FirstEnergy’s Christmas surprise
December 6, 2012
Filed under Opinion
Written by: Matthew Balsinger
You probably have little knowledge of, or care for, the political policies of the electric company FirstEnergy. Assuming that’s true, you probably also don’t know about FirstEnergy’s sudden and drastic power play that was recently thwarted in the Ohio Statehouse.
After the recent elections, FirstEnergy began lobbying the governor and other Republican leaders in the state to suspend Ohio’s Energy Efficiency Standard, which was passed several years ago by a bipartisan statehouse under the Strickland administration.
The standard, or Senate Bill 221, mandated that large public utility companies reduce their demand over a 15-year period.
This standard was created to address concerns regarding the projection of peak demands and the worry that, years down the road, drastic and expensive measures would have to be taken in order to address energy supply.
The standard went through a rigorous political, practical, public and scientific process over a two-year period. The process was undertaken in public, over a long period of time, with all parties involved at the table — which is what we should expect of good governance.
This past fall, however, FirstEnergy endeavored to suspend the standard in the darkest backroom imaginable, and at a time when there was little-to-no chance of public hearings or expert testimony.
This effort failed, because FirstEnergy was met with considerable resistance from environmental groups throughout the state, and from both Republican and Democratic members of the Statehouse.
Though this effort failed, it is one that we should be extremely concerned with, because FirstEnergy will be attempting this move again next year. The Energy Efficiency Standard is a very good thing. Yes, it is a mandate which may be a concern to conservatives out there, but the standard itself benefits the people of Ohio.
The standard protects consumers from the volatile energy market. This is because efficiency is the cheapest type of energy on the market. The Public Utilities Commission of Ohio (PUCO) reports that it costs around 2 to 3 cents per kilowatt hour, whereas the next-cheapest energy source, natural gas, hovers around 6 to 8 cents per kilowatt hour. The standard slowly reduces demand over a 15-year period by mandating that utility companies offer programs and support for their customers, in order to reduce demand. If demand is protected from sharp spikes, then prices stay low.
By law, no energy program can be taken on by utility companies without the approval of PUCO. The law also mandates that for every dollar spent on efficiency programs, there must also be no less than a dollar’s worth of benefits to the consumer.
The standard, however, also has protections and safeguards for utility companies and large industrial energy consumers in the form of an opt-out. They can apply to opt out of the mandated standard if they can demonstrate to PUCO that they are implementing their own successful efficiency programs.
In addition to an opt-out, they can also enter a PUCO-run cost-recovery program. However you look at Ohio’s Energy Efficiency Standard, everyone wins.
The standard doesn’t cost utility companies, and it keeps prices down for consumers by utilizing the cheapest energy resource we have, which is efficiency.
There will be much more to say about this topic in the coming year, but it is of the utmost importance that everyone be aware of this issue. FirstEnergy is notorious for opposing the Energy Efficiency Standard for no other reason than pure profit.
The Energy Efficiency Standard is good for all Ohioans, and for the United States. If we ever want to achieve the lofty goal of energy independence, we must start with efficiency.