FirstEnergy pledges support for efficiency, conservation

Support for Pennsylvania's new energy law, including development of appropriate efficiency and demand-side management programs and the importance of coordination among state agencies to implement these programs, were just some of the ideas presented by FirstEnergy's John E. Paganie, vice president of Energy Efficiency, when he testified at a special hearing of the Pennsylvania Public Utility Commission (PUC).

He testified on behalf of FirstEnergy's three Pennsylvania operating companies — Pennsylvania Power Co. (Penn Power), Pennsylvania Electric Company (Penelec), and Metropolitan Edison Company (Met-Ed) — which serve 1.3 million customers in the Commonwealth.

"We look forward to working with the PUC in our effort to achieve Act 129's aggressive energy efficiency and demand targets in a cost effective manner, while maintaining the financial integrity of our electric companies in Pennsylvania," said Paganie.

Paganie says FirstEnergy currently offers customers a number of energy efficiency, conservation, and demand side response programs to help them get more from their energy dollars, and encourage the smart use of electricity. However, the scope and effectiveness of these existing programs have been limited because the long-standing generation rate caps at Penelec and Met-Ed have reduced the customers' motivation to conserve.

Currently, FirstEnergy's Pennsylvania customers pay electricity rates below the national average — and when adjusted for inflation, customers are paying less for electricity today than they did in much of the previous decade.

Paganie added that true market price signals will be needed to change customer usage habits. However, these pricing signals will not be in effect for Met-Ed and Penelec until January 1, 2011, only five months before the aggressive reductions in electricity usage called for in Act 129 must be achieved.

To help overcome the challenges inherent in Act 129's ambitious compliance schedule, Paganie suggested the PUC focus its efforts in three key areas:

• Adoption of a timely, flexible and effective process to review and approve the energy efficiency and conservation plans proposed by the state's electric distribution companies, along with full and current cost recovery. The sooner the programs start, the more likely the required targets will be achieved.

• Ensure any new programs are coordinated with existing energy efficiency programs now offered by other Pennsylvania state agencies, including the Pennsylvania Department of Environmental Protection, the Department of Public Welfare, the Treasury Department and the Department of Community and Economic Development.

• Increase education efforts to help achieve a meaningful and measurable shift in customer behavior. Education should be an essential part of future efforts to help consumers better manage their electricity use and costs.

Together, Penn Power, Penelec and Met-Ed serve approximately 1.3 million customers in 49 of 67 counties, covering nearly half the land area of Pennsylvania.