| Post

More on PG&E’s “Green Option” from Greenwire

In California, questions swirl around new voluntary renewable energy program

Greenwire by Debra Kahn – May 14, 2012

Despite pitfalls and naysayers, California’s largest and most troubled power company is plugging its latest “green” efforts.

Northern California’s Pacific Gas and Electric Co. unveiled a new “green option” last month that would allow customers to pay extra to have their electricity usage covered by renewable energy certificates, or RECs, which represent the environmental attributes of renewable energy, but not the energy itself. They are intended to generate more revenue for clean po wer production.

“We’ve been hearing from customers for a number of years that they really want an opportunity to support 100 percent renewable power, and so there’s a lot of customer support already there,” said Helen Burt, PG&E’s chief customer officer.

The company estimates the program will cost interested residential customers about $6 per month above their normal electricity bills, the equivalent of “no more than three or four cups of coffee” a month, Burt said. The utility filed a request on April 24 with the California Public Utilities Commission to start the program and is hoping to get approval by February 2013.

But PG&E has stumbled before in the voluntary green market. In 2007, it offered customers carbon offsets through its ClimateSmart option, but due to low demand, it had to dip into shareholder money to meet its goal of offsetting 1.36 million tons of carbon dioxide.

It has also had more than its share of black eyes in the pa st few years, including a 2010 natural gas pipeline leak in a Bay Area neighborhood that killed eight (E&ENews PM, April 19). Earlier this year, it became the first utility to offer an opt-out program for its “smart” electricity meters, after a small group of customers launched months of protests (Greenwire, Feb. 2). And the company spent $45 million in 2010 on a failed ballot measure that many saw as a tactic to squash competitors; it would have required local governments to get voter approval before forming public power agencies.

Companies seeking to improve their image commonly hit upon themes of choice and freedom in their messaging, a corporate public relations expert said.

“It’s a PR benefit to say, ‘We’re really being responsive, creating an opportunity for a customer to have a choice,'” said Matt Seeger, a communications professor at Wayne State University in Detroit and author of the bo ok “Communication and Organizational Crisis.” “Many organizations use choice or freedom as part of their larger image or branding. They’re trying to play into these messages of choice and freedom, and those are widely shared social values.”

This time around, PG&E is not asking the state for permission to use general customer funds for marketing or administration, as it did with ClimateSmart. That means the program won’t have to meet any specific targets and will be completely funded by voluntary customer payments.

A company spokesman said he thought the RECs would be more appealing to customers than the offsets program.

“I think it’ll be both more quickly understandable by customers and in addition not so critical how many customers sign up,” said Jonathan Marshall.

But even though it is designed specifically to avoid raising general electricity rates, it is still raising consumer advocates’ ire. One group says it won’t encourage any additiona l renewable electricity generation, no matter how many people sign up.

“There is not a single iota of difference in the Western grid based on the model PG&E has proposed,” said Matt Freedman, an attorney with the Utility Reform Network, a San Francisco-based nonprofit. “It’s perpetuating a type of fraud on customers to tell them you’re signing up for renewable power and you’re helping make a difference when that’s not true.”

PG&E should be making long-term commitments to spur the construction of new facilities that actually need the money, rather than buying credits generated by existing wind and solar, he said. “They’re just throwing money at people who don’t need it,” Freedman said.
Aiming at local green programs?

Some observers are even more skeptical of PG&E’s motives. The memory of the 2010 PG&E ballot initiative is fresh in their minds.

PG&E’s solicitation of letters of support from Northern California mayors is “a mov e clearly designed to discourage local governments from starting their own green power programs,” former California Public Utilities Commission administrative law Judge Steven Weissman wrote in a blog post last month.

Proponents of those green power programs, known as “community choice aggregation,” or CCA, are also suspicious. “It is clear to us that this is an effort to undercut those CCAs, which try to pitch greener energy than what PG&E currently provides,” said Al Weinrub, a coordinator for the Local Clean Energy Alliance.

Others don’t see PG&E’s program as problematic. Several of the cities that are supporting it had previously considered starting CCA programs, an arrangement permitted by a 2002 state law in which a town or county buys electricity on the open market but still uses the incumbent utility’s infrastructure to deliver it.

“At this point, it’ll provide an option that’s currently not available, at least in the near term,” said Eri k Pearson, a senior planner for the city of Hayward, whose mayor wrote a letter supporting the program. “I think it’s going to be an improvement, at least for Hayward.”

In Marin County, home to the state’s only CCA, officials are now planning to expand service to their entire jurisdiction, hoping to sign up all 95,000 homes and businesses by July. And the city of Richmond is in talks to join Marin; its City Council is scheduled to vote tomorrow on whether to add its 35,000 customers to the program.

“We’re not too worried about it,” said Marin Energy Authority spokeswoman Jamie Tuckey of PG&E’s option. “It’s a different type of program.”

San Francisco, which is also pursuing a municipal electricity program, is hoping to sign an energy procurement contract with Shell Energy North America and begin service as soon as late 2012. It plans to add local renewable energy generation as well, to create local jobs and some long-term price stability.

“It’ s always a good thing when a utility offers a green program to their customers, but it doesn’t change the fact that we are doing a local CCA and our CCA will offer tangible, local benefits that the PG&E green-pricing program will not offer,” said Charles Sheehan, a spokesman for the San Francisco Public Utilities Commission.

Richmond Mayor Gayle McLaughlin, a member of the Green Party, said she was still interested in joining Marin’s program even with PG&E’s new offering. “I see MEA as by far the better alternative to the large conglomerate PG&E,” she said in an email. “We are very much interested in local energy projects that offer our residents much-needed jobs as well as provide sources of renewable energy.” MEA is pursuing two solar projects of about 1 megawatt each that it hopes to bring online by 2014.

Peter Miller, a senior attorney with the Natural Resources Defense Council who supports PG&E’s new program, said he did not think the new o ffering would detract from local movements, because they are fueled by more than just a desire for more renewables.

“What is it that’s really motivating communities and localities to move to community choice?” he asked. “To the extent it’s just antipathy towards PG&E, this won’t affect it at all.”