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Watt happened?

Filing sheds light on Allegheny PowerâEUR(TM)s light-bulb mailing

Filing sheds light on Allegheny PowerâEUR(TM)s light-bulb mailing

January 12, 2008|By ANDREW SCHOTZ

WASHINGTON COUNTY ? Allegheny Power's Sept. 14, 2007, filing to the Maryland Public Service Commission sheds light on its recent light-bulb mailing.

Allegheny:

· Planned to send a two-pack of compact fluorescent light, or CFL, bulbs to each of its approximately 220,000 residential customers in Maryland in "the fourth quarter of 2007." Another batch would be mailed six months later, to reach people new to the area since the first mailing.

· Estimated costs of $2,405,600 for the bulbs and the mailing, which were to be administered by a third party, and $96,000 for an energy education effort.

· Said it would charge each customer $11.52, or 96 cents per month for one year, to cover the $2,501,600 total cost.

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· Predicted more than $4 million in net energy savings and environmental benefits over six years. A customer could save at least $30 in electricity costs with a CFL bulb instead of a typical incandescent bulb, based on four hours of use per day, the filing says.

Allegheny's program mirrors efforts by other Maryland energy suppliers, who instead offered discounts to customers who bought their own bulbs.

Allegheny's customers were sent bulbs directly, which was seen as a more expensive, but more effective, way to steer the public toward energy conservation measures.

"The cost of hiring an implementation contractor to process the mailing of two CFL's to each Allegheny customer will cost about $5.46 per bulb," Walter Auburn, the assistant director of the Maryland Energy Administration, wrote in a letter of support. "Although this is a somewhat high cost per bulb the program is attempting to change the purchasing behavior of approximately 220,000 customers in a short period of time."

Allegheny, which serves Western Maryland, understandably wouldn't copy other utilities' efforts exactly, Auburn added, because "the more rural character of the utility service area requires a different approach."

Among the cost-and-benefit analyses and the crunched numbers, Allegheny's filing doesn't specifically say whether and how it would connect the dots for customers: The swirly bulbs that soon would appear in their mailboxes were connected to the new monthly energy surcharge.

Thousands of light bulbs

On Sept. 26, the Public Service Commission approved the light-bulb and education programs on a "fast track," so they could go into effect right away.

On October bills, Allegheny's explanation, with no mention of light bulbs, was: "Effective October 3, 2007, an Energy Conservation Surcharge will be applied to all residential customer bills."

Packages of Earthbrite 13-watt bulbs, equivalent to incandescent 60-watt bulbs, were mailed several weeks later. Post offices in Washington County reported receiving skids of tens of thousands of light-bulb packages in December, creating headaches during the Christmas season.

A Herald-Mail story on Monday, explaining that the bulbs were not free, sparked backlash among readers and state legislators. Starting that day, the PSC received "a high volume of complaints," according to a letter it sent to Allegheny last week.

Numerous people who complained in calls and e-mails to The Herald-Mail protested the surcharge, wondered if Allegheny had violated a federal law against sending unsolicited merchandise and said similar bulbs are less expensive in stores.

Niagara Conservation Corp., which supplied the bulbs, advertises them online for $5 apiece.

Other types are available ? some more expensive, some less expensive. Wal-Mart's Web site advertises a six-pack of a different brand of 13-watt bulbs for $9.88.

The story picked up more traction the next day in Cumberland, Md., where the Times-News wrote about it.

Two state lawmakers ? Del. Kevin Kelly, D-Allegany, and Del. Christopher B. Shank, R-Washington ? pledged to work on bills counteracting the bulb distribution program and the PSC's approval.

On Wednesday, the PSC directed Allegheny to attend a meeting this week about the light-bulb program.

The next day, an Allegheny representative met privately in Annapolis with several Western Maryland legislators. Shank said the group demanded that Allegheny refund customers' money and swallow the cost of the program.

Allegheny spokesman Todd Meyers has said "there might have been an oversight" in not explaining to customers the link between the surcharge and the bulbs.

'Botched implementation'

The PSC's letter expresses its dissatisfaction.

It says the bulbs were to be delivered to homes by FedEx in "October/November 2007," and asks why they were mailed instead.

The PSC told Allegheny to submit several items, by Monday, including copies of the contract with the vendor that developed and carried out the program.

The PSC also called for copies of notices and bill inserts sent to customers.

"The Commission is particularly interested in how (Allegheny) communicated to its customers the fact that they would be receiving CFL bulbs, the purpose of the bulbs, and the cost and savings associated with the CFL Program," the letter says.

Allegheny is scheduled to appear before the PSC on Wednesday in Baltimore.

The bulbs reached Washington County around the time President Bush signed an energy bill that includes a goal of effectively phasing out incandescent bulbs.

In a press release, Johanna Neumann of the Maryland Public Interest Research Group cautioned that Allegheny's "botched implementation" shouldn't be held against utilities' broad energy efficiency efforts.

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