A lesson learned in how not to encourage CFL bulb use

A lesson learned in how not to encourage CFL bulb use

There is an adage that for every problem there is an answer that is quick, simple and wrong; recent events have shown that there can also be an answer that is complex, even convoluted, and equally wrong. We’re talking about the recent announcement that residential customers of FirstEnergy Corp. — which include Mahoning Valley customers of Ohio Edison — would be receiving two compact fluorescent light bulbs from the company. The CFL “giveaway” was part of an effort to reduce electricity usage and encourage the more efficient use of energy. And the program boasted a bonus — lower electricity bills.

Who could complain about that? Well, as it turns out, a lot of people — so many, in fact, that Gov. Ted Strickland urged Alan R. Schriber, chairman of the Public Utilities Commission of Ohio, to ask FirstEnergy to suspend the plan, and late Thursday afternoon, the company said it would.

The next step

Earlier Thursday, a FirstEnergy spokesman told The Vindicator that the 3.7 million bulbs had already been bought; she was not inclined to discuss an alternative to distribution of those bulbs. If the bulbs are bought and paid for, it could be difficult to argue against their distribution to consumers now. But how the company manages to recoup it investment is bound to attract considerable attention in Columbus, which is obviously not what the PUCO had in mind when it first approved the light-bulb program, and decided it didn’t even merit a public hearing.

In a release Wednesday, Schriber said the PUCO had allowed FirstEnergy to implement its program, but did not give the company permission to charge customers an estimated 60 cents per month for three years. That $21 was meant to cover the cost of the bulbs and their distribution and compensate FirstEnergy for the electricity it wouldn’t be able to sell because customers would be using less power.

That last part sounds just crazy. But FirstEnergy spokeswoman Ellen Raines puts it this way: The government mandates FirstEnergy to sell less of its product, and the Legislature has recognized that the company is entitled to compensation. And she’s right.

This is all an outgrowth of Ohio’s energy policy reform law, S.B. 221, that was passed in May 2008. Among other things, the bill short circuited the ill-advised electricity deregulation experiment that the General Assembly launched in 1999, and which would have been a disaster for Ohio consumers if allowed to follow its course. Sixty cents a month would not have begun to cover the cost of deregulation.

More to come

Of course, it should be acknowledged that 60 cents a month is not going to cover the eventual cost of implementing S.B. 221 over the coming years. The bill mandates electric utilities to reduce energy usage by 22.2 percent by the end of 2025. Reducing energy usage is sound public policy for a number of reasons; at the same time, if a state is going to regulate what a utility sells and how much it charges, the state must assure the utility a reasonable profit. Determining what’s reasonable has always been a problem, but that’s the PUCO’s job.

The saga of FirstEnergy and its CFL light bulbs provides a textbook example of how a utility and the PUCO shouldn’t handle future energy conservation/utility compensation programs.

It shows that Ohio consumers aren’t inclined to be hoodwinked. They can do the math necessary to see that paying for a couple of light bulbs worth a few dollars on an installment plan that totals $21 over three years isn’t a great deal. Besides, a lot of people just aren’t interested in using CFL bulbs, at least not yet, for a variety of reasons. Trying to force them to do so is risky business. And those who are inclined to use them have been buying them on their own for some time now.

The PUCO could have and should have gotten ahead of this controversy by holding a public hearing. Any PUC that couldn’t see that doesn’t deserve to have the word public in its name.

FirstEnergy says forcing the bulbs on people (no, those weren’t FirstEnergy’s exact words) was the best and quickest way to get consumers to start using less energy. Perhaps, but handing the customers coupons for free bulbs with a velvet hand might have been just as effective in the long run as hanging the bulbs on the door knob with what many customers viewed as a steel fist.