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Diversified energy plan can make Ohio's future bright

After 2008, many of the temporary plans that electric companies have been using to establish the prices consumers pay for electricity will expire. So far, Ohio has not adopted a plan for the future and the options that have been considered could lead to higher rates, supply uncertainty and price instability. Ohioans deserve an energy future that will keep pace with projected growth in electric usage while paying a price that will stay reasonable.

The Office of the Ohio Consumers’ Counsel (OCC) recently introduced a thoughtfully planned alternative called Integrated Portfolio Management that takes a diversified approach to managing the energy needed for a successful future. Integrated Portfolio Management works much like a financial investment portfolio where the money invested is put into several different areas to reduce risk to obtain the maximum results possible. This type of energy plan would combine short- and long-term energy resources – including renewable energy – that vary over time. It would focus on assuring affordable and stable rates for residential customers, providing price certainty for business customers and allowing construction of new generation with a cap on the costs.

Electric companies would annually show the Public Utilities Commission of Ohio how their short- and long-term energy resources would fit their demand requirements by filing 20-year plans. A portion of the plan would need to include renewable energy and energy efficiency resources, and depending on how it is structured, could include clean coal technology.

Renewable Portfolio Standard

The renewable energy offered – such as wind, solar, low-impact hydro, geothermal energy and biomass – would be a mandatory percentage of the total electricity sold to customers. This type of requirement, called a renewable portfolio standard, would be used to promote competition, efficiency and technological breakthroughs that can make renewable energy more affordable. The standard also provides several benefits to the environment and society by increasing the diversity of fuel sources, reducing price volatility, reducing the environmental impacts of generating electricity and bringing jobs and economic development to Ohio.

The OCC believes that electricity generated from renewable resources can reach a goal of 20 percent in 10 years. The target would begin with a 2 percent mandate for the first year and would increase equally by 2 percent each year. Additionally, the renewable energy would have to be generated at new facilities and meet environmental standards.

The standard would apply to every utility or business that generates their own electricity. In order to confirm that the standard is being followed, a certifiable credit would be required. This credit gives a record of every megawatt-hour a company is generating and selling as renewable energy or buying to provide to its customers.
To enforce the renewable portfolio standard and encourage the development of renewable resources a $50 per megawatt-hour noncompliance penalty is recommended. This makes it more advantageous to comply with the standard than not.

Energy Efficiency Resource Standard

Another important component to realizing reliable and affordable energy is to lower customer consumption through energy efficiency. Implementing cost-effective energy efficiency measures offers a huge potential for reducing consumers’ electricity bills.
Companies have a disincentive to promote energy efficiency because they would not sell as much electricity and would collect less in distribution charges, so this type of standard is necessary. Additionally, customers may not be aware of energy efficiency programs, available financing options to fund projects or availability of products. Not only would a standard help alleviate these barriers, it also would reduce the risks associated with fossil fuels, improve the overall reliability of the electric system, reduce stress on local transmission and distribution systems and help a state and region increase their energy independence.

The energy efficiency resource standard is similar to the renewable portfolio standard because it also would require companies to prove savings are being achieved from the programs they institute and in which they participate. A $50 per megawatt-hour penalty also would be recommended to encourage compliance with the standard.
The savings targets would start out low and increase incrementally over 10 years. For example, in the first year, electric companies would have to produce savings equal to 0.3 percent of their sales. Additional savings would be sought each year until a total of 8.2 percent in savings of an electric company’s total sales to customers is produced in the 10th year.

This innovative plan will be much talked about throughout 2007 as legislators and others from around the state hear more and more about the many positive steps they can take to help move Ohio and its energy future well into the 21st century.

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Meter reading is an important safety measure

Consumers should be aware of the importance of allowing a natural gas company employee access to read their meter at least once a year. The reasons it is important are to allow the company to:

• See and read the meter
• Ensure that the meter is working properly
• Check to make sure no one has
  tampered with the meter
• Verify there are no leaks at the meter
  which could cause safety issues

Since utility companies need to have periodic access to the utility meters, there are some things consumers can do to help make the meter reading process easier.

Inside the home

If your utility meters are inside your home, you will need to provide access for the meter reader. If possible, clear all items from in front of the meter so the company employee can read the meter. The easier it is for the meter reader to get to and read the meter, the quicker they can do their job and move on to the next house.

