Green power marketing claims: A free ride on conventional power?

Electricity Journal

Volumn 12, Issue 6, 1999, Pages 32-40

  Glaser, Peter S ^a  

^a Hardy and Bacon   (United States)

Author keywords

[No Author keywords available]

Indexed keywords

CONVENTIONAL POWER; GREEN POWER; POWER MARKETING;

MARKETING;

EID: 0033164160     PISSN: 10406190     EISSN: None     Source Type: Journal    
DOI: 10.1016/S1040-6190(99)00047-0     Document Type: Article

References (36)

1. California Renewable Energy Board, How Emerging Green Markets Help Respond to Global Change, Nov. 16, 1998.
2. See study by Xenergy, Inc., reported in Util. Env't Rep., March 12, 1999, at 7.
3. See, for example, E. Almquist and S.A. Piotroski, The power of brand equity: incumbency's advantage, Elec. J., March 1999.
4. Contrary to what many in the green community may believe, coal-fired electric generation is subject to increasingly stringent environmental regulation under the Clean Air Act, which requires the attainment of air quality that is protective of the health of all Americans, with a margin of safety. See Clean Air Act, Section 109, 42 U.S.C. § 7409. While that level of air quality has not yet been attained every day throughout the country, it is no accident that the country's air quality has improved dramatically in the last two decades at the same time that coal-fired electric production has increased significantly. See Energy Ventures Analysis, Inc., The myth of the dirty power plant: How clean air act programs achieve their air quality goals, Nov. 1996. See also any of the annual Environmental Protection Administration Air Quality Trends reports, all of which detail the significant progress being made in cleaning up the air.
5. Mills, McCarthy & Associates, Sustainable Development and Cheap Electricity, 1992.
6. Id.
7. Id.
8. Mills, McCarthy & Associates, Does Price Matter? The Importance of Cheap Electricity for the Economy, 1995.
9. The National Renewable Energy Laboratory reports that only a handful of utilities are attempting to market green power to larger wholesale or commercial customers and that green marketing success in customer choice states has been focused on residential customers. Swezey and Houston, Information Brief on Green Power Marketing, Second Edition, National Renewable Energy Laboratory, Feb. 1998.
10. Energy Information Administration, U.S. Sales to Ultimate Consumers, Associated Revenue and Average Revenue Per kWh by Sector, 1997.
11. For a pessimistic (realistic?) view by renewable resource advocates of the prospects of green marketing to create meaningful market share for renewable resources, see Rader and Short, Competitive retail markets: Tenuous ground for renewable energy, Elec. J., April 1998.
12. E.g., Energy Information Administration, Annual Energy Outlook 1998, and Challenges of Electric Power Industry Restructuring for Fuel Suppliers, September 1998. Also, Resource Data International, Inc., Energy Choices in a Competitive Era: The Role of Renewable and Traditional Energy Resources in America's Electric Generation Mix, April, 1995; Reality Check, a Reply to the National Renewable Energy Laboratory's Critique of Energy Choices in a Competitive Era, Nov., 1995; and Renewable Resources Under the Bright Light of Peer Review, April 1997.
13. Elec. Daily, Feb. 23, 1999. The article reported that the Administration had asked for significant new funding from Congress for renewable technology research and stated a goal of tripling non-hydro renewable capacity to 25,000 MW by 2010. Dan Reicher, Assistant Secretary of Energy for Energy Efficiency and Renewable Energy, conceded, however, that total U.S. capacity is currently more than 750,000 MW. Adding less than 2,000 MW of renewable capacity per year, assuming that goal could be accomplished, will not make a significant dent in emissions from fossil resources.
14. LD 1804, § 3210, codified in M.R.S.A., Title 35A, Ch. 32.
15. Id.
16. Maine Public Utilities Commission, Order in Docket No. 98-619, Renewable Resource Portfolio Requirements, Dec. 2, 1998.
17. See www.greenmountain.com
18. See Green-E Web site at www.green-e.org.
