Office of the Ohio Consumers' Counsel

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OCC objects to FirstEnergy's attempt to collect costs of failed CFL program from residential customers

COLUMBUS, Ohio – February 18, 2010 – FirstEnergy’s compact fluorescent light bulb (CFL) program continues to cost too much money, the Office of the Ohio Consumers’ Counsel (OCC) said in a filing Wednesday. FirstEnergy requested collection of all costs from its initial CFL program, which was the subject of much ire from FirstEnergy customers last year. Those charges include services that cost about $772,000 and are not benefiting customers in the redesigned program.

The OCC has objected to FirstEnergy’s request to collect marketing, storage and general management costs incurred from its original CFL give-away program. The utility spent $427,000 to market the CFL program – less than 24 percent of what was estimated to properly market and educate consumers about the program. The give-away program was ultimately terminated, but FirstEnergy is still asking the Public Utilities Commission of Ohio (PUCO) to allow it to collect what it spent on the failed program that will not benefit consumers.

“Collecting costs for a failed program that provides no tangible benefits for residential consumers cannot be allowed,” Consumers' Counsel Janine Migden-Ostrander said. “The costs from the original CFL program, which will not be used in the revised proposal, are the sole responsibility of FirstEnergy, not its customers.”

FirstEnergy put the revised CFL program on hold last year, which the OCC and the Natural Resource Defense Council objected to at the time. The delay will result in about $120,000 in storage fees. In addition, FirstEnergy requested collection of $225,000 in administrative costs with no explanation about how they were incurred. The OCC argued these costs provide no benefits to consumers in the current proposal and should not be allowed.

The new CFL program was redesigned through a collaborative effort, which included the OCC, to offer CFLs to FirstEnergy’s customers in a variety of ways. FirstEnergy then requested, and the PUCO approved, a delay in the implementation of the program so it could be filed as a part of its energy efficiency portfolio. The program will not be available until at least April.

The OCC wants the PUCO to review FirstEnergy’s request to collect distribution revenue it loses when consumers save money from using CFL bulbs.

Additionally, FirstEnergy asked to collect part of the savings realized from energy efficiency programs. However, the utility’s request improperly included the savings that occur because of improvements made to distribution and transmission lines. These improvements are not undertaken for the purposes of energy efficiency. The OCC argued that these improvements were not intended to be new energy efficiency programs, but are part of FirstEnergy’s maintenance of its distribution system. The utility should not be given an incentive for conducting scheduled maintenance on its electric lines, the OCC said. Sharing in the savings that result from energy efficiency programs should only be considered when a utility exceeds the energy efficiency benchmarks laid out in Ohio’s electric energy law by offering cost-effective programs that provide direct benefits to customers, according to the OCC.

“FirstEnergy is already collecting costs for these distribution line improvements and should not be given an incentive for doing its job to maintain service for its customers,” Migden-Ostrander said.

In addition to the revised CFL program, FirstEnergy proposed seven other residential programs in its energy efficiency portfolio. The other programs include a direct load control, appliance turn-in, energy efficient products, efficient new homes, comprehensive residential retrofit, online audit and online efficient products programs.

About the Office of the Ohio Consumers' Counsel

The Office of the Ohio Consumers' Counsel (OCC), the residential utility consumer advocate, represents the interests of 4.5 million households in proceedings before state and federal regulators and in the courts. The state agency also educates consumers about electric, natural gas, telephone and water issues and resolves complaints from individuals. To receive utility information, brochures, schedule a presentation or file a utility complaint, residential consumers may call 1-877-PICKOCC (1-877-742-5622) toll free in Ohio or visit the OCC website at www.pickocc.org.