Environmentally friendly power is a victim of the energy crisis
Green power is dead. Long live green power.
When electricity deregulation laws were passed five years ago, one of the great promises of a competitive market was that it would allow small companies to compete with the large utilities and offer Californians an environmentally benign mix of “green power”—electricity generated solely from renewable sources such as wind and solar.
But now that the deregulation experiment has unraveled, those companies that marketed green power have begun to leave the state, forced out by the uncertainty of California’s unstable electricity market.
“We’re looking at the worst case scenario right now,” said Rick Counihan, spokesman for Green Mountain Energy, one of the largest green power marketing companies operating in the state.
He explained that when the energy crisis caused the collapse of the state Power Exchange, it became impossible for companies like his to market power: “We didn’t know what to charge people. The whole basis of how we were doing our pricing was gone.”
The final blow was dealt when Gov. Gray Davis signed legislation on Feb. 1 authorizing the Public Utilities Commission to forbid companies like Green Mountain to sign up new customers.
“We simply can’t do business in a state that tells us we can’t sign up any new customers,” said Counihan.
Earlier this month, Green Mountain announced that they would pull out of California, leaving nearly 60,000 of their customers to purchase electricity from their local utilities, which use only a small amount of renewable energy in their mix. Counihan wasn’t sure when or if Green Mountain would be back.
Statewide, Californians use a power mix that is about 11 percent green. That’s not bad compared to the nationwide average of just 2 percent. But the advantage of companies such as Green Mountain was that customers were assured that up to 100 percent of the electricity they were purchasing was renewable. And that spurred development of new green facilities.
Green Mountain helped get major solar facilities built in Berkeley and Hopland, as well as some of the first new wind farms built in 10 years. For the time being, those facilities will still generate electricity for about 8,000 of Green Mountain’s customers who signed onto a special program called “Breathe Easy,” which guaranteed them fixed prices.
Since deregulation passed, about 175,000 Californians opted to switch from their utilities to a green power company, such as Green Mountain Energy and Commonwealth Energy Corp.
Green power was never wildly popular. Only about 2 percent of Californians ever chose to sign up with alternative energy companies. Renewable advocates say the problem was not demand, but the raft of obstacles to green power that were present long before the current crisis.
First of all, it wasn’t easy to switch. For example, major utilities would not automatically allow new customers to choose an alternative power provider when they first sign up for service. Customers would have to proactively take the extra step of changing over to a green power provider.
And many have criticized an $80 million education campaign by the state intended to explain deregulation and to make consumers aware of the availability of green power.
“It was a complete failure. It was so confusing [that] it had the exact opposite effect than was intended,” said Kirk Brown with the Center for Resource Solutions, a renewable energy advocacy group.
While the current crisis has forced out most green power marketing companies, Brown thinks in the long run Californians will demand more renewable power in the mix, regardless of who sells it to them.
“The last time I checked, the price of wind is still free,” said Brown.
And there are pockets throughout the state where renewable energy is gaining ground. The Sacramento Municipal Utility District is one of a handful of public utilities that offer a green power option.
SMUD customers can sign up for the “Greenergy” program, which delivers 100 percent renewable energy for $6 per month extra on their utility bills. Currently, about 8,500 SMUD customers choose green power.
And while customers in Pacific Gas & Electric territory, such as Davis or West Sacramento, will no longer have the option to purchase green power, SMUD’s program is growing at a healthy clip. The Greenergy program is expected to expand to 13,000 customers by the end of this year, according to SMUD manager of marketing services Phil West.
Right now, all of the power for the Greenergy program comes from methane recovered from the county’s Kiefer landfill. But as the program grows, SMUD plans to invest in its own solar and wind power facilities. There are already plans to spend about $2 million for wind turbines at the Solano wind farm, which will generate electricity for both green power customers and for the SMUD’s overall energy needs.