As I was watching an ad about how much a person can save by using the new curley-que lightbulbs, the financial reality of all this goody-two shoe electrical conservation occurred to me.
Here's my theory . . . The rates we pay for electricity are in large part determined by the costs of generation and distribution. Once we all use these new light bulbs the demand for electricity falls, let's say 20%. The costs of operating Davis Besse and other generating plants though will likely continue to rise over time because most of the cost is sunk in hard generating equipment and mandatory personnel levels. The costs of maintaining the distribution system is not affected by everyone using 20% less juice.
This means that the electric rates will need to increase MORE THAN 25% just to cover the shortage in the utilities total billings to customers. Of course PUCO will approve the increases, because the utility can't be expected to lose $. When the dust settles, we will be paying the same amount we are now for less electricity. The utility wins and we break even at best.
First Energy shares are down, but they have to go back up! I'm buying First Energy stock!