Trust them?

This story courtesy of Progressive Pulse and Adam Searing.

Yesterday my wife and I got a letter only for “select Duke Energy customers” letting us know the exciting news that we were now eligible to enroll in their convenient “Fixed Payment Plan.”

If you weren’t selected for this honor too, here’s the pitch: You can pay a fixed amount every month for your electric bill based on the average of your energy use. Presumably, when you crank the AC in August you don’t see a $150 bill.

Sounds good? But wait – you need to read farther down. Turns out, “you may pay up to ten percent more than you would have paid under your standard rate schedule plus a $1 monthly administrative fee.” Somehow, you’ve got to respect the corporate gall to demand a $1 a month charge for paying exactly the same monthly bill but at a higher amount. Not even Tony Soprano would charge you extra to pay more.

This is the same Duke Power that wants North Carolinians to trust them to build a shiny new carbon-factory at Cliffside, with gushing promises that someday, somehow they'll eventually offset their toxic emissions.

Where the heck is the Public Utilities Commission? Surely unapologetic scamming of citizen ratepayers isn't legal in North Carolina, is it?

Comments

One of the screwdrivers

will be on WUNC at noon tomorrow, according to Steve Harrison.

Call in and ask WTF?

Another thing I hate about these "plans" is

how they discourage energy efficiency behavior by customers. People need to see results of their attempts to reduce their usage, and they need to see those results quickly.

If your usage is only calculated on an annual basis (which is how they do this), there is a natural tendency to postpone addressing your behavior until some later date, which is exactly the opposite of what we need to be doing.

I've been on the equal payment plan for years

I like the budget options of this, but I didn't notice a surcharge on my letter, although my monthly amount went up from 149 to 178, this time, which is the highest, as I recall. I do try to use natural light as much as possible, among other things, and tried CFLs but with two active teenage boys, the breakage made CFLs uneconomical and unhealthy. SCANA formerly known as Public Service of NC never seems to get it right, the first year, I had the equivalent of a 4 month credit, in excess. This year it was just 2 months, so there's some improvement... Interest free loan? perhaps...

Two active teenage boys

Wish we could bottle that energy.

That letter made me mad

I got that letter. And I was outraged. WHY WOULD I DO THAT? it is gambling, where they win.

You gamble that the power company might set your rate lower than what you spend. So there is an incentive to use more power.

I just want to pay for what I use. my fair share.
I think there ought to be a law against this rate plan.

it is different from the monthly equal payment plan. but they act like they are doing you a favor.

That is not a good advertisement for corporate citizen ship.

TurnNCBlue

Hedging

The fixed payment plan, offered by both Duke and Progress, permits residential customers to hedge variable usage. The largest power (and electic cost) variable for most residential customers is heating and air-conditioning, both of which are affected primarily by the weather. Most other usage is relatively fixed for a family (not that it can't be reduced, just that there are not significant changes from month to month absent adding residents or taking affirmative steps to conserve).

The fixed payment plan gives a residential customer the option to pay on average slightly more for a 12 month period than the customer paid the previous twelve months. If the weather is hotter than the previous year and the customer runs the ac more often than last year, the power company eats it. No massive bill that can't be paid resulting in a credit ding. Same in the winter. A colder winter this year resulting in more heating costs will not run up the customer's bill.

In exchange for the hedge, the customer pays more than they did the previous twelve months and if the weather is temperate, the power company keeps the money and you overpaid compared to what you would have paid if you didn't hedge.

As you probably know, these hedges are used by corporations who purchase raw materials all the time. And the hedge could end up a loser for the customer which it has for the most recent 12 month cycle.

This plan is different than the one mentioned by MissM above. That is merely an equal payment plan which splits your previous year's payments into 12 equal bills and at the end of the cycle adjusts your last bill to reflect actual use and cost. Used more - - bigger bill at the end. Use less - - smaller bill at the end or money back.

Hedging, or the fixed plan may be an option that customers may want to engage in and I am not sure why having it available as a choice is all that bad on its face. The real issue with the fixed plan is the one mentioned by scharrison above. Does the plan have the inadvertant effect of dampening desires to conserve? The Utilities Commission is intending to study that very question in the next few months.

Finally, as to Cliffside, their permit requires carbon neutrality by a date certain. Failure to meet that requirement results in withdrawal of the permit. I'd much rather have that result than face years of purchasing power from plants outside the state that cause more serious emission problems which find their way to NC anyway.

I do the equal payment plan as well.

It avoids those massive, unexpected summer bills.

One of the pitfalls of childhood is that one doesn't have to understand something to feel it. - Carlos Ruiz Zafon

Jesus Swept ticked me off. Too short. I loved the characters and then POOF it was over.
-me

So you're basically betting

that your regular bills would really have gone up more than 10% . . . is that right?

Given the absolute automation of billing, why the $1 monthly fee for this "convenience"?

If you are a betting man

I suppose it could be betting. I would hope consumers don't make those types of choices.

