Question Of The Day: Why Are Our Leaders Attempting To Corrupt Our Free Markets For All Electric Households?

Submitted by Norm Roulet on Fri, 04/09/2010 - 17:49.

There can be no question Ohio has a dismal record on public policy and the environment - we are a national disaster. The Governor-appointed Public Utility Commission has failed to protect the public interests of citizens and has embarassed the citizens of the state in countless ways, most recently with matters surrounding an absurd light bulb subsidy program they divised with First Energy, report on realNEO here..."Let Me Introduce To You Five Public Servants Who Just Cost Citizens Of Unreal NEO Millions Of Dollars, While Poisoning Them".

Today, the Cleveland Plain Dealer reports energy policy in Ohio is moving from laughable to criminal... damn-well communist... announcing that "Governor pushes for permanent discounts on all-electric heating", leading off with the following:

Gov. Ted Strickland has intervened again in an electric-rate controversy that has embroiled FirstEnergy Corp. and state regulators for months, threatened home values and hurt the appeal of downtown apartments and condos.

The governor wants the Public Utilities Commission of Ohio to quickly restore rate discounts for every residential property that relies on electricity as its sole power source. And he wants the discounts put in place permanently, regardless of who owns the home or when it was purchased or leased.

In other words, the Governor of our state wants the majority of citizens who are struggling to heat their smart homes to subsidize the wasteful utility practices of a select group of citizens who have stupid homes. Their homes are stupid because they are inefficient and designed to be that way because the builders of the homes were for some reason convinced our planet may support bulding homes that are not energy efficient and cost effective in this region, and they convinced their customers that is smart, and that most citizens will be willing to subsidize such stupidity by paying high electric bills to make "special" customers' bills low.

The fact shown in this situation is that people should not live in typical all electric homes in Northeast Ohio, as their operating expenses are too high. If someone is to build or own an all electric home, they would be wise to invest in energy efficiency measures and warm clothes - alternative sources of heat, if possible - as they have a home that is not right for here.

Can anyone imagine a reason why the majority of citizens here should pay higher utilty bills to compensate for the stupidity of a few developers and builders and their "all electric" customers, who for some reason have chosen to own all electric homes that are not sensible for here?

Do you expect citizens to subsidize you if you make poor energy decisions?

Is that what our governor proposes citizens do by developing his limited wind pilot program on Lake Erie?

Does anyone feel this state is moving in the right directions when it comes to energy resource development, regulation and demand side management, at all?

Does anyone feel this state is moving in the right direction to protect our environment?

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Letter From Governor To Make Ohio Communist Forever

See PDF of Strickland letter asking his Public Utility Commission (he appointed) to provide discounts to some citizens, at the cost to all other citizens, because he says so - stupid commie government policy that must be stopped...

Does any other state offer some citizens discounts for being stupid, at additional expense to the smart?

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The reasons "Electric Customers" feel "entitled" to discount

This legal position is psychotic, yet appears to be working... from a website created to force the government to force some citizens to subsidize electricity bills for about 100,000 households for owners who want to waste fuel and ruin the environment, at everyone's expense... this is intimidation!

Where is the proof that the gas/electric customers have EVER subsidized the discounted rates offered to the all-electric customers?   Contrary to what First Energy is stating publicly, there is no proof that subsidies were ever charged by them. 

The discounted all electric rates were born in the mid 1970s when the electric companies heavily promoted the building of all electric homes to both home builders and consumers.  At the time, it was a wise business decision by the electric companies to increase their winter sales of electricity.  Since summer was their peak time and their electric plants were built to handle peak capacities, the winter months posed a problem for the electric companies who had to maintain high overhead costs during periods of low electricity sales. 

The solution was to dramatically increase their electricity sales in the winter time to offset their high overhead costs.  Realizing they needed to sell more electricity during the winter months, the electric companies heavily promoted the sales of all electric homes with the written promise of a quantity discounted all-electric rate that would last forever.  This plan helped the electric companies make more profit during off peak times to help pay their high overhead costs. 

The plan also helped the all-electric customer to heat their home for similar energy costs as the gas/electric user.  Additionally, the plan helped the gas/electric customer because First Energy did not need to raise the gas/electric customer’s rates to help offset their high overhead costs.  The all electric home program was a win-win-win solution for everyone involved.  

