Allegheny light bulb surcharge nullified

January 16, 2008|By ANDREW SCHOTZ

BALTIMORE ? After absorbing pointed criticism from a state regulatory body Wednesday, Allegheny Power officials apologized and agreed to refund customers' money for a controversial light-bulb distribution.

"Allegheny Power ? Allegheny Power's shareholders ? will eat 100 percent of the cost of this program," said Jeffrey P. Trout, a senior attorney for the utility company.

The company will stop collecting a 96 cents-a-month energy conservation surcharge from residential customers in Maryland and will propose a way to refund money it already collected.

Under the program, which cost the company about $2.5 million, Allegheny sent two fluorescent, energy-saving bulbs to roughly 220,000 residential customers. A small portion of the money paid for an education campaign.


Allegheny's reversal came after hundreds of people complained, upset that the bulbs they received in the mail weren't free - they cost $11.52, divided into monthly payments. Many complaints came after a Jan. 7 Herald-Mail story pointed out the charge.

The Maryland Public Service Commission, which gave "fast-track" approval to the program in September 2007, summoned Allegheny officials to a hearing Wednesday, dissatisfied with how it was handled and the confusion that ensued.

Holding up a printed piece Allegheny used in the light-bulb program, PSC Chairman Steven B. Larsen said, "It certainly doesn't say what it's costing. So, it doesn't sound like you really listened to what we asked you to do."

PSC members also criticized what they described as confusing claims of energy savings, a bungled delivery effort, a failure to keep the PSC informed and incomplete guidelines on disposing of the bulbs, which contain mercury.

Allegheny officials acknowledged that they made mistakes.

"We, Allegheny, screwed up the implementation of this program," Trout said.

In a letter to Western Maryland legislators Tuesday, Allegheny Power President David Flitman also apologized, saying the company "accepts full responsibility for the customer confusion and delivery issues."

Del. Christopher B. Shank, R-Washington, one of eight Western Maryland lawmakers who testified Wednesday, objected to the program, calling the approach: "Here's your light bulbs, Soviet Union-style, screw 'em in and be happy about it."

Sen. Donald F. Munson, R-Washington, said the 13-watt bulbs, equivalent to 60-watt incandescent bulbs, don't provide enough light for reading.

Del. Robert A. McKee, R-Washington, said some customers already had compact fluorescent bulbs and some can't use them at all.

Del. Kevin Kelly, D-Allegany, called Allegheny "deceitful and arrogant."

Kelly is planning to file a bill to prevent the PSC from approving a similar program again.

It's unclear if the bill would affect conservation programs the PSC already approved for other electric companies in the state.

PSC and Allegheny officials said they remain committed to energy conservation efforts.

But Paula Carmody, Maryland's People's Counsel, a utility advocate for the public, said Allegheny's mistakes might make it tougher to win over the public next time.

The Maryland Public Service Commission on Wednesday accepted the following plan by Allegheny Power to make up for mistakes in its light-bulb distribution.:

· Stop collecting an energy conservation surcharge of $11.52, or 96 cents a month.

· Submit to the PSC a plan to refund money collected for the surcharge, which went into effect Oct. 3.

· Run a full-page ad in newspapers in Allegheny's service area, explaining what happened.

· Work with the PSC and the Maryland Energy Administration on a way for customers to safely dispose of the light bulbs, which contain mercury.

· Let customers who received the bulbs, even extra bulbs by accident, keep them at no charge.

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