utility users shafted bigtime

[alocispepraluger102]

Couple's monthly bill soars with elimination of all-electric home discount

Linda Martz

News Journal

MANSFIELD —Melissa and Joe Dunlap got a rude surprise several weeks after moving into the house they rent on Elderberry Court.

Their February electricity bill from Ohio Edison totaled $629. Based on past bills for the house, they had expected to pay about $270 or $280 for that cold winter month.

The utility bill ushered in something they hadn’t heard about for FirstEnergy-affiliated utility companies: the elimination of longtime discounts on rates for all-electric homes.

Higher rates will affect people who purchase or rent electric-heated homes, or sign up for electric service after Jan. 1, 2007 — but not existing customers, who will be “grandfathered in” under the old discounted rates.

“I about fell over. That’s almost as much as our rent,” Melissa Dunlap said. “That was one of our questions when we moved in: How was the electric bill?”

Landlord Kurt Stimens helped the shocked couple by paying a portion of their February bill. He also offered them an opportunity to live in one of his other properties not heated by electricity.

“We’re not sure what we’re going to do,” Dunlap said. “We moved out of a house double the size of this, and we never had, between our gas and electric, that kind of bills with the two combined... We can’t afford this.”

Loss of discounted rates for electric-heated homes eventually could affect thousands of customers of FirstEnergy, which operates three subsidiaries in the state: Ohio Edison, Toledo Edison and Cleveland Electric Illuminating.

FirstEnergy spokesman Mark Durbin said people living in all-electric homes have enjoyed discounts since the 1970s, when the industry — wrestling with excess generation —tried encouraging customers to use more kilowatt hours. Ohio Edison and other utility companies offered low rates for all-electric residences as an incentive to use electric heating systems, he said.

Ohio Edison appears to have marketed the incentives more actively than other companies, Durbin said. “It was a popular program.”

But utility markets have changed, he said.

The rate change for new customers in electric-heated homes is one portion of a larger package of changes for FirstEnergy, as the result of the rate certainty plan approved by the Public Utilities Commission of Ohio.

New customers moving into electric-heated homes or apartments after Jan. 1 do face an increase, Durbin said. Those using 750 kilowatt hours a month would see their bills rise from $77.71 to $88.45, Durbin said. “That’s maybe a $10 or 11 difference.”

“They were getting a pretty good deal for a lot of years,” he said. “But when you look at the price of other fuels, those have risen dramatically in the last few years.”

Average monthly residential use of electricity in Ohio households, including the high-use winter and summer months, runs about 800 kilowatt hours per month, said Julie Daubenmire of the Public Utilities Commission of Ohio.

The bill for the all-electric house the Dunlaps live in showed an average monthly use of 2,343 KWH but 3,899 kilowatt hours in February when the average daily temperature was 16.

About 250,000 residential customers in the Ohio Edison territory live in electric-heated homes or apartments, Daubenmire said.

U.S. Census Bureau numbers show that 17.4 percent of households in Richland County are heated by electricity. Though that percentage is far lower than the 65.1 percent that rely on natural gas piped in by a utility company, it still amounts to nearly 9,000 electric-heated households.

Over the past several years, “I built 29 houses that are all-electric because Ohio Edison promised this lower rate,” Kurt Stimens said. “They promised it would be in forever. Then they destroyed it.”

Stimens said he added extra insulation to keep utility bills down.

He believes only a few area residents living in all-electric homes have an inkling how their bills will increase.

“Most apartments are all-electric,” he said. “It’s like the tip of the iceberg. There will be a lot more people squawking.”

Landlord Mike Barry said he has tenants in about 70 electric-heated units. So far, he hasn’t heard complaints about utility bills. “It’s getting warmer now, so we probably won’t hear until next year,” he said.

But if rates climb steeply, that’s unfair, Barry said. “They talked us all into going electric — then they switched it. It’s not right.”

Ryan Lippe of the Office of the Ohio Consumers’ Counsel said the agency, which at first opposed First Energy’s rate certainty plan, later said it would not actively oppose it if FirstEnergy agreed to create programs that could help the utility’s customers lower their bills.

The OCC is working with FirstEnergy to create programs that would include helping consumers bring energy auditors into their homes to recommend energy-saving changes, Lippe said.

Edited March 31, 2007 by alocispepraluger102

[The Magnificent Goldberg]

There's a fabulous utility scam over here.

A few years ago, British Gas was split up. British Gas retained ownership of the infrastructure - gas pipes - but the business of flogging gas to consumers was opened out to all comers, who buy gas contracts from holes in the ground and, if they have more customers can get bigger discounts.

The guy who used to run British Gas, who set all this up at the Government's orders (the Tories), left shortly before it was all going live and set up his own firm. He went to every housing estate builder and made them an offer they couldn't refuse. I don't know what it was but it must have been something like a guaranteee that the new firm would put in the gas pipes for the new estate at a price below that of British Gas. Because pretty well every one, including the ones who developed the estate where I now live, signed up for it.

The system is that British Gas gets paid for transmitting the sellers' gas and doesn't charge the consumers. But the new firm charges the sellers for transporting their gas over its, relatively short, pipelines, into all these new houses. So for a relatively small investment, this firm can charge what it likes FOR EVER. And the gas sellers pass the charge on to the consumers, of course. Unless, as in the case of the firm that we've picked, they're trying to get a competitive edge, and absorb those costs across all their customers. But I guess they'll stop doing it after a bit.

MG

[Jazzmoose]

Just another example of what a great deal privitization is for the consumer and how those who support it either don't give a rat's ass about people or are too greedy to see the big picture. It amazes me how some people can talk about how inefficient government is and how privitization is always the answer.

Okay, okay; I'll shut up and go to the politics forum...

[The Magnificent Goldberg]

Just another example of what a great deal privitization is for the consumer and how those who support it either don't give a rat's ass about people or are too greedy to see the big picture. It amazes me how some people can talk about how inefficient government is and how privitization is always the answer.

Okay, okay; I'll shut up and go to the politics forum...

Sometimes privatisation IS the answer. Sometimes, the answer is nationalisation. And it might depend a bit on exterior things, so the answer might be different in different countries.

MG