This was true for over 30 years under a regulated electricity market.  When Ohio approved the de-regulation of its electricity market in 1999 and changes began to be implemented in 2001, First Energy was able to sell its off-peak winter electricity on the grid for more money than it was charging its all-electric customer.  Thus, First Energy realized the all-electric customer was no longer needed or desired, and it began plans to eliminate the all-electric rate program.  In 2007, it stopped offering the all-electric rate program to new homeowners but grandfathered in current homeowners.  In 2009, First Energy completely eliminated the all-electric rate program for current homeowners too. 

By eliminating the all-electric rate program which was guaranteed in writing, First Energy has committed a breach of contract.   First Energy has used many creative tactics to justify this breach, such as trying to encourage conservation and the “unfairness” of the gas/electric users supposedly subsidizing the all-electric customer.   First Energy has yet to prove any of these reasons for eliminating the all-electric rate program.  The fact is that First Energy used the all-electric customer for as long as it benefited them, and then they simply dumped them!

First Energy is smart in trying to pit the gas/electric user against the all-electric user by falsely proclaiming that they have been charged more in the past in order to subsidize the all-electric rate.  First Energy has temporarily been ordered to continue selling to all-electric customers at the guaranteed discounted rate, and they now have a large dilemma on their hands!  The gas/electric users must realize that First Energy does indeed want to charge them more to make up the difference if they are forced to continue selling the all-electric customer power at the guaranteed discounted rate.  However, the gas/electric customer must also realize that they have not been charged more in the past to subsidize the all-electric rate program.

The idea of the quantity discount is widely accepted by consumers in all facets of business.  The consumer who buys 10 widgets does not complain that the customer who buys 100 widgets receives a lower per item price.   It is also a commonly accepted principle that the merchant accepts less profit per item on the products sold in quantity.  This is what First Energy has done for over 30 years until they decided it no longer benefited them.

First Energy must not be allowed to raise other customer’s rates to pay for their own breach of contract and poor business planning!  Instead, First Energy must pay for their mistake from stockholder profits!  First Energy has a recently established history of asking permission to charge consumers for their own business mistakes.  This is illustrated by their recent PUCO request to recoup over $700,000 from customers for their failed CFL distribution plan. 

If anyone still has doubts that the all-electric rate was being subsidized by others, then please research whose bills have gone down when the all-electric customer’s bills skyrocketed?  Likewise, if First Energy truly needed the extra income that they have enjoyed collecting from the all-electric customer since the discount was eliminated, then how can they possibly withstand the sudden loss of this income when the rates become reinstated in mid March?    The answer is that since First Energy is both the supplier and the distributor, it can artificially inflate its per kilowatt generation costs, and subsequently deflate the price on its internal books to cover the supposed “loss.”

First Energy must not be allowed to raise the rates of others simply to increase stockholder profits.  Furthermore, the media must stop reporting that the gas/electric customer has subsidized the all-electric customer because there is no evidence to prove this.

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Just so we all remember how PUCO math worked, at election time

Our Governor Strickland appointed Public Utilities Commission allows our monopoly utility company to make electric rates more fair for all customers, and a lawyer for "all electric customers" and his friends complain. They build a website and file a lawsuit - they are led by:

Citizens for Keeping the All-Electric Promise is a grassroots group of citizens who are fighting First Energy to keep the promises they made over 30 years ago to all-electric, load management, and water heating customers. 

As of March 2010, we number 1,500+ and growing every day!

The group's leadership consists of four private citizens, like yourself, who are all-electric customers:
 

  • Rich Jordan of Munson started the group in the fall of 2009 and was instrumental in getting Senator Grendell involved. 
  • Kevin Corcoran of North Ridgeville is an all-electric home owner and is the attorney for Bob Schmitt Homes, one of Ohio's largest builders of all-electric homes. 
  • Connie Kline is an all-electric home owner from Willoughby Hills and is a long time energy activist. 
  • Sue Steigerwald is an all-electric home owner in Kirtland and if facilitating the media and group newsletter contact. Contact Sue Steigerwald directly at sue2811 [at] roadrunner [dot] com

If you know Rich, Kevin, or Connie, please take the time to thank them for their countless hours spent working for us all!

Gee, thanks you guys... love the shitty environment you are creating here in Ohio!