What a rational consumer might do is create an annual budget. Using last year's expenses as a guide, the budget could be fairly fixed excepting rising prices and no new or unexpected expenses. But assume you build into your budget a "rainy day fund" for such new and unexpected expenses. While doing your budget you note that your power bill last year was $1000. In years past the power bill ranged from $950 to $1500 with most of the variable costs occurring in the summer and winter months as a result of weather extremes.

Let's assume after you budgeted for $1000 in power bills and you budget all other known expenses, savings and a rainy day fund for emergency expenses, you find that you have $500 in discretionary money. You also know you would like to buy new tires for your car at a cost of $400, but only if you can afford it. With the $500 in the discretionary account you realize you can buy those tires.

But wait, it is possible to have another year where, because of weather extremes, your power bill could go back up to $1500 and now the only way to get new tires is to put them on credit or delay paying the power bill. Neither are great options. However with the fixed rate plan you could guarantee that the power bill will not exceed $1100 (10% more than the previous year). Now the consumer knows she can get the tires regardless of the vagaries of the weather.

Yes, you could have taken the risk and actually ended up with more than the original $500 in discretionary money. But if you are risk adverse, the fixed rate plan may be the way to go.

It is merely one choice for consumers. No one is forced to take the plan and it is probably only worthwhile for certain consumers. But why should anyone care that it is offered unless as scharrison pointed out, that it discourages conservation. Additionally, if it is not marketed clearly that would also be a problem.

I think consumer choice is a good thing. Duke ought to look at a plan the hedges the opposite way, betting, as you put it, or planning as the theoretical rational consumer would do, on lowered use during the following 12 months.

As to the administrative cost, who knows why? Call the Public Staff or Duke, perhaps they know why. But if you are really just betting, $1 is cheaper than a ticket to Vegas.

Thanks.

Good explanation.

It's a sales pitch, Jay.

Finally, as to Cliffside, their permit requires carbon neutrality by a date certain. Failure to meet that requirement results in withdrawal of the permit.

Even if they do shut down other plants to accomodate the carbon emitted from Cliffside, what does that tell you? We don't need another coal plant, period. Duke Energy had several chances to renovate these older plants and make them much cleaner, but they chose not to. Probably so they could trade them off for a new 2.4 billion construction project.

Once this thing is built, it won't matter about air quality permits or promises made—we'll be stuck with it for decades. If you believe the amounts and types of pollutants this thing will emit are okay, that's one thing. But if you don't, and you're relying on Duke to back up its promises, that's illogical in the face of their previous behavior.

Thanks to the baseloading provisions of the REPS bill, we have to stop this thing now, or taxpayers will have to eat the costs of this mistake down the road, while Duke sits back and plans another debacle.

If Duke Power hasn't made enough money off of this scam,

I just learned of their new practice of spraying NEW herbicides* now with nerotoxins on the right-of-ways next to hiking trails and MY HOUSE.

2007-2008 ABOUT DUKE ENERGY USING HAZARDOUS HERBICIDES AT THE HIGH POINT CITY PIEDMONT ENVIRONMENTAL CENTER PEC AND BICENTENNIAL GREENWAY FOR RIGHT OF WAY MANAGEMENT AND ACROSS NORTH CAROLINA. USE YOUR CAMERA, A PICTURE IS WORTH A THOUSAND WORDS. YOU SHOULD HAVE THE RIGHT TO KNOW WHEN YOU ARE BEING EXPOSED TO HAZARDOUS HERBICIDES ON PRIVATE AND PUBLIC PROPERTY! DON’T LET DUKE ENERGY GET AWAY WITH THIS PRACTICE IN NORTH CAROLINA! THIS CAN NOT BE ENVIRONMENTAL FRIENDLY! WHERE IS THE WILD LIFE TO LIVE? THIS AREA IS TO BE REPEATEDLY SPRAYED WITHOUT WARNING OR NOTIFICATION TO THE PUBLIC!

Health Hazards- One of the primary breakdown products of imazapyr (Arsenal) is Quinolinic Acid, which is irritating to the eyes, skin, and respiratory system. In addition, it is a neurotoxin, and causes nerve lesions and symptoms similar to Huntington’s disease. Protect your public parks and drinking water supplies!

citizen1 contact

Toxic Billing

Funny that this letter came on the heels of our "phase out" notice for load control. All our major appliances were hooked into the load control system and Duke would "rebate" us a modest amount for not running the A/C at peak times. Sometimes a drag but rarely causing our internal temp during the summer to rise above 84. Living in Chapel Thrill, we usually could use the attic fan to moderate the temps enough to keep the bills down in the summer (though, for me, it's not the temp but the humidity that we're really trying to control).

lottT, might want to check out Laurin's 'blog ( http://laurineasthom.wordpress.com/ ). She's a local council member that's been revisiting Duke's herbicide program. The issue usually comes up every 5-6 years when Duke starts going spray crazy.

CitizenWill
there comes a time when one must take a position that is neither safe, nor politic, nor popular, but he must do it because Conscience tells him it is right. MLK,Jr. to SCLC Leadership Class

CitizenWill
there comes a time when one must take a position that is neither safe, nor politic, nor popular, but he must do it because Conscience tells him it is right. MLK,Jr. to SCLC Leadership Class