FirstEnergy Corp. no longer wants to help you use less electricity and has asked the state for permission to scuttle its rebate and incentive programs to help consumers buy more efficient appliances and lighting.
View full sizeFirstEnergy wants to end its program that funds discounts on high-tech consumer light bulbs such as this Cree LED bulb that uses only 11 watts but gives the light of an old-fashioned 60-watt bulb. COLUMBUS, Ohio -- FirstEnergy's plan to end most of its customer energy efficiency programs by year's end is up for a vote before the Public Utilities Commission on Thursday.
Such programs reduce demand for electricity, helping to keep prices to consumers lower, say advocates that have urged the PUCO to reject FirstEnergy's proposals.
The Commission's agenda indicates it will consider a "finding and order" on the company's application to scuttle the programs -- which the company can do under the terms of a new law freezing the state's efficiency standards through 2016.
FirstEnergy is the only Ohio electric company trying to kill its programs, which give customers rebates and discounts on Energy Star appliances and lighting and which were on course to significantly reduce demand, according to FirstEnergy's own calculations submitted previously to the PUCO.
A company spokeswoman points out that the company is keeping a home energy audit and efficiency upgrade program for low income customers and an efficiency program for commercial and industrial customers using significant amounts of power.
The Akron-based company asked the PUCO on Sept. 24 for permission to suspend the bulk of its efficiency programs at least through 2016, citing the new state rules that took effect just 12 days earlier and arguing that it can meet the currently frozen state standards without the programs.
Those changes in state efficiency standards were contained in Senate Bill 310, which FirstEnergy had lobbied lawmakers hard last spring to approve. The company argued that the programs would raise electric rates. Killing the programs would lower rates, it said.
But in presentations to investors, the company's executives had also said that the state rules were interfering with normal market growth, meaning power sales.
Several major industrial customers joined with FirstEnergy to upend the state rules. They argued the programs were costing them too much money and that they would have installed more efficient equipment without the state's rules in order to stay competitive. Smaller companies argued just the opposite, that they would not have been able to make upgrades -- and stay competitive -- without the assistance.
FirstEnergy's move to get rid of the bulk of its energy efficiency programs comes at a time when the company is also trying to convince the commission to approve a new three-year rate plan that would commit its Ohio distribution companies to buy power for 15 years from two of its large, old power plants rather than rely completely on currently less-expensive power sold on wholesale markets.
Under this instantly controversial proposal also pending before the PUCO, the Illuminating Co., Ohio Edison, and Toledo Edison would have to buy all of the output, at whatever the cost, from the Davis-Besse nuclear power plant near Toledo and the coal-fired W.H. Sammis power plant on the Ohio River about 13 miles north of Steubenville.
The purchase agreement would work this way: After buying the power, the three distribution companies would re-sell it into wholesale markets -- absorbing any losses or, FirstEnergy argues, profiting in future years when wholesale power prices rise. The company has argued that over the 15-year agreement, the deal would save customers up to $2 billion. Opponents have questioned that.
In other words, opponents have countered, FirstEnergy would have the benefits of old-fashioned regulated prices for these two uncompetitive power plants while its entire fleet of power plants would remain unregulated by the state.
In sworn testimony, company executives have told the Commission that without the deal, the company could be forced to close Sammis and Davis-Besse because they cannot compete against modern, gas-fired power plants. They said they expect wholesale market prices eventually to increase significantly, in which case, the Ohio companies buying Davis-Besse and Sammis power would be getting a deal.
Together, Davis-Besse and Sammis have cost the company billions of dollars in safety and pollution control upgrades -- money spent that now would have to be shouldered by rate payers to cover the cost of the more expensive electricity they generate, opponents have countered.
A company spokesman, in an email Thursday, noted that the power purchase agreements would be subject to a "prudence reviews" and that the company would annually submit costs to the PUCO for review.
This story was revised after its initial posting to further explain the proposed power purchase agreements and to note that FirstEnergy is keeping a portion of its energy efficiency programs.