Outside the home

Many people think that because a meter is located outside of the home that a meter reader should have no problem accessing and reading the meter. This may not be true. In some instances locked gates can prevent access as can bushes, shrubs and trees growing around the meter. Also, some homeowners leave dogs outside during the day and this can prevent the meter reader from gaining access to the meter. To help the meter reader, homeowners can trim vegetation around the meter, unlock gates and keep animals inside on the day that the meter is scheduled to be read. The next meter read is listed on each monthly utility bill.

Some meter readers may leave a card on the door if they are unable to read the meter. This allows the consumer to either complete and mail the card back to the company (preferably within one to two days) or call the company with a meter reading.

For more information on meter reading, contact the
Office of the Ohio Consumers’ Counsel (OCC) toll free
at 1-877-PICKOCC (1-877-742-5622) or visit online at www.pickocc.org.

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Who’s calling you may be anyone’s guess

Technology in our daily lives can bring us conveniences but also can help create new scams that involve using consumers’ personal information. Many scams may be just a telephone call away, especially with the advent of Caller ID spoofing.

Spoofing occurs when callers change the telephone number that appears on a consumer's Caller ID display. Changes to a displayed telephone number can be performed by using one of several services that allows callers to mask their true calling information.

When a caller's identity is spoofed, the consumer may be inclined to answer the telephone call since it appears to be from a known caller or a local telephone number. Once the caller has the consumer on the line, the caller may try to obtain personal information such as a social security number by claiming to be the police or a government agency.

Scams can also occur without the spoofing of a caller’s identification. For example, a recent news report focused on scammers who posed as a representative of a consumer’s local electric company in order to obtain personal information.

In addition, scams have continued to develop on the Internet. A report by a security firm indicates that some consumers have been victims of a new version of a scam where someone poses as a representative of a bank. In an e-mail, the recipient is asked to dial a telephone number, which leads to an automated voice system requesting an account number and personal identification number (PIN). Using an Internet-based telephone service (called Voice over Internet Protocol, or VoIP), the scammer is able to mimic the voice system of the bank.

This scam is an updated version of an old telephone scam where a caller poses as a representative of the customer's bank to obtain personal information. This type of scam is known as "phishing," which occurs when a scammer uses a company's logo to lure consumers into providing personal information through a bogus e-mail address and website.

To help prevent falling victim to these types of scams, consumers should:

• Be cautious of calls they do not recognize or e-mails they do not
  expect to receive.

• Not be in a rush to disclose personal information. Ask the caller
  or e-mail sender for a callback number and verify that he or she is
  legitimate.

• Ask that a request for personal information be put in writing.

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OCC to help inform consumers on utility issues

During the week of February 4, 2007, the Office of the Ohio Consumers’ Counsel (OCC) will participate in National Consumer Protection Week. The theme for the annual event, spearheaded by the Federal Trade Commission, is “Read Up, Reach Out: Be an Informed Consumer.”

To help consumers become more informed about their utilities, the OCC stresses the importance of reading all the information on utility bills, including the fine print. By knowing what is on monthly bills, consumers can avoid being charged for items they either do not want or need.

For more information on consumer protection issues, visit the OCC’s web site at www.pickocc.org.

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Energy efficiency tax credits

Q. What types of upgrades and improvements can consumers perform to receive federal tax credits?

A. There are many items that can be replaced or installed to help a home become more energy efficient and be eligible for a tax credit including:

• Energy efficient replacement windows
  - 10 percent of the total cost up to $200

• Purchase and installation of certain
  high efficiency air conditioners, heat
  pumps, furnaces, boilers and water
  heaters - $50 to $300

• Duct sealing and materials to seal
  cracks and leaks may be included as
  well - 10 percent of total cost up to
  $500

Q. Are there any renewable or alternative energy resources that qualify for tax credits?

A. There are several renewable or alternative energy resources that consumers can implement in their homes that would qualify for tax credits. Photovoltaic cells (solar panels for home use) and home solar water heaters (used exclusively for purposes other than heating swimming pools or hot tubs) are eligible for 30 percent of the total cost up to $2,000.

Q. What, if any, limitations apply to each household when filing for the credits?

A. Primarily there is a $500 maximum credit for all taxable years for energy efficient upgrades and improvements. The tax credits can be claimed in either the 2006 or 2007 tax year, or can be split between the two years.

Q. Where can consumers get more information about the energy efficiency tax credits?

A. Consumers can learn more about the tax credits by visiting the Internal Revenue Service web site at www.irs.gov. Additional information can be found on the Tax Incentives Assistance Project web site at www.energytaxincentives.org. In addition to home projects, there are credits for purchasing electric, hybrid or fuel cell powered vehicles.