GREEN ELECTRCITY AND COMPETITION
FROM ANDREA SHARAM, eag
Oct. 22, 1998
New Report Shows California Consumers Deceived by "Green" Electricity
Marketing Claims
Ratepayers Pay Extra Dollars for Sham Benefits
WASHINGTON, D.C. -- A ground-breaking new study released today by Public
Citizen shows that the marketing of "green" electricity in California's
newly deregulated utility market is largely a hoax on consumers and results
in little or no benefit to the environment.
"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.
According to the report, consumers who choose green electricity pay an
average of $10 extra per month for it. An estimated 75-95 percent of that
cost goes toward covering marketing and overhead and does not result in an
expansion of renewable energy generation. Green electricity is generated
from wind, geothermal, solar and other sustainable, non-polluting power
sources.
"Most marketers are making renewable energy the 'boutique option' and
taking advantage of people who want to do the right thing," said Wenonah
Hauter, director of Public Citizen's Critical Mass Energy Project. "They
are deceiving ratepayers into believing the extra dollars they pay for
'green' electricity are actually promoting the greater use of clean,
renewable energy sources, when that is clearly not the case."
The report, Green Buyers Beware: A Critical Review of "Green Electricity"
Products, reviews the content and cost of green power products being
offered in California and analyzes the claims being made about them.
California is one of the first states to open its electric utility market
to retail competition. A number of states are following suit.
The green electricity bought by California consumers comes largely from
renewable energy sources controlled by utilities and is already being paid
for by those utilities' customers. The electricity is simply being
repackaged and sold at higher prices. The result of a consumer's purchase
of green electricity can in some cases lead to the extended operation of
fossil fuel plants and greater pollution.
"The message in this is that consumers should look very carefully at claims
dealing with green energy, and they should demand policy changes that
result in real gains, not bogus claims," Hauter said. "We will encourage
the California State Attorney General's Office to look into this situation."
The report, written by energy consultant Nancy Rader of Berkeley, Calif.,
found that only one marketer of green electricity exclusively sells power
that is not repackaged from existing utility resources.
"The bottom line is, reselling utility resources does not result in any
additional generation of renewable energy, such as wind or biomass power,
and so it makes no difference to the environment," said Rader. "Clearly,
consumers are being deceived by claims that they are helping the planet by
purchasing these so-called green products."
Other major findings include:
Promised "new" renewable energy content comprises only a small fraction of
the products on the market.
The resale of utility-controlled resources to green consumers cannot make a
difference in the West because the supply of these resources already
greatly exceeds any realistic projection of green demand.
Largely because of high retail marketing costs, public subsidies are
required to support green marketing. More than $75 million in direct public
subsidies will support such ventures in California through 2001.
Green product claims cannot be verified without a regionwide tracking
system, which does not exist.
False or misleading green product claims are common. Some marketers, for
instance, falsely give the impression that their products contain solar or
wind power.
Green marketing is unlikely to reverse the current decline in renewable
energy production or significantly diversify electric system resources.
Most green marketers are affiliated with polluting companies and are not
advocates of renewable energy policy.
Consumers have no way of distinguishing between renewable energy that is
merely resold and renewable energy that truly needs support.
Significant policy changes are needed to make green electricity a larger
part of our energy future, Hauter said. For example, consumers need to have
the right to work with their local governments or purchasing agent to buy
green power directly from producers on behalf of all citizens in the
community, making green power both affordable and meaningful. Currently,
this "community choice" is impossible under California's utility
restructuring legislation.
--
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