By now, you know that reducing your energy consumption through conservation will help cut down on emissions from your own house and from power plants. And you can probably do more, even without going off the grid to produce your own electricity. The same power
utility you are using now may have “green power” options available.
Changes in Recent History
Traditionally, electric power has been a natural monopoly—a service that makes little sense to offer through more than one provider per market. When Consolidated Edison was laying miles of copper lines under the streets of New York in the late nineteenth century, no other
company could have done the same. This was the case for most utilities, and consumers grew accustomed to having one provider for each utility service.
Two developments of the past 20 years have given consumers greater choice. Deregulation has opened the marketplace to competition, and power utilities have begun buying electricity from independent providers that use renewable sources such as solar
power, wind power, hydro power, geothermal energy, and even biomass fuels. Consumers in many states can now specify what sources they want for their electric power, sometimes without even changing service providers.
Electricity generated by these alternative methods is best known as green power.
Market Deregulation
specific legislation that affects the way they do business. Whether competition is allowed in a given market depends on legislation, usually at the state level, rather than on decisions by individual power utilities. The most recent figures available from the U.S. Energy Information Administration show that 23 states and the District of Columbia have partially deregulated electric power, and allowed competition in that market. Consumers in those states can buy their electricity from other providers if they want. The list includes
• Arizona • Maryland • Ohio
• Connecticut • Massachusetts • Oregon
• Delaware • Michigan • Pennsylvania
• District of Columbia • New Hampshire • Rhode Island
• Illinois • New Jersey • Texas
• Maine • New York • Virginia
In markets where competition is allowed, local distribution companies still provide transmission and distribution. Because deregulation varies by legislation, and therefore by state, different terms will apply for each location. In Arkansas, Montana, Nevada, New Mexico, Oklahoma, and West Virginia, deregulation has been discussed and legislation has been drafted, but no action has been taken recently.
A Good Place to Start
If your state is among the 24 that allow competition in electric utilities, you can find out about your options through the Green Power Partnership web site from the U.S. Environmental Protection Agency (EPA) at www.epa.gov/greenpower. The site includes a publication titled The Guide to Purchasing Green Power, which was compiled by the EPA,
the U.S. Department of Energy (DOE), the World Resources Institute, and the Center for Resource Solutions (CRS). It’s a free download, and it explains how to buy green power and lists different green power products.
Same Utility, Different Source
Green power may be available to you even if your state doesn’t yet allow competition among electric utilities. Even regulated businesses have options, which means you do, too. At last count, hundreds of utilities in 30 states offered ways for their customers to specify
environment-friendly fuel sources for the electricity they buy. These alternatives, called green-pricing programs, provide a way for you to encourage the utility to buy more power from producers that use renewable energy resources.
In general, these options do cost more than regular service from the same electric utility. Before you balk at the idea of spending more money for the same product, though, do two things: find out if your utility offers green-pricing options and get a firm quote on the price
difference. Then you can decide whether the cost premium is reasonable for the change it represents.
Renewable Energy Certificates
Even if your state does not allow competition and your electric utility does not offer alternative options, you can support green power another way—buying renewable energy certificates (RECs). Sometimes called tradable renewable certificates, green tags, or green
energy certificates, RECs are commodities that can be bought and sold. They provide evidence that power was generated from a renewable source. Each REC represents one megawatt-hour of electricity, a little more than an average consumer uses in a month.
To buy RECs, you keep your existing electric utility, but pay for proof that someone else is getting green power. This lets you encourage the use of green power if it isn’t yet available to you. In effect, you are subsidizing the development costs of producing green power. Instead of increasing costs to discourage emissions, as carbon credits do, RECs offset capital expenses for electric utilities to make green power a more attractive option.
Here’s how the process works: One REC is issued for each megawatt-hour of electricity generated by a green power producer. Each REC has a different identification number so that it is only counted once. When the power is added to the electrical grid, the REC can be sold.
Evaluating Green Power Sources
The electricity that reaches your house will be the same, no matter the source. So you may wonder how to tell where your green power money goes. Independent third parties can provide verification to help you feel certain about your choices. For example, the voluntary
certification program Green-e evaluates RECs, electricity products, and green power pricing structures for about 100 green power marketers in the United States. And the EcoPower certification program from the Environmental Resources Trust also certifies RECs for the
renewable energy attributes of green power. It makes no claims about environmental benefits; those are implicit, and up to you and the provider to evaluate.
Buying Power for Buying Power
If you’re concerned that individual homeowners won’t provide enough of a market for green power, you can relax. Hundreds of large organizations, public and private, have chosen green power for their facilities. These include federal agencies, military and aerospace
installations, national laboratories, the United States Postal Service, manufacturers of all sizes, high-technology companies, financial institutions, defense contractors, department stores, hotels and resorts, major sports teams and leagues, airports, grocery stores, car
makers, movie studios, churches, international political groups, states and cities across the country, schools and universities—and electric power utilities.
