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Green Pricing

     
 

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Major Topic Sections

Fossil-fueled Power
Non-Fossil Generation
End-Use Efficiency
Electricity T&D
Carbon Sequestration
Non-CO2 Reductions
Other GHG Reductions

Related topics in this section

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Nuclear Energy
Wind Power
Solar Thermal Elec.
Biomass Power
Photovoltaics
Geothermal Energy
Hydropower
Pumped Storage
Waste-to-Energy
Green Pricing
Green Tag Pgms.

 

 Green Pricing Programs

 
 Background


The term "green power" is used to define power generated from renewable energy sources, such as wind and solar power, geothermal, hydropower and various forms of biomass. Although renewable energy development has traditionally been limited by cost considerations, customer choice allows consumer preferences for cleaner energy sources to be reflected in market transactions. In many surveys, customers have expressed a preference and willingness to pay more, if necessary, for cleaner energy sources.

The essence of green power marketing is to provide market-based choices for electricity consumers to purchase power from environmentally preferred sources. Green power marketing has the potential to expand domestic markets for renewable energy technologies by fostering greater availability of renewable electric service options in retail markets.

Green pricing is an optional utility service that allows customers an opportunity to support a greater level of utility company investment in renewable energy technologies. Participating customers pay a premium on their electric bill to cover the incremental cost of the additional renewable energy. A number of states have policies in place that encourage the development of green power markets. These include policies that require or encourage electricity suppliers to offer green power options to consumers, net metering, and fuel mix and environmental disclosure policies.

The Energy Information Administration (EIA) collects information about green pricing programs on the Form EIA-861, “Annual Electric Power Industry Report,” which is a survey of electric industry participants. All respondents, except independent power producers and qualifying facilities, were asked to report their number of customers in green pricing programs by state and customer class. In EIA's April 2009 report "Green Pricing and Net Metering Programs 2007", the market for green pricing customers rebounded across the nation in 2007, with the number of customers in green pricing programs increasing by 192,795 to 835,651. Texas led this increase with 41,384 new customers, which brought its total to 142,334 or 17 percent of the market. Oregon and Maryland followed with 19,862 and 18,906 new customers respectively. By year’s end, 537 electric industry participants in 46 states and the District of Columbia reported having green pricing customers. Ninety-three percent of the customers were residential.

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 Power Partners Projects

APS in 2005 requested permission from the Arizona Corporation Commission to offer an expanded green energy program. This program will allow customers to purchase a mixture of renewable energy, including solar biogas, biomass, wind, and geothermal energy. APS anticipates offering this program in 2007.

Austin Energy developed GreenChoice, a program that offers customers the option to choose electricity from renewable sources. The highly successful program has 665 million kWh in subscriptions and is ranked first in the nation (in renewable energy sales) by the National Renewable Energy Laboratory (NREL).

CPS Energy in San Antonio, Texas, has one of the most aggressive renewable energy programs in the state, with more than four percent of peak demand drawn from renewable sources. The CPS Energy Board of Trustees has committed to meeting 10 percent of peak demand with renewable energy by 2015. Additionally, CPS designed its “GreenShade” tree-planting program to conserve energy and save on consumer cooling costs during the hot summer months. Eligible customers can receive free canopy trees to plant strategically near their homes.

Duke Energy Carolinasfranchised electric business unit collaborated to develop a first-of-its-kind GreenPower Program in North Carolina. The program gives customers the opportunity to support the development of alternative sources of electricity – specifically solar, wind, small hydroelectric, landfill gas, and biomass – by paying an additional monthly charge on their electric bill. Duke Energy Indiana has entered into a purchase power agreement for 100 MW of wind energy.

Exelon’s PECO subsidiary partnered with leading wind energy marketer Community Energy, Inc., of Wayne, Pennsylvania, to offer PECO WIND. This product, launched in May 2004, was the first wind energy product offered by a utility in Pennsylvania. Customers may elect to purchase wind energy either for their entire electric load or in increments of 100- kWh blocks up to 100 percent of their total load. At the end of 2005, more than 22,000 customers purchased 43 million kWh of wind-generated electricity. Exelon also is seeking Leadership in Energy and Environmental Design platinum certification for its company’s renovated Chicago headquarters, which opened in December 2006. The integrated design and project management efforts to date have resulted in energy procurement of 100-percent Green e-power to serve the needs of the new space; specifications for office layouts that leverage natural light; and material selection that includes use of recycled or regionally manufactured materials.

