Money. Mouth. Anyone?

Most people I know, including myself, say they’re in favor of “greener” energy sources — wind, water, sun, geothermal. It sounds so wonderful — making things go by using what the earth already provides for free.

So, here’s the question — are you willing to pay more green to go more green?

My electric energy provider (that’s new-speak for what used to be called the power company or electric company) made me quite an offer today: I can support fuel-free wind energy simply by paying more each month for the same amount of power!

And I quote: “A small additional charge [their emphasis] to your monthly Allegheny Power electric bill covers the added expense of delivering clean, renewable, fuel-free wind energy to the electric grid.”

Basically, I’d be paying for renewable energy certificates (RECs) (or rather, a piece of a REC). I know a little bit about RECs because I wrote a white paper on renewable energy for a client a while back. The concept is a little hard to understand (to put it mildly). Here’s the gist.

Burning fossil fuels to generate electricity has a positive outcome (electricity) and a negative outcome (greenhouse gas emissions). Using renewable energy resources to generate electricity has two positive outcomes: electricity plus no negative environmental impact. These two “positives” are decoupled and sold separately: the electricity is sold into “the grid” and the positive environmental attributes are sold as RECs. One REC equals one megawatt-hour of renewable energy produced. Buying RECs supports the use of renewable energy by subsidizing those who produce it. It’s also a way for companies and individuals to demonstrate their commitment to “going green” and to “offset” their use of fossil fuels.

(And no, I’m not making this up.)

Of course, the letter from the electric company explains nothing about RECs or what you’re actually buying for your extra dollars. I can simply check off whether I want to spend an extra $2.50, $5.00, $7.50, or $10.00 a month to purchase 100, 200, 300, or 400 kWh of renewable energy. (Note the discrepancy: 1 REC = 1 mWh, which is 1000 kWh. So in none of these options are you buying the equivalent of one REC or even half a REC).

The only mention of RECs comes in a footnote on the back of the letter, explaining that the Renewable Energy Certificates supplying the program come from 20% Pennsylvania wind farms, 20% PJM wind farms, and 60% MISO wind farms. It goes on to explain what PJM and MISO are — two different organizations handling electricity transmission in the Mid-Atlantic and Midwest regions.

So, how many customers of Allegheny Power getting this letter are even going to understand what the heck they’d be paying more for? (Other than the vague description that they are being “invited” to “boost the demand for fuel-free wind energy here in your home state and in the Midwest.”)

And, back to my original question, how many are willing to do it — to pay more green to go more green? To voluntarily spend more money to promote greener energy?

Maybe a lot? People spend more for lots of things they perceive as better for the environment — hybrid cars, organic foods, low-VOC paints. But for all these things, they also perceive return on their investment, such as saving money on gas, ingesting fewer hormones and pesticides, or breathing fewer chemicals.

But when the payback’s not quite so clear, so personal, will people be willing to pony up?

I’ll be curious to see and will be watching for future mentions of the Allegheny Renewable Energy Program and its enrollment figures, if they’re ever disclosed.

In the meantime, I’m not willing to part with any more of my hard-earned dollars. (I would be more likely to invest directly in a wind farm, as a shareholder, if I wanted to support wind energy). I suspect at some point soon (like if Cap-and-Trade becomes law) the decision will be made for me. And cost a lot more than $2.50 to $10 a month.

Today the world is the victim of propaganda
because people are not intellectually competent.
More than anything the United States needs
effective citizens competent to do their own thinking.
~ William Mather Lewis

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7 Comments

  1. facie said,

    Friday, September 18, 2009 at 8:55 am

    Honestly, no. Even if I were working, I don’t think I would, without really knowing what I was getting into (I am kind of cynical and distrusting). I try to do my part in other ways (using reusable bags, not wasting electricty or water, not using drive-thrus, recycling, etc.).

    I also think buying carbon offsets (or whatever those things are called) is at least a little bit of crap. You know, the stars who fly all the time or drive around in their giant cars and power their 10,000 square foot houses and then justify doing that by donating money to some carbon offset fund or whatever it is. I guess it helps, but how about don’t do half that bad stuff to begin with.

  2. Jay said,

    Friday, September 18, 2009 at 12:09 pm

    Thanks for starting this conversation. You raise the key question: how many people are willing to do this? To provide a brief answer: a lot of people do choose to sign up for the Allegheny Renewable Energy Program and many others like it across the country. Clearly, the idea of paying more for renewable energy isn’t for everyone. If it were, we’d have a lot more renewables in the grid right now. Some people feel that it’s the government’s responsibility, other people feel that it’s the utility’s responsibility and some people feel that they should take personal responsibility. It’s that diversity of opinion that makes this nation a pretty interesting place to live.

    The bottom line is that a lot of people do decide they want to have a hand in boosting the demand for new renewables into the grid. And those hundreds of thousands of people across the country have made a big difference in advancing renewable generation ahead of any legal mandates. I recently signed up for the PECO Wind program because I want to make a difference in PA from where I live outside Philly. And for full disclosure, I do work for Community Energy which is a partner on this program with Allegheny Power.

  3. WritingbyEar said,

    Friday, September 18, 2009 at 12:29 pm

    Thank you for commenting, Facie and Jay. I do think it’s interesting that utilities are giving people a choice to contribute, not simply saying “We’re having renewable energy as part of the grid, therefore, you the consumer must pay more for it.” Simply raising the cost of electricity for everyone (and earmarking the increase for renewables) is the easy way out. I appreciate that, so far anyway, it’s my choice. I also wonder about the long-term economics (if anyone really knows) — Will renewable energy always cost more (and is that the price we pay for a cleaner environment)? Or is it expected to become more cost-effective as its availability increases? I’m sure the answers are mixed, depending on what source you listen to. Time will tell.

  4. robbie said,

    Friday, September 18, 2009 at 3:36 pm

    My answer is a resounding NO! Inexpensive and abundant energy is what made the US the world’s only superpower. That is why developing countries refuse to do anything about “dirty” energy, and as well they should. This carbon crap is a way of holding back America and decreasing its economic power.

    On the other hand, many years ago (maybe 15), WLM signed up with a power group in Vermont (I think) to buy renewable energy. I think the name was Green Mountain. It was slightly more expensive but frankly, the only thing it did for me was make me feel better about myself while costing the company more money. Carbon dioxide is plant food. The US global warming nutcases are just now jumping on the now-discredited bandwagon that carbon dioxide has any harmful effects for planet earth.

    The economies of “green” energy production must make sense before it is to be used in large quantities. Until then, forget it!

  5. WritingbyEar said,

    Friday, September 18, 2009 at 3:56 pm

    Ah yes, I remember Green Mountain. (Didn’t choose it then; just read that it “exited the market” in PA in 2005.)

  6. Rege said,

    Monday, September 21, 2009 at 11:19 am

    I went to Community Energys” web site and noticed they sold carbon offsets. They also posted write-ups about their contribution toward stopping “climate change”. While of course wanting clean energy when I see these words I automatically think it’s grab for money and contol of your life. GO NUKE

  7. WritingbyEar said,

    Monday, September 21, 2009 at 12:21 pm

    I wrote about nuclear fuel many years ago — I, too, think it’s as clean and viable a source of energy as any. (Ask France and Japan.) Yes it has its dangers and has to be properly controlled and managed, but so does every other source of energy. Would I want a nuclear power plant “in my backyard” — if I didn’t have to look at it…


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