Friday, October 09, 2009

The insanity of government-mandated energy programs

The insanity of certain government mandated energy-saving programs is on full display here in Ohio with the recent issue of the 'gift' of compact fluorescent light bulbs (CFLs) to homeowners in the state.

The Bullet Points:

* Ohio politicians pass 'bold, new' energy law (aren't they great???)
* Law puts mandate on energy producers to get their customers to reduce consumption (yes, that's what the law does...)
* Electric company develops program to 'give' us all CFL light bulbs - at a cost 67% more than we'd pay for the bulbs in the store
* Government agency 'allows' company to recoup costs of program - including the cost of energy NOT used because of the energy-reducing product
* Public expresses outrage
* Ohio politicians begin backtracking

The Details:

From our electric supplier, FirstEnergy, is this description of the program:

To help customers use energy more efficiently, we're delivering two compact fluorescent light bulbs (CFLs) to the homes of residential customers of FirstEnergy’s Ohio operating companies -- Ohio Edison Company, The Cleveland Electric Illuminating Company, and Toledo Edison Company. These types of bulbs use up to 75 percent less electricity than incandescent bulbs and can last 10 times longer -- contributing to significant money and energy savings over the life of the bulb.

Providing energy-efficient light bulbs is just one way we can help our customers save money while also helping the environment.

So, according to the website, what will happen is that FirstEnergy will have people go door-to-door to deliver two of the bulbs. You'll recognize the workers by their green t-shirts and matching green hats. How we're supposed to see those green t-shirts in this cool weather is a question that is not addressed, but not to worry. They'll have a photo ID indicating their employment with PowerDirect, the company hired to make the deliveries.

But, you ask, what if I don't want these bulbs? What if, being a 'kind and caring person,' I'm already doing my part to help the environment? Or, what if, being an 'evil and callous person,' I've decided the regular old standard bulbs are fine for me and I don't mind paying the extra energy costs for a product I like?

Well, they've got an answer for that:

We're sorry you don't want your energy-efficient light bulbs. Unfortunately, we're not able to pick up your bulbs. Feel free to give them to a neighbor, friend or a family member. Because CFLs contain a small amount of mercury, the EPA recommends specific disposal guidelines. If you want to throw them out, check if your municipality permits you to put CFLs in the garbage. If so, seal the bulb in two plastic bags and put it into the outside trash, or other protected outside location, for the next normal trash collection. If not, you will need to properly recycle the bulbs. CFL recycling is available free of charge at The Home Depot stores – or your municipality might have other CFL recycling programs available.

So does this mean I can't refuse them? Apparently not - at least, not if my goal is to avoid the costs.

And what are those costs? If I purchase one of these bulbs at a local store, it's going to cost me around $8 for a four-pack of the CFL equivalent of 100W bulbs. How much will the ones from FirstEnergy cost, especially because they say they're not making any money off the program, just recouping the costs?

Their website doesn't give an exact figure:

You will not see a separate charge for these bulbs on your bill. This CFL program is part of a larger energy efficiency program that is being mandated by state law. As part of this law, the utility is able to recover the costs of these programs through customer rates over a period of several years. However, the impact on your bill for this program will be minimal.

But this news report has the details:

The company, which bought the bulbs, said it would charge 60 cents per month on customer bills over three years, or about $21.60. The bulbs would be hand-ed out and the customers would be billed whether they wanted the bulbs or not.

Hmmm...if someone sends me something I did not order and I refuse to accept it, or try to return it, and they bill me anyway, I can seek relief through the courts. Ohio has specific laws to prevent me from being billed for items I did not order and do not want. Apparently, though, when lawmakers crafted this law, they missed the irony of the contradiction. Or perhaps they just thought it would be "good for us."

But let's look at the cost. They're going to charge me a total of 'about' $21.60 for two light bulbs when I can buy four for $8? That's 63% less if I get them myself! Yet this program is supposed to save me money?

The Public Utilities Commission of Ohio (PUCO), which regulates the rates these companies can charge, approved the program, though they are now saying they approved a plan with estimates, not the actual program. FirstEnergy said they submitted the plan to the PUCO and received approval of it on September 23rd.

Now, because of outrage over the program, the costs and the negative publicity, the whole thing has been put on hold.

Some are blaming FirstEnergy - but the real blame for this rests with our elected officials. Under Ohio law, FirstEnergy is required to get its customers to reduce energy consumption by 22.2% by the year 2025. Note that the company is the one required to make its customers reduce their usage. The government didn't require the purchasers of the product to make the cuts - but put the onus on the supplier of the product.

