Congressman Dennis Kucinich (D-OH) today sent a letter to the Chairman of the Public Utilities Commission of Ohio (PUCO), Mr. Alan Schriber, expressing his opposition to FirstEnergy’s forced sale of light bulbs to consumers.  PUCO is expected to begin hearing oral arguments tomorrow in a rehearing of FirstEnergy’s plan, which had been previously approved by the Commission.

“FirstEnergy’s program is unfair, deceptive and injurious to consumers.  FirstEnergy’s program is anti-competitive.  And FirstEnergy’s program is bad public policy,” writes Kucinich in the letter.

The full text of the letter follows:

October 27, 2009

Mr. Alan R. Schriber

Chairman

Public Utilities Commission of Ohio

180 East Broad Street

Columbus, Ohio  43215

Dear Chairman Schriber:

     On Wednesday, FirstEnergy will ask the Public Utilities Commission for approval to resume FirstEnergy’s overpriced and anti-competitive forced sale of two light bulbs to every household in Northern Ohio.  The Commission should refuse the request.  FirstEnergy’s program is unfair, deceptive and injurious to consumers.  FirstEnergy’s program is anti-competitive.  And FirstEnergy’s program is bad public policy.

     On October 6, FirstEnergy publicly announced that it was going to deliver two compact fluorescent light bulbs (CFLs) to every residence it serves.  FirstEnergy also announced that it was going to add $7.20 per year to the electric bills of those consumers to force them to pay for what FirstEnergy claims to be: 1) the cost of the two CFLs, 2) the cost of distributing the two CFLs, and 3) the value of the electricity that those consumers will not be using as a result of the energy efficiency of those CFLs. 

     FirstEnergy’s program is unfair, deceptive and injurious to consumers.  FirstEnergy wants to force its customers to pay far more for these two CFLs than those consumers would pay to purchase them in the marketplace.  FirstEnergy wants to force its customers to pay for the cost of distributing these CFLs, a cost that would not exist if consumers bought the CFLs themselves.  FirstEnergy wants to force its customers to buy these two CFLs even if those consumers have already replaced all their incandescent bulbs with CFLs.  FirstEnergy wants to force its customers to buy these two CFLs even if they are not appropriate for the lights in their homes.  FirstEnergy wants to force its customers to buy these CFLs even if they are not going to use them.  And, incredibly, FirstEnergy actually wants to charge those customers for the cost of the electricity they will not be using as a result of the greater efficiency of these CFLs over the light bulbs those customers are currently using.  

     FirstEnergy purports to justify this unfair, deceptive and injurious program as its effort to comply with a state energy-efficiency law that requires utilities to cut their customers’ energy use by 22 percent by 2025.  However, other utilities in Ohio chose to accomplish the same result by means that were not anti-competitive, that were not unfair to consumers and that did not result in a forced sale of overpriced products.  Those utilities arranged with retailers to provide coupons or discounts that consumers could use to purchase the CFLs of their choice at the best price they could find.  

     That kind of competitive, marketplace solution was apparently unacceptable to First Energy.  Instead, FirstEnergy is trying to leverage its monopoly power to force consumers to buy 3.75 million CFLs from FirstEnergy.  Those consumers, who have no choice in their purchase of electricity (unless they live in a neighborhood that is also served by Cleveland Public Power), and must buy it from FirstEnergy, will have no choice and will have to buy two CFLs from FirstEnergy also.  In addition, FirstEnergy is attempting to leverage its monopoly power even further, by providing its customers with information that will direct them to FirstEnergy itself, rather than the competitive marketplace, to order additional CFLs.  

     This conduct is anti-competitive.  It will reduce competition in the sale of CFLs.  And it has no reasonable business justification.  Compared to the alternative used by the other utilities in Ohio, it serves only to leverage FirstEnergy’s monopoly power and extend it into the sale of CFLs.

     FirstEnergy’s program is also bad public policy.  It will actually work against the policy that the Ohio energy-efficiency statute is attempting to accomplish.  The utilities that have provided their customers with coupons, or that have negotiated discounts from retailers, are empowering their customers to buy CFLs for their entire home and to purchase CFLs that are appropriate for their home and their lighting fixtures.  FirstEnergy is distributing only two CFLs per household, with no concern for whether those light bulbs are appropriate, or even needed, for the homes to which they are being delivered.  If consumers can’t use that size CFL in their homes, FirstEnergy has nothing to say to them other than “We’re sorry,” and directs them to FirstEnergy’s online store to buy more CFLs from FirstEnergy that are appropriate for their homes.   

     Customers of other Ohio utilities, who use their coupons or discounts to buy CFLs, will see an immediate reduction in their electric bills as a result of the increased efficiency of those CFLs.  That saving should inspire them to buy more CFLs or to install more energy-saving features in their homes.  FirstEnergy customers who use their two CFLs will not see any reduction for three years.  Instead, their electric bills will go up.

     If we want to increase the efficiency of our use of energy, and to achieve energy independence for our country, we have to make energy efficiency a positive experience for consumers, not a negative one.  Giving consumers coupons or discounts, and allowing them to buy the CFLs they need, at the best price they can find, is a positive experience.  Forcing them to buy CFLs they don’t want or don’t need, at a price that is way above the market price, is a negative experience.  If the CFLs distributed by First Energy are not high-quality, if they flicker or burn out early, if the color or brightness of the light is not satisfactory, that will reinforce the negativity of the experience and discourage consumers from buying any more.  FirstEnergy’s proposal makes one wonder whether FirstEnergy is trying to encourage energy efficiency or discourage it, especially since any reduction of energy use will reduce FirstEnergy’s revenues and its profits.  

     Clearly, the coupon/discount alternative is more consistent with the policy articulated and expressed by the Ohio energy-efficiency statute.  It also allows consumers to buy the light bulbs they need, at lower prices, in the competitive marketplace.  The only interest that is served by the FirstEnergy program is the interest of FirstEnergy’s profits.

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