcf or less, contact DEO and request to be returned to the SCO program. Mike Brakey

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FirstEnergy’s Energy Efficiency Charges

FirstEnergy passes on the costs associated with Ohio’s energy efficiency mandates to their customers through a charge called the DSE2 charge.  FirstEnergy recently announced their new DSE2 rates that will take effect on January 1, 2012.  The current and new rates in cents per kilowatt hour, by utility and rate schedule, are summarized in the table below (table no longer available).

If the rates for your rate schedule are increasing and you are a “mercantile” customer, it is now even more important to see if you can qualify for exemption from the energy efficiency charges.  Contact us if you have any questions about your situation.

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McDonald’s Owner in the News

Brakey Energy is proud to work with many McDonald’s franchise owners in northern Ohio on energy management strategies.  One of those owners was featured in this article in the November 17th issue of the Sun Press: After 53 years, Karos is still lovin’ it.

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