Wind Power Reaches Out to Electric Utilities

In order to help utilities large and small navigate their way through the green power market, the American Wind Energy Association (AWEA) has published the Green Pricing Resource Guide, designed to introduce power providers to all the concepts they need to be aware of to create a successful green pricing program.

The guide is being released in conjunction with the Ninth National Green Power Marketing Conference being held in Albany, New York. Organized by the U.S. Department of Energy, the U.S. Environmental Protection Agency, and the Center for Resource Solutions, this conference features experts from the field exploring strategies to increase the development of renewable energy resources through customer choice. “The green power market is raising awareness of the benefits of using more renewable energy to customers across the U.S.,” said AWEA Executive Director Randall Swisher. “Already half of the electricity customers in America have access to a green power program, and with this guide and other efforts to educate utilities on the ease of creating a green power program, hopefully the number of programs will expand further still.” The guide was funded through the Department of Energy and written by Ed Holt and Merideth Holt. Ed Holt is an independent consultant on green power marketing issues and an advisor to AWEA. “Green pricing programs are good for utilities because it gives them a chance to learn about how to offer renewable energy to their customers,” Holt said. “It is good for customers because it allows them to exercise a choice in their electricity sources. And, of course, it is good for the community because it reduces the air and water pollution and global climate impacts from electricity generation.” Although utilities have a public responsibility to develop cost-effective renewable energy projects as part of their rate-based electricity supply, in order to jump-start the market for new renewable technologies, market leaders have pioneered the creation of programs – usually referred to as green pricing programs – where above-market renewable projects are developed for environmental and educational reasons and the difference in price is charged to a voluntary core of program subscribers. More than 500 utilities in 34 states now offer green pricing programs, according to the National Renewable Energy Laboratory (NREL). As of today, over 1,500 MW of wind power is in place to serve the green power market (enough to serve 400,000 homes), and an additional 300 MW is planned. Platts Research and Consulting predicts that the voluntary market will drive the development of over 10,000 MW of new renewable capacity by 2015 in the low scenario and 18,000 MW in the high scenario [Renewable Power Outlook 2003]. NREL reports that, in 2003, more than 1.2 billion kWh of renewable energy were sold through green pricing programs, an increase of more than 40 percent from 2002. The guide provides the case for why a utility would want to create a green pricing program, including satisfying customers and shareholders, educating customers and utilities themselves, improving environmental performance, and promoting electricity price stability, as well as meeting state requirements. It then goes through the nuts and bolts of creating a program, examining how to acquire the renewable supply, then how to price and market it, and finally, how to retain customers and evaluate the program. It looks in detail at what has worked – as well as what hasn’t – for other green pricing programs. The main focus of the guide is on green pricing programs, although most of the insights apply or can be adapted to green power marketing in restructured markets, and to a lesser extent to renewable energy certificates. AWEA has now made the guide available through the link below.
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