Strengthen FirstEnergy's Plan

Take Action!!  The Public Service Commission is considering approving a very weak energy efficiency plan from FirstEnergy, one that could lock customers into five years of poor energy efficiency programs and lost opportunities for savings.

FirstEnergy recently merged with Allegheny Power to become the utility serving all of northern and eastern West Virginia. Its subsidiary companies in West Virginia are Mon Power and Potomac Edison. As part of the merger, FirstEnergy agreed to start offering energy efficiency and demand response programs to its West Virginia customers. In March, FirstEnergy proposed its energy efficiency and demand response plan and is now seeking approval from the Public Service Commission.

Energy efficiency programs provide ways for customers to save energy and money.  Reducing the demand for electricity reduces the need for utilities to raise rates to cover the cost of building expensive new power plants.  Efficiency programs also offer participating customers the opportunity to directly reduce their energy use and save on their bills. Demand response refers to programs which are specifically targeted to reduce electricity use during hours of peak demand – this saves money for customers because these are the hours when wholesale electricity prices, which get passed on to customers in rates, are highest.

FirstEnergy and Allegheny Power have a track record of opposing energy efficiency and instead promoting costly projects to increase their own sales at the expense of their customers. In Ohio, which has a requirement for its utilities to save a certain percentage of sales each year, FirstEnergy is the worst-performing company in meeting these targets. In West Virginia, Allegheny promoted the unnecessary PATH power line project to transmit additional coal-fired electricity produced in West Virginia to customers in NJ, at the expense of its West Virginia customers. 

FirstEnergy is living up to its poor reputation with the energy efficiency and demand response plan that it has proposed for West Virginia. FirstEnergy is proposing to save only 0.5% of its 2009 sales and 0.5% of 2009 peak demand over five years. Contrast this to Pennsylvania, where FirstEnergy is being required to reduce peak demand 4.5% in less than five years – that is 10 times more ambitious than what they've proposed in WV. And in Ohio, utilities were required to achieve 0.8% energy savings over two years and most utilities (not including FirstEnergy) have met and exceeded these annually increasing targets. States with the best energy efficiency programs are saving 1-2% of sales per year – up to 20 times what FirstEnergy has proposed to do here. In other states, utilities are offering programs to help people finance home energy improvements that are saving 25-30% on their utility bills. 

FirstEnergy's proposal for West Virginia includes only two programs: a high-efficiency commercial and industrial lighting program and a low-income residential program. The low-income program involves only a walk-through energy audit of peoples' homes, with installation of basic measures like compact fluorescent lights and faucet aerators – in other words, despite the pervasive need for comprehensive low-income weatherization services, FirstEnergy is proposing a program that would only save people a few percent on their utility bills. FirstEnergy has also inflated the costs of its meager program by asking to collect “lost revenues.”  Because the costs of implementing the program will ultimately be passed on to utility customers, West Virginians will be paying for more than this program actually costs if the plan is approved in its current form.

By failing to make a serious investment in energy efficiency and demand response, FirstEnergy is hurting its West Virginia customers in the long run. FirstEnergy's residential rates in WV have increased 33% over the past 3 years.  And as FirstEnergy retires its oldest and most polluting coal plants over the coming decade, they will likely build expensive new natural gas plants and make their customers foot the bill – unless we demand otherwise. Investing in saving energy through energy efficiency and demand response is far cheaper than investing in new power plants. Saving energy through efficiency costs the average utility about 2.5-3 cents per kilowatt hour saved, compared to 7-10 cents to generate power from new gas-fired generators. By failing to propose an aggressive energy efficiency program, FirstEnergy is locking its customers into paying for additional expensive rate hikes and making it harder for people to reduce their home and business energy costs. 

Energy Efficient West Virginia has intervened before the Public Service Commission to argue that FirstEnergy needs to strengthen its program and offer West Virginians an energy efficiency and demand response program that is on par with what utilities in states around the country are doing.