[www.cleveland.com]
"FirstEnergy Corp. has spent millions of dollars more than it should have since late 2009 to comply with state renewable-energy mandates, two independent audits have found"
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I'm a fan of 'alternative' energy sources. Wind, solar, hydro... YEAH ! Good stuff ! But this case is a classic point of laws being put in place that don't necessarily make sense. The 'credit' system is obviously flawed. And utilities and utility commissions are in on the joke.

So.. how do you incentivise the construction and use of forward looking energy sources ? Recognizing full well that the energy from these sources is substantially more expensive than fossil and nuclear based sources ?

How does a government force investment in technologies that most of the US recognizes is critical to the long term survival of the nation ?

I'm actually not sure. I do know that when you create a 'trading' system like this, it's guaranteed to be 'gamed', and produce different results than the desired ones.

The problem has nothing to do with the law. The problem is the companies' incompetence--buying credits for much more than they should have paid. Perhaps the companies should invest instead in some solar and windmills--they would at least have something for their money.

Or amend the law so that RECs are not an option. Make the power companies invest in renewable energy. I would be in favor of that.

It seems difficult only because we don't want to do it.

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It's a shame when people who have been getting deeply subsidized energy are forced to pay the actual cost of the product. It's even worse when they only appreciate what deep a discount they've been getting thus far when they try to replace the subsidized product. It's a travesty when the 'actual price' product gets blamed for being 'too costly to work' because consumers are unwilling to recognize that the cost difference only exists because we don't pay 'actual price' for the subsidized product.

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rj
AKA
Vreemac, Moth of the Future

Quote
OP article
The audits found that the Illuminating Co., Ohio Edison and Toledo Edison relied on FirstEnergy Solutions, an unregulated affiliate, to buy credits from people and organizations that generate renewable energy.

And FES paid up to 15 times more for credits than the three local companies would have spent had they just paid the fines, a management audit by Exeter Associates of Columbia, Md., found. In fact, the cost of the credits was higher than credits anywhere in the country, before or since, the audit found.

That last sentence is where the real problem lies, with regulated companies who used an unregulated affiliate company in an attempt to transfer money off their books in a way to make a large profit elsewhere. Essentially they overcharged themselves and paid it back in a way to get outside their regulated PU status.

Perhaps the rolling back of the rate hikes as mentioned later in article will give them an incentive to do it right the next time.

Quote
Gutenberg
The problem has nothing to do with the law. The problem is the companies' incompetence--buying credits for much more than they should have paid.

They created a subsidiary affiliate, racked up the prices at the unregulated subsidiary and effectively paid themselves a high rate, passing the "expense" on to their customers.

'Sounds to me like the regulators are the incompetent ones.



Edited 1 time(s). Last edit at 08/17/2012 06:28PM by Chakravartin.

>>It's a shame when people who have been getting deeply subsidized energy are forced to pay the actual cost of the product.<<

How is my electricity usage "deeply" subsidized? And please don't tell me trucks PECO drives use roads and bridges or their drives went to public school.

Quote
Avenger
>>It's a shame when people who have been getting deeply subsidized energy are forced to pay the actual cost of the product.<<

How is my electricity usage "deeply" subsidized? And please don't tell me trucks PECO drives use roads and bridges or their drives went to public school.

Through the carbon-energy industry's ability to sell electricity without paying the cost of environmental damage done through fossil fuel extraction and consumption.

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rj
AKA
Vreemac, Moth of the Future

That is a made up charge. Nobody can quantify that sort of "environmental damage". At least we now know there are no subsidies as generally understood, thank you.

Quote
Avenger
That is a made up charge. Nobody can quantify that sort of "environmental damage". At least we now know there are no subsidies as generally understood, thank you.

The irony of your statement has eclipsed its content. So, no, thank you. I really needed a laugh today, and none could have been better served.

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rj
AKA
Vreemac, Moth of the Future

The laugh part is that you weren't able to come up with a single quantifiable subsidy. If there are any subsidies, they are those that the utilities pay to the government in taxes.