Kate Galbraith
The solicitations have been flooding people?s mailboxes lately: pay a bit more on your electricity bill for 100% clean wind power. Or, the fliers say, buy ?green power certificates? to offset your global warming emissions.
Close to a million electricity customers have signed up for such payments voluntarily, and the amount of electricity sold in this way has nearly tripled since 2005, amid rising concern about climate change and energy security. But the participants are in a distinct minority, with a sign-up rate of only about 2% in programmememes run by utilities.
The low sign-up rate raises a question: If large majorities of Americans favour increased government support for clean energy, as polls suggest, why are so many people reluctant to back such programmemes when it comes to paying extra themselves?
One reason might be that they think the added expense is too high. Solar and wind power generally cost more than power generated with fossil fuels. While many people support alternative energy in principle, they personally may not want to spend hundreds of dollars more for electricity, especially in the current economic environment.
But in the back of some people?s minds, there may be another issue: Do these programmemes really cause more renewable energy projects to get built? The government has looked at the question, and says it is difficult to draw an overall conclusion. Its experts say they believe that some green power programmemes work better than others.
?It?s a tricky issue. It?s not a one-size-fits-all market,? said Lori Bird, a senior analyst at the National Renewable Energy Laboratory in Colorado and co-author of a report in September on green power markets.
At least one major programmeme has come under fire from regulators. Last year, a Florida Power and Light green power programmeme, called Sunshine Energy, was terminated by the state?s Public Service Commission after an audit found that promised solar power facilities were far behind schedule. The programme had more than 38,000 customers, and was once the sixth-largest in the country, according to the renewable energy laboratory.
The audit also found that the vast majority of homeowners? payments went into marketing and administration. ?No reasonable person would have contributed to the Sunshine Energy programme had they known that approximately 76.4% of the contributions would be spent on marketing and administrative expenses instead of renewable energy,? wrote Nathan Skop, a commissioner on the Florida Public Service Commission, in a note accompanying the termination decision.
Eric Silagy, the vice president of development for Florida Power and Light, said in an interview that the programmeme had exceeded its renewable energy objectives. ?Yes, we spent money on educating the customers, but I don?t know how you do it otherwise,? he said.
Overall, according to the national laboratory report, a median of 19% of the money that utilities are raising in these voluntary programmemes goes into promotion and marketing, with the numbers for smaller utilities often being much higher.
About a quarter of the country?s utilities offer green power programmemes, and the way they are structured varies. In practice, no big utility delivers 100% renewable power to any customer, because electricity from all sources?coal plants, wind farms, solar panels?is mingled in the same wires. The utilities are essentially collecting extra money that they promise to use to support the development of renewable energy, a pitch that some customers find persuasive.