Office of the Ohio Consumers' Counsel

Consumers' Corner

SPRING 2015

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Competitive auctions are saving money for natural gas customers

boiling waterAt a time when Ohio's electric utilities are seeking re-regulation and subsidies from customers, natural gas utilities continue to show the benefits of using competitive markets to lower Ohioans' natural gas bills.

Customers who purchase their natural gas at the utility's "standard choice offer" are benefiting from some of the lowest prices since the competitive auctions began in 2006. In fact, customers will find that the standard choice offer has generally been lower than the rates of gas marketers.

There are two components to the price of natural gas that customers pay for the standard choice offer. One component is the cost of the natural gas commodity itself. The other component is the natural gas "adder," which is the cost for a supplier to deliver the gas to the natural gas utility. The competitive auction that established the adder price for Dominion East Ohio produced an extraordinarily good result for customers – an adder of a mere 2 cents per thousand cubic feet of natural gas (mcf). This reduced adder price (compared to the previous adder price) will save customers on Dominion's standard choice offer about $40 over the next year.

The new lower adder price became effective April 1, and will be in effect for a period of one year. When the adder price is combined with the monthly variable price for the natural gas itself, the two added together will appear on the customer's bill as the standard choice offer.

Five energy marketers were successful in the auction. They won the right to supply natural gas through Dominion's pipelines to customers on the standard choice offer, for a period of 12 months.

The Office of the Ohio Consumers' Counsel (OCC) provides information to help Ohioans make wise choices for saving money on their natural gas and electric bills. This information includes a series of YouTube videos that can be viewed on OCC's website at www.occ.ohio.gov/education/videos.shtml.

Consumers should review all of their options and ask questions, before signing a contract with an energy marketer. OCC publishes a fact sheet that compares offers from energy marketers to the price of a utility's standard choice offer. This information will help consumers make smart energy choices. Visit www.occ.ohio.gov/gas/choice.shtml for price comparison information.

By Scott Gerfen


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AEP, Duke and FirstEnergy ask customers to assure profits for deregulated power plants

A goal of the Office of the Ohio Consumers' Counsel (OCC) is for Ohioans to save money from the low prices in the competitive energy market.

In 1999, the Ohio General Assembly passed Senate Bill 3 to transform the state from regulated rates to market-based electric generation pricing. That change provided Ohio consumers with the option of selecting an alternative electric supplier.

In the past year, the utilities of American Electric Power (AEP), Duke Energy Ohio, and FirstEnergy have sought protection from the market forces of competition. They asked the PUCO to approve long-term agreements that would guarantee profits for deregulated power plants at the consumers' expense.

These so-called "Power Purchase Agreements" would have consumers paying their electric utilities even more for the transition to competition. These payments would occur even though consumers have already paid billions during the shift from regulated power plants to deregulated generation under the 1999 law. These proposals are anti-competitive and will result in consumers paying much more for subsidies that would delay and weaken the ability of markets to perform for the benefit of consumers.

In the cases, the Consumers' Counsel recommended protecting customers from paying these subsidies to companies that have already been paid to transition to a competitive market.

In separate rulings, the Public Utilities Commission of Ohio (PUCO) rejected requests from AEP and Duke to charge customers for purchase power agreements. AEP's proposal was denied on February 25 and Duke's request was rejected on April 2. The decisions noted that the proposals did not prove that customers would receive a net benefit. Nonetheless, the PUCO gave guidance to the utilities to allow them to make future applications for purchase power arrangements.

A hearing in FirstEnergy's case is scheduled to be held in June. OCC filed expert testimony that said FirstEnergy's proposal could cost customers more than $3 billion over the 15-year period of the agreement.

The electric utilities' proposals for more charges come at a time when residential Ohio customers paid higher rates, on average, than consumers paid in 32 other states in 2014. This information is from the U.S. Energy Information Administration. Ohio's electric utilities want the protection of more government regulation. But Ohio consumers need the protection of more competition to lower their electric bills.

By Scott Gerfen


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Be bright about light bulbs

For more than 130 years, we relied on the incandescent light bulb of Thomas Edison. There were the old standbys –100-watts, 75-watts, 60-watts, 40-watts and so on. Each produced light by heating a wire filament to a high temperature. That was until Congress passed the Energy Independence and Security Act of 2007 (EISA), which ushered in a new era of longer-lasting, energy efficient bulbs.

chartThe change in the law has brought bulbs of different shapes, sizes, prices, and technologies to the lighting aisle at the store. Some shoppers may be confused about what to buy.

Besides the numerous options, there are symbols and terms (LED, CFL, lumens) to interpret. What kinds of bulbs are available?

