Customers of Pacific Gas & Electric Co. would be able to pay more on their monthly bills to fight greenhouse gas emissions under a program described as the first such arrangement by a U.S. utility.
The voluntary program, approved Thursday by the California Public Utilities Commission, would begin in spring and cost an average residential customer about $52 a year. The San Francisco utility would spend the money on tree-planting projects and other ventures aimed at offsetting emissions of carbon dioxide and other greenhouse gases in California.
The state this year passed a groundbreaking law that would attack global warming by cutting greenhouse gas emissions 25% by 2020.
"I think it's a very positive step," commission President Michael R. Peevey said of PG&E;'s ClimateSmart program.
"As the warnings about the threat of climate change mount daily, it is increasingly apparent that we will need to pull out all the stops to prevent very dire consequences," Peevey said during Thursday's commission meeting in San Francisco. "This means we need both mandatory and market-based measures, as well as voluntary actions by individuals and businesses, which this program encourages."
PG&E;, a subsidiary of PG&E; Corp., is California's largest utility, serving 5.8 million residential and business customers in Northern and Central California.
More than 600 U.S. utilities, or 20%, operate programs giving customers the option of paying more to support solar, wind and other renewable energy projects, according to the National Renewable Energy Laboratory in Golden, Colo. But the PG&E; program is the first to focus on offsetting the global warming effects of day-to-day energy use by businesses and homes, state regulators said.
San Diego Gas & Electric Co. is developing a program that would "meet the exact same objective but through our own unique approach," spokesman Peter Hidalgo said. Southern California Edison, the utility serving much of Southern California, didn't respond to questions about its plans.
Matthew Freedman, a staff attorney at San Francisco's Utility Reform Network, isn't convinced the PG&E; plan is the right approach.
"It's a step forward insofar as we are taking action to meet the state's climate goals, but we think this program burdens customers with unnecessary costs," Freedman said. "There's already going to be a huge price tag" to combating global warming, he said, "so we want to be looking at the cost-effectiveness of all these choices."
PG&E;'s plan includes spending $16.4 million -- paid for by all of its customers -- on administration and marketing costs over three years.
About $900,000 of the funding would go to the California Climate Action Registry, a nonprofit group that specializes in measuring reductions in greenhouse gas emissions. The group would verify the effectiveness of the carbon dioxide reduction projects that PG&E; funds.
The utility said it expected to sign up 4% of its customers, raising about $20 million to offset emissions during the three-year program.
PG&E;, which would pay $1 million as a customer of its own program, guaranteed state regulators that it would cut a minimum of 1.5 million tons of carbon dioxide from the air but said it hoped to achieve a reduction as high as 2 million tons.
"When you look at the amount of greenhouse gas reductions that they expect and then you look at the amount of money they plan to spend on marketing, the numbers don't pencil out very attractively," Freedman said. If the utility signs up 4% of its customers -- a fairly lofty goal -- "then they'll spend $16 million to get $20 million."
California utility regulators, holding their last meeting of the year and the last meeting before Geoffrey F. Brown leaves his commission post, also approved utility budgets and programs that provide 20% discounts on energy bills as well as energy-efficiency services to low-income customers.
In other action, regulators tightened state rules designed to prevent each of the state's utility holding companies from compromising market competition by relaying confidential business information about a regulated utility to sister companies that want to sell power to the utility. The commission also approved five PG&E; contracts for renewable power.