How You Can Lower Your Electric Bills; How You Can Cash in on Superheroes
JOHN METAXAS, HOST: If you haven't felt the squeeze of higher electric bills yet, perhaps you should brace yourself. The energy research director of Public Citizen joins us to talk about the future of the energy market and how you can lower your electric bills. And, thinking of renovating? We'll tell you what home improvements will give you the most bang for your buck. Plus, Hollywood is helping to boost the value of some old comic books. We'll tell you how you can cash in on the superheroes. Ahead on</s>YOUR MONEY. ANNOUNCER: This is</s>YOUR MONEY. METAXAS: I'm John Metaxes. Welcome to YOUR MONEY, where our goal is to help you made more, save more and do more with your money. We begin today with a look at the rising cost of energy. If you've noticed the jump in your electric bill recently, you're not alone. Energy prices have been climbing, and summer consumption is not solely to blame. Deregulation has a lot to with the rising costs, and although it was meant to save consumers money, many argue deregulation has backfired. Lauren Thierry has more.</s>LAUREN THIERRY, CNN CORRESPONDENT (voice-over): Consumers across the country are getting a surprise in the mail, a warning from their electric company that their bills are going up. San Diego, California was the first to feel the surge. Electric bills there have more than doubled.</s>MICHAEL SHAMUS, UTILITY CONSUMER ACTION NETWORK: I think people are at a loss as to what's happened, why this is happening and I guess most importantly, what are their options? And right now, people are feeling, pardon the pun, powerless.</s>THIERRY: Here's what's happening: As a result of deregulation, several states have ordered utility companies to loosen their monopoly on generating and delivering power. Those companies now deliver power only. They have to buy it from an independent company, along with other competitors. This is supposed to lower prices, but demand is outpacing supply. Consumers are angry, electric companies are supposed to inform them that they have options. The electric companies say they are still having a tough time getting the message through.</s>MICHAEL CLENDENIN, CON EDISON: Deregulation is still evolving here in New York State. There are many other companies now, about 22 just here in New York City, which are alternatives to Con Edison. And we have a retail choice program if people choose to use another provider. But that market place is still evolving and we're just beginning to see the impact now.</s>THIERRY: So far, 25 states, including the District of Columbia, have deregulated the energy industry; 18 more are considering it. But that may all change, California is facing a crisis, nearly running out of power on several occasions. That state has cut the price cap on wholesale electricity twice this summer to bring prices down. So, as you cool off this summer, the heat over deregulation rises. That's YOUR MONEY, I'm Lauren Thierry, CNN Financial News, New York.</s>METAXAS: Energy Secretary Bill Richardson said Thursday California's power problems are a warning, that the nation's electricity system must be modernized to meet growing demand and market pressures of an increasingly competitive and deregulated industry. Joining me now to talk more about the impact of deregulation on consumers, and what you can do to fight high electric bills is Charlie Higley, energy research director at Public Citizen. And, Charlie, welcome back to the program.</s>CHARLIE HIGLEY, PUBLIC CITIZEN: Thank you very much John.</s>METAXAS: You've been a long critic of the deregulation process. Is there anything that consumers can do now that this processes in motion? Anything that consumers can do to bring their electric costs down?</s>HIGLEY: Well, first off, if you want to save money, you can use your air conditioner less and instead use a fan, or you can not open your refrigerator has often, or if your electric water heater is on don't use as much hot water. Those are the three largest energy users in the typical household. But you also should be writing legislators and telling them to protect you by passing strong utility laws so that you're not faced with these blackouts and high price hikes in the future.</s>METAXAS: What are some of the political aspects of that, that you'd like to see enacted?</s>HIGLEY: Well, we've been long critical of the move toward deregulation, and we often think that this industry would be better left with strong regulation in place with improvements. Regulation also brought us nuclear power, so it's not the panacea. But leaving it in the hands of for-profit suppliers is not the solution either. As we're seeing, prices are going skyrocketing high, and there's a -- the large energy companies are making money hand over fist, and it's coming directly out of consumers pockets. So...</s>METAXAS: That being said though, there is deregulation and you have to keep up with it. Many consumers are now getting notices from their utilities that they have a choice, a choice to perhaps change carriers if they want. How do you go about assessing that choice and making a decision?</s>HIGLEY: It's very difficult now. Even if you're to stay with your original utility you've been buying power from for years, they may have sold off all their power plants, and they may now be buying a power on the spot market, and so you may be subjected to high rates. This is what's happening to customers in San Diego and in New York City. But if you change suppliers, you have a very difficult time reading through the literature to determine whether or not you're going to save any money, and you have to look through all the fine print, because you very well could be exposed to price increases, should the cost for fuel or other things go up, as it has. So it's very difficult for consumers to compare and to shop, especially given the volatility in the markets today.</s>METAXAS: What can consumers learn from the telecommunications experience, and I'm thinking about such abuses as slamming and also the confusing nature of many of the rate plans that seem to change every six months?</s>HIGLEY: That's right. The conditions are the buyer has to beware. And unfortunately even if you just did nothing, you could still be exposed to these high prices. So the electricity consumer's in a real disadvantage right now, and again that's all due to the bad legislation that's been passed in the various states that allowing this to occur.</s>METAXAS: One of the reforms that you're trying to push is community choice. Tell us how that works and how political activism perhaps can improve your electric bill.</s>HIGLEY: Community choice occurs when a community decides through a public process that they would like to have the city buy power on the citizen's behalf. And by getting everybody together in a buying group, the citizens of the community can go out and shop for, hopefully, for a better deal then what they could on their own. And the real benefit of community choice is that, again, through a public process the community decides it wants to do this, buy power on behalf of everyone. Then everyone is automatically included in the buying program. And if you want, you can opt out and go choose electricity on your own. But since everyone is included, then most people are going to be assured of saving some money. So that's our favorite form of what is known as aggregation, were trying to increase the buying power of consumers. There are other forms, but this one brings in the most people the easiest.</s>METAXAS: All, right Charlie Higley, thanks very much for joining us.</s>HIGLEY: Thank you very much, John.</s>METAXAS: Well, coming up, if you can't afford a new house perhaps remodeling is a good alternative. We'll tell you how to go about it. And if you're renovating for the sake of re-sale, we'll tell you what home improvements will give you the most for YOUR MONEY.