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First Energy, why not cut consumers a break instead?

January 22, 2013
Salem News

Instead of reaching a deal for naming rights to Cleveland Browns Stadium, First Energy should have taken the money and given its Northeast Ohio customers a price break.

It doesn't make much sense for any public utility to spend large sums of money on sponsorships considering how little, if any, competition exists in these industries. The First Energy deal with the Browns is especially troublesome considering the electric company does not service the stadium, taxpayers already paid for the stadium, and the naming fee will go to the team's owner, even though he doesn't own the stadium.

Traditional Browns fans may be upset for a more personal reason - it is the first time in franchise history that the team's home field will don a corporate name.

On Tuesday, Browns owner Jimmy Haslem announced that Akron-based FirstEnergy Corporation was awarded the naming rights to Cleveland Browns Stadium. At First Energy's request, the cost of the naming rights will not be disclosed.

Cleveland City Council must now approve the deal because the city owns the stadium. Council has little choice but to approve because former Cleveland Mayor Mike White and Council at the time agreed when the stadium was built that all money from naming rights would go to the Browns.

So taxpayers paid for the stadium. And now, taxpayers who are also First Energy customers - and that's pretty much everybody in northeast Ohio since the company owns and charges for use of the distribution network - are paying again. First Energy instead could have taken the money and given everybody a price break on electric distribution.

Or, perhaps, the company could have made a technological investment resulting in lower costs permanently. Or, perhaps, the company could have spent the money on more maintenance, such as tree trimming, to prevent power outages.

Here's another flaw in the naming rights deal: Cleveland Public Power, a First Energy competitor that First Energy once wanted to take over, supplies the stadium with electricity. Imagine Coke buying naming rights of a stadium that sold Pepsi products exclusively.

It might be wise for the state legislature, the Public Utilities Commission of Ohio and the Ohio Consumers Council to look into how utility companies spend money on promotion and what impact that has on customers.

 
 

 

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