Report Offers Pale Review of ‘Green’ Power
The marketing of “green” electricity in California is little more than a hoax on consumers and provides few benefits to the environment, charges a report to be released today by Public Citizen, the Washington-based consumer watchdog group founded by Ralph Nader.
Promoters of renewable energy objected sharply to Public Citizen’s position, contending that California’s fledgling market is fostering the sort of investments that will increase the supply of cleaner energy and eventually improve the environment.
“We are dedicated to creating a vibrant market for renewable energy in California, and we take great exception to people inside the Beltway trying to undo our work,” said Jan Smutny-Jones, executive director of Independent Energy Producers, a Sacramento-based association of wind, solar, biomass and geothermal energy producers. “There is a real green market here in California, and people are exercising choice.”
Under electricity deregulation, California consumers are now able to pay extra for electricity generated by renewable resources such as solar, wind, steam, small hydroelectric projects and biomass, as opposed to the more polluting natural gas or coal, which generate most of the state’s electricity.
Of the 100,000 California consumers and businesses that have opted to participate in the new competitive market, an estimated 35,000-plus have selected green electricity. Nearly 10 million, or 70%, of the state’s electricity users have been able to select an energy provider other than their old investor-owned utility since March 31.
Public Citizen contends that most of the premium for green electricity goes to pay marketing and advertising costs.
The group further charges that thus far, none of the new green electricity marketers is peddling electricity from new renewable-energy projects. Rather, they are merely recycling electricity from existing clean sources largely controlled by utilities, the report charges. In some cases, the product descriptions are misleading, the report contends.
If they want to improve the environment, consumers would do better to demand public policy changes and to simply turn out the lights when they leave a room or buy more energy-efficient lightbulbs, the report said.
“The electric utility industry is justifying deregulation by claiming there are environmental benefits, such as the marketing of green electricity, but in fact the ‘green’ is going mostly into the pockets of marketers,” said Public Citizen President Joan Claybrook.
The report, written by energy consultant Nancy Rader, estimated that 75% to 95% of the extra $10 that consumers pay each month for green electricity goes to covering marketing and overhead and does not result in any expansion of renewable-energy generation. A program to certify the origin of green energy does not adequately protect consumers, the report said.
But V. John White, executive director of a Sacramento-based advocacy group called the Center for Energy Efficiency and Renewable Technologies, said he is “upbeat” about the continuing evolution of the green electricity market in California, both in the number of new and proposed investments in renewable generation as well as the ranks of customers going green.
“It’s a tough market,” White said. “We all would prefer that there were more new plants, but we’ve got to get this thing going.”
White noted that Green Mountain Energy Resources has broken ground on two new wind turbines and that Enron Energy Services plans a new wind farm in California. In addition, the city of Santa Monica has committed to buying green electricity from new sources, he said.
There is a political backdrop to the controversy, White said: Public Citizen opposes electricity deregulation and supports Proposition 9 on the Nov. 3 California ballot, which promises a 20% electricity rate reduction and rolls back parts of the landmark 1996 deregulation legislation.
Proposition 9 “is related, but it’s really peripheral,” said Wenonah Hauter, director of Public Citizen’s energy project. “We just want to make sure that things that are touted as being good for the environment really are.”
Green Mountain, the state’s most successful green electricity marketer with more than 20,000 customers, “would certainly have loved to offer our customers new renewables, but it just was not available,” said Julie Blunden, San Francisco-based regional director of the Vermont-based company.
The Public Citizen study criticized Green Mountain for changing its promise to build a new wind turbine for every 3,000 customers who select its Wind for the Future product, increasing the threshold to 4,000. Blunden said the total was increased because Green Mountain increased the generating capacity of the turbines.
“We’ve been very forthright about the fact that we can’t change the power system on Day One,” Blunden said.