Light-Emitting Diodes (LEDs)
LEDs use a fraction of the electricity required to power an incandescent bulb. That means LEDs are more cost-effective over a longer period of time. A quality LED bulb can last 25 times longer than an incandescent bulb and use 75 percent less energy. Unlike Compact Fluorescent light bulbs, LEDs contain no mercury. The average cost is $5 to $25 per bulb, with an average life expectancy of 20,000 hours. The LED bulb can last for decades compared to the year or so consumers would typically get with an incandescent. LEDs do not "burn out" like an incandescent bulb. They gradually grow dimmer over time. Some manufacturers of LEDs even offer multiyear warranties.

Compact Fluorescent Light Bulbs (CFLs)
CFLs use between one-fifth and one-third the energy of incandescent bulbs. The average cost is $2 to $20 per bulb, with an average life expectancy of 10,000 hours. A CFL needs more energy when it is first turned on and can take a second or two to brighten. The life of a CFL is significantly shorter if it is frequently turned on and off, so you will want to use CFLs especially for lighting that is kept on for longer periods of time. Consumers also should note that some CFLs are not meant for outdoor use. Some CFLs will not work in colder temperatures. CFLs do contain trace amounts of mercury so they should be disposed of properly.

Halogens
Halogens are similar to incandescent bulbs with the exception of having halogen gas trapped inside the glass with a filament. The average cost is $2 to $15 per bulb, with an average life expectancy of 1,000 hours. Halogens can provide a compromise for consumers who wish to replace their incandescent bulbs, but aren't ready to purchase LEDs or CFLs.

Incandescents
There is a misconception that incandescent bulbs have been banned by the Federal government. That isn't the case. However, they must be more efficient in order to be on the market. Some manufacturers are attempting to produce an incandescent bulb that can meet the standards set by the 2007 law.

To this end, the Federal Trade Commission requires light bulb manufacturers to place a "Lighting Facts" label on product packaging. These facts estimate the yearly cost of using the light bulb, its brightness (lumens instead of watts) and color temperature. For comparison, you would need at least 800 lumens to match the brightness of a 60-watt incandescent bulb and 1,100 lumens to replace a 75-watt bulb.

Sources: U.S. Department of Energy, cnet.com

By Scott Gerfen


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Farmer, firefighter and friend to consumers: OCC Board Member Stuart Young

Stuart YoungConsumers' Counsel Board Member Stuart Young is a busy man whose work begins (but doesn't end) with being a third-generation dairy farmer in western Ohio. He and his family have found the right formula for a family business that combines dairy farming with farm-related family entertainment. (Did we mention his family's ice cream?)

The history of Young's Jersey Dairy in Yellow Springs dates back to just after the Civil War. Then, relatives of the Young family built the "red" barn on 55 acres. Today, the farm operation totals 250 acres with 50 jersey cows in Clark county. There are at least a dozen Young family members who contribute to the operation.

His work as a family farmer also provided Mr. Young with the chance to serve Ohio's residential utility consumers, as a member of the Ohio Consumers' Counsel Governing Board. Family farmers are one of the three groups from which members are appointed to the Board. The other two groups are consumers and labor. Ohio Attorney General Mike DeWine appointed Mr. Young to the Board in 2012.

"Farmers are full-time consumers ourselves," Mr. Young said. "Working with suppliers and negotiating deals is right up our alley."

Mr. Young's public service extends beyond his Board membership.

For more than 30 years, he has been a firefighter with the Hustead Volunteer Fire Department. He also served as president of the Clark County Farm Bureau and has been a member of its Board of Directors for eight years. He served on the Ohio Farm Bureau's State Policy Development Committee and the Clark County Rural Zoning Commission. He is a lifelong member of the American Jersey Cattle Association.

"I've been on other boards, grassroots organizations, where we serve the members and that experience sets you up to do other things," Mr. Young said. "I was representing members — constituents. Not much different than what I'm doing on the Consumers' Counsel Board."

We, the staff of the Ohio Consumers' Counsel, and the Ohioans we serve are very fortunate to have guidance in our work from Mr. Young and his Board colleagues. We are grateful that Mr. Young volunteers his time on the Board to help Ohio's residential utility consumers.

By Sydney Gale and Kristin Gramza


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line workers

Tips on how to weather the storm season

The storm season is here. With the long-duration power outages in recent years, being prepared for a loss of electricity is essential to withstanding severe storms.

When consumers suffer a power outage, it is important to first report it to the local electric utility. During widespread outages, it may take several minutes before you will be able to talk directly to a company representative. (Customers using digital or VoIP phone service should check in advance whether their service can work during loss of electric service.) If you cannot get through to an electric company representative, you should be able to report the outage through the company's automated telephone system, website or smartphone app.

Next, consumers should unplug all major appliances that are power sensitive, such as computers, stereos and televisions. This action will protect these items from a possible power surge when the power comes back on.

