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Businesses stick to green power, despite economy

By ROSALIE WESTENSKOW, UPI Energy Correspondent   |   Feb. 6, 2009 at 8:21 PM
Whole Foods is doing it. So are PepsiCo, REI, New York University and ING Financial Services.

Despite the credit crunch, they're all buying 100 percent of their electricity from renewable sources. And they're not alone.

Almost 1,100 U.S. businesses, universities and non-profit organizations have chosen to juice at least part of their operations with green power, even though it usually means paying a little more each month, according to the U.S. Environmental Protection Agency. The increase in price varies by utility, state and energy source, but data from the EPA show most green power costs more than traditional sources of energy.

The market for clean electricity has grown steadily over the past decade, and the most recently published statistics show a 53 percent increase in total sales of renewable electricity from 2006 to 2007, with non-residential customers buying 56 percent more green power in 2007 than they did the year before, according to the National Renewable Energy Laboratory.

But that was before Wall Street tumbled, the credit market froze and businesses started cutting every extra expenditure. Against all odds, though, the power source of the future appears to be one sector of the economy that hasn't been pummeled -- yet.

"Last year, the market continued to expand," said Lori Bird, senior energy analyst at NREL.

In 2008 businesses and organizations bought 5.08 million megawatt-hours, compared with 4.7 million the year before, according to EPA's Green Power Partnership, which helps hundreds of businesses buy renewable energy.

Intel topped the charts in 2008, buying a total of 1.3 million mwh of renewable energy at one time -- the largest single purchase of green power to date.

Companies can buy green power from utility programs that sell electricity from renewable energy sources; directly from energy producers, like a wind farm; or in the form of Renewable Energy Certificates, which represent one megawatt-hour of renewable energy each.

No one expected the business world to drive green power in the United States, but that's what's happened over the past couple of years, said Blaine Collison, program director for the Green Power Partnership.

"Back in the '90s, everyone figured it was going to be the residential market that would really drive green power," Collison said.

That's because the average person uses much less electricity than the average business, meaning residential customers could potentially go green for a few extra dollars a month -- far less than most businesses would have to cough up.

But in 2007, non-residential entities bought three times as much renewable power as residential customers, weighing in at a total of 13.6 billion kilowatt-hours. There are a few major reasons why this trend has occurred, Collison said.

"A lot of companies are paying attention to their climate-change footprints and want to take some action," he said. "Green power resonates for these companies and their stakeholders."

Whole Foods, a major retailer of natural and organic foods, falls into that category, according to Lee Matecko, vice president for construction and store development.

"Supporting wise environmental practices is part of our core values and strengthens our commitment to be a leader in environmental stewardship," he said.

That doesn't mean all the green halos being flaunted in the business world are genuine, though.

A number of companies that make green claims are noticeably absent from EPA's list of Green Power Partners. For instance, although Ford's 2006 Super Bowl commercial featured Kermit the Frog telling viewers, "I guess it is easy being green," the company's name doesn't appear on the list. Others missing include oil giant Exxon, whose ad on natural gas and the environment was banned by U.K. officials a few months ago because it allegedly misled viewers, and Chevrolet, which has an ad asking customers to "do more" for the environment.

Many companies have opted for renewable power purely for economic reasons.

Some utilities, like Texas' Austin Power, offer green power programs that give participants a set rate over a number of years, which means companies can plan their expenses and escape the volatility of fossil fuel prices.

"A business can know what their bill will be for 10 years," said Ed Clark, spokesman for Austin Power, which sells 83 percent of its green power to businesses. "That's why the program is so successful."

On top of gaining stability, those who signed up in Austin several years ago are actually saving money now. The first batch of green energy contracts the utility sold locked in rates of 1.7 cents per kwh, far cheaper than the 3.65 cents per kwh that Austin Power currently charges for its regular electricity.

In fact, the first four batches of contracts all fell below that level. The two most recent batches, though, have been more than the standard cost of fuel, costing as much as 9.5 cents per kwh, depending on the length of the contract.

As the less expensive contracts expire, Clark says he expects to see fewer people sign up again.

"It will shift from those who want a good value to those who are really concerned about the environment," he said.

That means the renewable power sector may not be recession-proof after all, just better positioned for the eventual hit.

Industry representatives on the other side of the market -- those involved in producing and selling renewable energy -- don't seem worried.

Brian Lynch, spokesman for Schott Solar, a leading producer of solar power equipment, said Schott hasn't seen any decrease in demand and is plugging ahead with a major plant in Albuquerque, slated to open this spring.

"We're hiring lots of people right now," Lynch said. "We're confident enough in the market to continue developing the project just as we planned."

From the comments of a number of green power purchasers, it looks as though Schott can keep that outlook for now. When asked if computer maker Dell -- which either purchases clean electricity or enough Renewable Energy Certificates to offset fossil fuel consumption -- would lay off workers before dropping green power, spokesman Sean Donahue said the company doesn't want to do either.

"We think green," Donahue added, "is a business imperative."

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(e-mail: rwestenskow@upi.com)

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