Sort Out Your Choices: Buying Green Power

Just a few years ago, we did not have the ability to choose our electric service. Currently, the electricity industry is undergoing changes that will bring choice to many consumers across the country. Already, utility customers can choose to obtain electricity from clean generation sources—also known as green power.

Green power is electricity that is generated from renewable energy sources like the sun, , , plants, and the Earth's internal . Facing deregulation and competition, utilities are focusing on their customers' preferences. In survey after survey, customers request electricity generated by green power, and utilities are responding.

What is Green Pricing?

Because using these technologies generally more than existing fossilfuel generation, some utilities are selling consumers green power at a slightly higher cost than fossilfuel generated electricity, called green pricing. More than 50 green pricing programs are under way across the country. One way to look at green pricing programs is that they offer you a “vote” in what types of energy sources your utility will use. Your vote could result in new renewable energy facilities being built. After all, more than 110 megawatts of new renewables capacity has been installed to serve green power customers, with about another 105 megawatts planned. For example, the Public Service Company of Colorado's green pricing program for wind energy, WindSource, has been so successful that the utility added more wind turbines to meet customer demand.

What is Green Power Marketing?

Green power marketers disclose the sources of the electricity they sell.
Green power marketers disclose the sources of the electricity they sell.

In some parts of the country, consumers can choose not only how their electricity is generated, but also who supplies it.

Utility deregulation has occurred in some states and consumers can choose an electricity supplier. Electricity markets are now open to competition in California, Massachusetts, New Jersey, Pennsylvania, and Rhode Island. A number of other states are phasing in competition, allowing some customers to choose their electrical supplier. Green power marketers, selling green products and services to residential, commercial, and wholesale customers, are active in

California and Pennsylvania, and green power products have also been introduced in New England.

Because of the way the electric grid works, the renewable energy that you buy is not necessarily delivered to your home. Instead, that power is delivered into the electrical grid, along with electricity from other power sources.

Depending upon the supply of renewable energy, on some days the green marketer may supply more green power and on some days, less. But by the end of the year, the green marketer must supply enough renewable energy to the grid to equal its green power commitments to consumers. To verify the claims of green marketers, the nonprofit Center for Resource Solutions started the Greene program, which requires green marketers to include at least 50% renewables in their products and sets other criteria that green marketers must meet to bear the Greene logo (see below).

In competitive markets, electricity is still delivered to your home by the utility via existing transmission and distribution lines. Your utility bill will show distribution charges and generation charges separately. Distribution charges are paid to the utility, which is responsible for maintaining the distribution and transmission lines and delivering electricity to you.

Generation charges are paid to the power supplier.

Greene Renewable Electricity Certification Program: Protecting Green Power Consumers

The nonprofit Center for Resource Solutions established the Greene Renewable Electricity Certification Program to ensure that consumers who purchase “green” power are getting exactly that. The Greene logo on an electricity product means:

  • At least 50% of the electricity supply for the product comes from renewable electricity resources.
  • Any nonrenewable part of the product has lower air emissions than the traditional mix of electricity (for example, natural gas).
  • The company offering the product agrees to abide by the Greene Program's Code of Conduct, which requires that providers disclose the sources of the electricity they sell.
  • The product does not contain any nuclear power.
  • One year after deregulation, the product must contain at least 5% new renewable electricity. Greene intends to increase the new renewables requirement each year.
  • The company offering the product agrees to undergo a biannual review of advertising materials to ensure they are not making any false or misleading statements about their products.
  • The company offering the product agrees to undergo an annual audit by a third party to ensure that they have purchased enough renewable power to satisfy what they sold to customers.