Members of every Ohio household should assemble a storm kit. The storm kit should include a three-day supply of non-perishable food and water (one gallon per person per day); a charged cell phone, tablet or laptop with a backup power supply; a battery-operated radio or television; a flashlight and extra batteries; and a manual can opener for food (if the kit contains canned food).

One option to help withstand a lengthy outage is a back-up generator. However, there are a number of things to consider before purchasing a generator. Considerations include how much wattage is needed to power essential appliances in your home, the type of fuel needed to operate it and the length of time it can run.

Safety is also very important in operating a generator, whether it is portable or whole home. Carefully review the generator's operating instructions to protect yourself and the safety of others. Instructions could include informing the utility that you are operating a generator, to prevent possible injury to repair crews.

The number one safety rule is that generators must always be operated outdoors and away from doors, windows and vents. If proper use of a generator is disregarded, it may result in accumulating carbon monoxide, a colorless, odorless gas that can be fatal. According to the Consumer Product Safety Commission, carbon monoxide poisoning causes an annual average of 81 deaths in the United States.

Power is a necessity for individuals who rely on life support devices, such as respirators, ventilators or other medical equipment. There are a few steps these consumers can take to limit the duration of a power outage.

Those individuals with life support needs can notify their electric utilities to be added to their critical customer list. The list helps ensure the utility is informed about special needs that you may have in your home and can help the utility prioritize restoration efforts. By law, utilities are required to maintain and update their list of critical customers annually.

Being on this list will not guarantee that power will be restored immediately. Customers with life support needs should always have an emergency plan. The plan should include a contact list of family or friends, an emergency supply of oxygen, a battery-powered radio, a flashlight, a landline or cell phone and a place to go until power is restored.

The loss of electricity also creates financial hardships for consumers who must find alternative housing arrangements, replace spoiled food or are unable to work during an outage.

Currently, there is no requirement for utilities to compensate customers for these financial hardships; however, some homeowner policies might be able to compensate customers for portions of their loss. Also, customers should not expect to receive a credit on their bill for the time their service is out.

Power outages can be an inconvenience or worse (such as a safety hazard). Consumers can withstand outages by keeping informed. OCC offers a variety of informational materials on its website (www.occ.ohio.gov) to ensure that consumers are educated and prepared to weather the storm.

By Sydney Gale and Kristin Gramza


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Summer Crisis Program assists low-income Ohioans

Ohio's hot and humid summer days can be especially challenging for seniors and those with serious health conditions.

The Summer Crisis Program is a resource available to help defray electricity costs for certain income-eligible Ohioans. It is administered through the Ohio Development Services Agency (ODSA). Typically, the program operates from July 1 to August 31.

The program's eligibility guidelines vary year to year, depending on needs and the availability of funds. Generally, it provides eligible customers with a one-time financial benefit towards the electric bill and/or purchase of fans and air conditioners. The Program uses funds from the federal Low Income Home Energy Assistance Program (LIHEAP) and/ or other available sources. The Summer Crisis Program is typically available for customers of investor-owned utilities, municipal utilities and rural electric cooperatives. The availability of assistance is based on individual customer needs and other assistance programs in which customers may be participating.

Last year, households with a gross annual income at or below 175 percent of the federal poverty guidelines were eligible for assistance. The program has also included eligibility for households with a member in the home who is at least 60 years of age or has health concerns documented by a physician. Check with your local Community Action Agency for specific criteria this year.

To apply, consumers should contact their local assistance agency, such as their county Community Action Agency. Find a local agency at http://development.ohio.gov/is/is_heapsummer.htm or by calling ODSA at 1-800-282-0880. For additional information about available assistance programs, consumers can visit www.occ.ohio.gov/publications/factsheets-assistance.shtml.

By Sydney Gale and Kristin Gramza


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youtube
Consumers' Counsel launches YouTube channel

The Office of the Ohio Consumers' Counsel (OCC) recently launched its YouTube channel. The channel extends the agency's educational efforts through social media.

OCC strives to help residential utility consumers make wise choices and save money on their utility bills. OCC has produced a collection of three short videos to quickly educate consumers on their energy choices.

To view the educational videos, visit OCC's website at www.occ.ohio.gov/education/videos.shtml. There, you can also access informational factsheets, quarterly newsletters and a request form for our free speakers bureau.

By Sydney Gale and Kristin Gramza

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QR CodeOCC Speaker Request

Representatives from OCC can speak to your group about a variety of utility issues, including consumer protections, payment assistance, electric and natural gas choice and more!

For a complete list of topics, visit: www.occ.ohio.gov/education/speaker.shtml. To request a speaker, go to www.occ.ohio.gov/contact/sbform.php.

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