IPL, AES’s utility in Indianapolis, has implemented a metering program that allows homeowners and schools to reduce their electric bills by generating their own power using small-scale solar, wind, or hydroelectric energy systems.

SMUD’s Greenergy® program offers customers the choice of supporting energy created by green resources. SMUD matches up to 100 percent of a Greenergy® customer’s electric needs with purchases of renewable resources for use on the SMUD power system for only pennies a day. According to NREL, Greenergy® qualifies as the nation’s fifth-largest green pricing program based on the number of customers enrolled.

In TVA's Green Power Switch® program, ninety public power distributors in the seven-state TVA region offer consumers the option to purchase renewable energy under TVA’s Green Power Switch® program. Launched in 2000 with 12 distributors, the program provides energy from solar wind, and methane gas sources. Consumers can buy Green Power Switch® in 150-kWh blocks, and each block adds $4 to the monthly energy bill. During the 2004-2005 school year, students at the University of Tennessee voted to increase their facility fees to support renewable energy, making the university the largest purchaser of Green Power Switch® in Tennessee with 3,375 blocks. Additionally, Tennessee became the first state in the nation to buy green power for all of its state parks. Its purchase of 1,149 blocks per month is equivalent to the environmental benefits of planting 169 hectares (418 acres) of trees, recycling 8.8 million aluminum cans, or removing 270 cars from Tennessee highways.

Xcel Energy’s wind-based green pricing program, “Windsource,” has 50,000 customers in Colorado, New Mexico, and Minnesota  –  making it the largest program of its kind in the country. Xcel plans to offer the program to its North Dakota customers in January 2007.

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 References, Sources, and Other Useful Data


Environmental Protection Agency, “Green Power Partnership”
http://www.epa.gov/greenpower/

EPA’s Green Power Partnership provides assistance and recognition to organizations that demonstrate environmental leadership by choosing green power. This Website helps users make better choices by providing needed information about green power and how to purchase it.

GreenPower (Australia)
http://www.greenpower.gov.au/home.aspx

GreenPower is a national accreditation program in Australia that sets stringent environmental and reporting standards for renewable energy products offered by electricity suppliers to households and businesses across Australia. Energy suppliers' GreenPower products are independently audited. The New South Wales Government first established the GreenPower Accreditation Program to accredit electricity retailers’ renewable energy products in that state. The program was developed in consultation with the energy industry, and various non-government organisations including the Australian Consumers Association, Greenpeace, the Australian Conservation Foundation and WWF. Since 2000, the program has been offered nationally through joint collaboration by participating jurisdictions, collectively known as the National GreenPower Steering Group (NGPSG).

GreenTech News
http://www.greentechnewsmag.com/about.htm

GreenTech News (formerly Green Power magazine) is a product-and-service information resource for managers of enterprise sustainability and green programs who are responsible for their organizations’ sustainability-related programs in renewable energy, energy efficiency, facility design and operation, green materials and products, and green manufacturing and packaging. The publication covers the latest products and services to accomplish enterprise sustainability and green program objectives. Readers are managers in business and government organizations, managers of renewable energy and energy efficiency programs and operations, environmental managers and professionals involved in green programs for manufacturing, facility design and management, packaging, lighting, transportation and product development.

Union of Concerned Scientists, “Clean Energy”
http://www.ucsusa.org/clean_energy/

Innovative programs around the country now make it possible for all environmentally conscious energy consumers to support renewable energy directly by participating in the "green" power market. this website provides guideline information for choosing green power and offers links to further information.

U.S. Department of Energy, Energy Information Administration, “Green Pricing and Net Metering Programs 2007” (April 2009)
http://www.eia.doe.gov/cneaf/solar.renewables/page/greenprice/green_pricing.html

The Energy Information Administration (EIA) collects information about green pricing programs on the Form EIA-861, “Annual Electric Power Industry Report,” which is a survey of electric industry participants. All respondents, except independent power producers and qualifying facilities, are asked to report their number of customers in green pricing programs by state and customer class. 

U.S. Department of Energy, Office of Energy Efficiency and Renewable Energy, “The Green Power Network”
http://www.eere.energy.gov/greenpower/index.shtml

The Green Power Network (GPN) provides news and information on green power markets and related activities. The site provides up-to-date information on green power providers, product offerings, consumer protection issues, and policies affecting green power markets. It also includes a reference library of relevant papers, articles and reports.

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Last revised: Dec. 11, 2009.