U.S. consumers voting for green power by purchasing it

By ROSALIE WESTENSKOW, UPI ENERGY CORRESPONDENT   |   Feb. 6, 2009 at 8:22 PM   |   0 comments

As Congress and the new administration try to tackle climate change and dependence on foreign oil, more than a half-million Americans are weaning their homes from fossil fuels, opting to buy clean, homegrown electricity.

Currently 850 U.S. utilities, or 25 percent of utility companies nationwide, offer their customers the option of buying power generated from renewable sources. The amount of energy sold in green pricing programs has more than doubled since 2004, and the number of people participating has tripled since 2001, reaching 526,700 residents in 2007, according to the most recent statistics from the National Renewable Energy Laboratory, a branch of the U.S. Department of Energy.

The programs continue to grow each year, largely because individuals want to take action to stop climate change, said Cindy Bambini, partnership manager for Pure Power, a green pricing program at AmerenUE, a St. Louis utility.

"People are alert and listening and want to make a difference," Bambini said. "It's an easy, simple way to do it."

Amy Johnston, a member of the Pure Power program in St. Louis, said going green costs $15 to $30 extra on her electric bill each month.

"We're a family of five, so that's like a trip for fast food for us, so there's no question about whether I want to do it," she told United Press International. "Just by checking that little box on your bill, that's the easiest way you can help."

Despite annual increases in the amount of green energy sold in these programs, only 2 percent of customers nationwide currently participate, according to NREL.

Industry representatives told UPI this is partly due to confusion about how the programs work or a lack of awareness that they even exist.

THE NITTY GRITTY

The particulars of green pricing programs vary from company to company, but the basic premise is that the utility builds a facility to generate renewable energy -- such as windmills, a solar farm or a geothermal plant -- or buys it from an independently owned renewable energy project. The utility then sells that electricity to consumers who are willing to pay to promote the development of green energy.

Renewable energy usually costs more money to generate than traditional fossil fuels, so utilities charge extra to those who want it. In general, green power customers pay $6 more per month, according to NREL.

"We're sending an economic signal into the market that says (to renewable power generators), 'There are people out there who value your product,'" Thor Hinckley, manager of renewable power programs at Portland General Electric, told UPI. PGE's green power program is the second largest in the country, according to the Environmental Protection Agency, with 70,000 customers.

"A lot of the renewable energy projects in the last decade (in the Northwest) were built because of green power programs," Hinckley said.

Washington and Oregon hold the No. 1 and No. 3 spots in the nation for renewable energy generation, if hydropower is included in the mix.

Texas is home to the country's largest green pricing program, Austin Energy. The state's installed wind power capacity is more than that of the next three largest wind power states combined, according to the American Wind Energy Association. And there's more than a nuclear reactor's worth of wind generation under construction in Texas.

This wind boom has made the Austin Energy program economical, said company spokesman Ed Clark.

The utility offers batches of contracts for renewable energy, ensuring that those who sign up will get renewable power at a fixed rate for a certain number of years.

"All of the customers who subscribed to the first four batches are saving money by getting green power," Clark said.

That has changed in the more recent batches, though, as the state's antiquated electric grid struggles to deliver the electricity in a cost-effective way.

ENVIRONMENT BOOST OR BAMBOOZLE?

Higher prices for green energy constitute the norm across the country, but it's not always clear whether the extra money paid by green pricing program participants is going to promote clean electricity. A few utilities have been accused of swindling their green power customers by charging them extra money for clean energy but failing to deliver it.

On Thursday the state of Colorado announced Xcel Energy would build more wind farms and use the $1.6 million it overcharged its Windsource program customers to lower premiums.

The state's Public Utilities Commission discovered the program was oversubscribed, producing about 60 megawatts from the two wind farms included in the program but charging its customers for double that amount.

Under Colorado law, utilities in the state are required to produce 10 percent of their electricity from renewable sources by 2015 and spread the cost evenly among all customers. Electricity used to meet the mandate can't be used as part of green power programs, because customers signed up for those programs have agreed to buy green electricity above and beyond the government's set minimum.

Public utilities commissions track renewable energy in the form of Renewable Energy Certificates, and, after looking at Xcel's records, commission officials testified in court that Xcel double-counted some of its renewable energy and "improperly commingled voluntary RECs with RECs used to comply" with the state mandate.

Xcel, which has 75,500 participants in its Colorado green power program, contends it didn't expect so many of its customers to sign up for Windsource and was unprepared for the demand.

"The program became really, really popular, and we didn't anticipate it, so we got oversubscribed," Joe Fuentes, Xcel Energy spokesman, told UPI.

Problems like this can occur without customers realizing it because the lights go on whether or not the utility is using green power or dirty fossil fuels. That's why it's a good idea to investigate what you're buying, said Jeff Deyette, energy analyst at the Union of Concerned Scientists, a non-profit organization that researches environmental issues.

"As with any product, you need to know what you're buying and that you're getting what you pay for," Deyette said.

For the most part, problems like the one at Windsource have been few and far between, he said, and although green power programs aren't subject to any federal regulations, state public utilities commissions do monitor them. Plus, utilities can be prosecuted for not delivering what they advertise under the Federal Trade Commission's rules.

Even so, Deyette recommends asking lots of questions about where the energy comes from and checking to see whether the program has been independently certified to verify the utility is making good on its clean-energy promises.

When a program has the Green-e seal, it means "we've looked at their green pricing program, and we've audited it," said Jeff Swenerton, spokesman for Green-e, which is run by the Center for Resource Solutions, a non-profit that focuses on mitigating climate change. "We follow the chain of custody for their (Renewable Energy Certificates) from the wind farm (or other renewable source) to the customer, and we make sure it gets retired" so it can't be resold.

However, the problematic Windsource program actually carries the Green-e stamp. According to the Colorado Public Utilities Commission, Green-e did not initiate the current investigation, but Swenerton said that's because his company audits programs only once a year, and the oversubscription problem occurred since its last check-in with Windsource.

In the end, problems like this one are actually a good sign for the market, Swenerton said.

"The voluntary market is moving faster than the regulatory process," he said.

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(e-mail: rwestenskow@upi.com)

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