That's like telling Starbucks that people drink too much coffee and they need to get their customers to drink less. Is this not unrealistic and bordering upon 'insanity'?

So with the government telling a company that they need to reduce the sales of the products, the company's common sense reaction would be that such a law would also reduce their income.

That's okay, the PUCO and the state says. If you do a program that cuts energy use as we've mandated, we'll let you recoup the costs! See????

So what's included in such program costs? Well, obviously, the purchase of the bulbs and the shipping to get them to the company, and the distribution of the bulbs by the company they've hired to hand-deliver them.

But that's not all. According to numerous media reports quoting FirstEnergy spokesman Ellen Raines, the 'costs' they recoup include the amount to offset a loss in revenues for the expected lower electricity usage resulting from the energy-efficient lighting.

If you weren't convinced of the insanity of the program thus far, this should clinch the deal!

The 'logic' of our government is that a company should be forced by law to reduce the sale of their product in order to achieve some arbitrary target of 'energy savings' by their customers but will be allowed to charge those customers for what they would have paid prior to the energy-saving program - thus resulting in no real 'savings' at all.

There's even more to this story, though...

Other states have tried to implement similar programs, though they've used a coupon or voucher process to get people to switch bulbs. However, the general consensus of the group tasked with coming up with the plan said that too few people actually take advantage of the vouchers, thus limiting the amount of reduction in energy usage achieved.

This should tell the politicians and do-gooders something - namely, that customers don't want this product to the degree they want the customers to want it.

***SIDE NOTE: Sounds sort of like the failure of the Susan B. Anthony dollar and the $2 bill, but that's too relevant of an example and won't be mentioned by said politicians who are too busy trying to force us to do what they think is best for us, despite our own opinions.
***

So, because of the evidence that a voucher/coupon program wouldn't allow the company to achieve compliance with the law, the idea of distributing the actual bulbs was hatched.

But wait - there's more!

These bulbs are made in....CHINA!

According to the FirstEnergy FAQs:

At this time, compact fluorescent bulbs are not mass produced in the United States.


Insanity, I tell you! And certainly a qualifier for 'stuck on stupid' designation.

While this makes no sense to the 'average' Ohioan, an even scarier aspect is that many of the people who crafted, and will brag about, this law will get re-elected!

"[I]f the public are bound to yield obedience to laws to which they cannot give their approbation, they are slaves to those who make such laws and enforce them." ~ Candidus in the Boston Gazette, 1772

6 comments:

skeeter1107 said...

Excellent review! Great Post.

When I read through the various bills that are impressively stupid like this one is, I have to believe that there is something mentally wrong with these people. It's either due to glue sniffing or lead poisoning from drinking wine from lead chalices while dressed in togas at the Statehouse.

Perhaps it's a bit of both.

If it's not due to some chemically inspired debilitation, then it's an inability to think in a logical progression. Thinking it through from A through Z, you reach the conclusion that it is a bad idea. Instead, they seem to take great comfort and pride in a superficial thought process that stops at A.

Keep up the good work.

Maggie Thurber said...

Thanks, Skeeter, for the compliment...though I have to say that the image of our legislators in togas really isn't a good one! LOL!

Norma said...

Bulbs made in China in dirty coal burning factories!

I asked my husband to replace a burned out bulb in the laundry room, and he used a CFL, and I hardly noticed--from no bulb at all.

Great post, Maggie.

Tim Higgins said...

Maggie,

Thanks for the information and the great analysis. It appears that what we have here is a public utility company doing something that no one wants in order to fulfill an obligation created by new state laws that few knew existed (sounds like education actually).

The only thing that has managed to be proved however, is that neither the utility nor the state understand the law ... of unintended consequences. Go figure!

James said...

Excellent post, Maggie. Something we won't get from the daily paper or the TV station camera-preeners. Personally, I'm going to stockpile the old bulbs until I run out of them. I don't like the CFL lights. I tried them and they don't shine the light the way I like. They seem dull to me.

derwood said...

CFL bulbs do give off a different color of white than incandescent. They can be hard to get used to.

I don't know if Dayton Power and Light is in on this or not. I've seen ads in their bills about CFL bulbs, but I converted my whole house over to CFL over 2 years ago and have a stockpile of replacements on hand.

Dont need em or want em from my electricity supplier.

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