Build me one of those smart Bob Schmitt ALL ELECTRIC HOMES you acknowledge are so stupid for all Ohioans.

The governor realizes most of those customers are represented by brutal, rich real estate developers and builders, who control lots of vote, so he decides to force the public utilities commission he controls to reduce rates for these "special" customers, seemingly just to protect votes. In the Plain Dealer it is reported:

"It is vital we support these urban development initiatives," Strickland wrote to Schriber. "They are critical to creating jobs and enhancing the quality of life for Ohioans."

In a telephone interview Friday, Schriber confirmed that he had received the letter.

"We will take care of it. We'll honor his request," he said.

In the PD coverage and a letter from Strickland there is a sob story about urban developments needing to be stupid and have subsidized electricity - and there is a list of stupid developments all citizens are now to help subsidize...

I bet we already help subsidize most of these urban developments, through all sorts of bonds and other government support given to their wealthy owners, who are certainly among those bitching to the Governor about PUCO hurting their wallets...

Who are these developers, besides big Bob Schmitt, who made their developments all electric and so such a burden on our society? They developed these projects they want us to subsidize further... do you really want to subsidize this stupidity and excess pollution... remember next elections!

All-electric residences in downtown Cleveland

The Downtown Cleveland Alliance, which represents property owners, has been researching electric use by residential buildings between West 10th and East 18th streets and between Front and Carnegie avenues.

Some downtown buildings contain all-electric units but do not rely solely on electricity. But a dozen buildings, comprising 1,131 apartments and condos, have been part of an all-electric rate plan, according to the alliance's research.

425 Lakeside, 57 apartments at 425 Lakeside Ave. W

Bridgeview Apartments, 247 units at 1300 W. Ninth St.

Marshall Place Apartments, 41 units at 1211 W. Ninth St.

National Terminal, 252 apartments at 1215 W. 10th St.

Perry Payne, 93 units at 740 W. Superior Ave.

Water Street, 100 apartments and condos at 1133 W. Ninth St.

Worthington Square, 54 apartments at 844 St. Clair Ave.

The Pointe at Gateway, 42 apartments and condos at 750 Prospect Ave.

Windsor Block, 52 apartments on East Fourth Street

WT Grant Loft Apartments, 73 units at 222 Euclid Ave.

Huron Square, 70 apartments at 1001 Huron Road

The Osborn, 50 apartments at 1001 Huron Road

Obvioulsy, everything about this situation is commie bullshit - the people elected a coward who will not protect free markets and rather has used his appointed political friends to saddle all citizens with subsidy for a few friends of the government, forever.

Welcome to the USSR of Ohio.

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Partially True

Norm,

When you get a chance, review SB 221.  It's a bill that requires, by law, efficiency improvement mandates by Ohio utilities.  I agree our politicians are spineless and have no backbone to stand up and defend the laws they require businesses to follow.  They are the first ones in line to blame the big bad corporation for recovering their costs incurred through foolish policies.  It's a win win for the politician looking for the next vote.  I also agree 100% our state is morphing into a version of the former USSR and the free market is under direct attack by the government, state and federal. 

 

Additionally, it was written in the Oracle's book, you control energy consumption when the price of energy is greater than an average person can afford....Al Gore.  That kook was right.  Drvie up prices and people conserve.  When our gas bill tripled in 2003 (through present day), I do not remember a group of people banding together and force the newly deregulated gas industry to return to the previous price structure. 

 

We pay for comfort in the United States, so when you take comfort away, or increase the cost to be comfortable through regulation, people get mad.

Your buddy,

Doug

Ohio’s vast reserves of high-sulfur coal

Thanks for pointing me to SB 221 - lots to review there... more thoughts later.

I hate utility analysis...

As far as I can see, the number 1 priority of SB 221 is burning as much high sulfer Ohio coal as possible...

The Ohio Coal Development Office — a program of OAQDA — co-funds the development and implementation of technologies that can use Ohio’s vast reserves of high-sulfur coal in an economical, environmentally sound manner.  Projects supported by OCDO are sought through public solicitations and requests-for-proposals.  Cost share is required.  OCDO typically supports projects ranging from applied research through commercial demonstration.  The program is currently undergoing its first-ever strategic planning process to determine the “next steps” in its evolution.

Where is the mandate to subsidize low efficiency lifestyles?

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