19. A number of states as a part of their restructuring efforts are requiring or considering requiring that electric sellers disclose the emissions associated with their products. Section 201(b)(4) of the Administration's proposed electric restructuring legislation would require electric sellers to disclose to consumers "information concerning the type of energy resource used to generate the electric energy and the environmental attributes of the generation (including air emissions characteristics)." Whether the typical electric consumer can be expected to make educated decisions based on emissions data reported in a mailing from his electric seller (or even to read that information) may be problematic. A number of states are also considering a requirement that sellers making green claims document those claims.
20. At the urging of environmental parties, the 3.5-MW Edwards Dam in Maine became in 1997 the first dam that the Federal Energy Regulatory Commission ever ordered removed.
21. Energy Information Administration, Renewable Energy Annual 1998 with Data for 1997. Evidently in recognition of this problem, the Green-E Web site states that a project is underway with the environmental organization American Rivers to develop a definition of "low-impact" hydro.
22. Public Citizen, Green Buyers Beware, a Critical Review of "Green Electricity" Products, 1998.
23. Supra note 11, at 73.
24. Elec. Daily, March 17, 1998.
25. Supra note 22, at 7.
26. Supra note 22, at 8, 26. Evidently in recognition of the problem of the new versus old renewables problem, the Green-E Web site states that there is under consideration for future application a requirement that Green-E certified marketers will have to purchase at least some, currently undefined, amount of new renewables. See Green-E Web site at www.green-e.org. Nevertheless, at the current time, one of the leading green marketers, Green Mountain Energy Resources, is offering two Green-E certified products: one consists of 50 percent renewables but with only 3 percent new renewable content, and the other consists of 100 percent renewable resources but with only 5 percent new renewable content. See www.greenmountain.com.
27. Resource Data International, Inc., Energy Choices in a Competitive Era, the Role of Renewable and Traditional Energy Resources in America's Electric Generation Mix, April, 1995, from 2-9 to 2-13.
28. See, e.g., statement of Natural Gas Supply Association Chairman Richard Sharples opposing the renewable resource mandates in the Administration's electric restructuring proposal in Inside FERC, April 19, 1999.
29. Geothermal resources do supply electricity at very high capacity factors, but geothermal resources are located almost exclusively west of the Mississippi and in insufficient quantity ever to supply more than a small amount of needed power. Hydro power could also supply baseload power, but the trend in the United States is toward fewer rather than more dams, owing to concerns expressed in the environmental community.
30. H. Linden, Let's focus on sustainability, not kyoto, Elec. J., March 1999. The combustion of waste biomass (as compared with dedicated wood crops) currently represents a significant portion of the nonrenewable market. Energy Information Administration, supra note 21. However, the availability of waste biomass is, by definition, limited both in the amount of biomass available and the areas of the country in which such waste is available. To make a dent in the nation's base-load electric requirements through the use of biomass requires dedicated wood crops, yet there are currently no dedicated wood crop renewable resource projects in operation.
31. Linden, supra note 30, at 63-64, although Linden termed this land requirement "manageable."
32. Resource Data International, supra note 27 at 2-41. RDI estimated that it would take 46 percent of all U.S. land area, including Alaska, that is cropland, meadows, and pastures to replace 1996 coal consumption for generation. See RDI, The Economic Risks of Reducing the U.S. Electricity Sector, July 1997.
33. Supra note 27, at 2-10.
34. These problems are catalogued extensively in Bradley, Renewable Energy: Not Cheap, Not Green, Cato Policy Analysis No. 280, Aug. 27, 1997.
35. There are many studies in existence of the theoretical possibility of wind resources in the United States, but the only meaningful amount of wind resources currently in existence is in California. A number of new projects have been proposed and will evidently be built in other states, but not in significant numbers east of the Mississippi.
36. Serchuk and Singh, Expanding Markets for Photovoltaics: What To Do Next, Renewable Energy Policy Project Special Report, Dec. 1998.