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The Easy Way to Use Renewables: Buy Clean Electricity

November 17, 2009 - 8:45pm


Clean air means a lot to me. My wife and I had a small solar electric system installed on the roof of our house that produces about 2% of the annual electricity consumed by our all-electric house. We don't have a large south-facing roof, so we couldn't easily install a larger system. But what about the remaining 98% electricity that we need to buy?

About half a dozen years ago we signed up for 100% wind electricity after our state deregulated its electricity industry. We didn't have much of a choice to purchase "green" electricity. Only two utility companies offered electricity produced by renewable energy to residents of Maryland where I live. One is a subsidiary of our existing electric company. The other is an affiliate of the local natural gas company. Our electric company subsidiary offered one-year contracts; the gas company affiliate offered one- and two-year contracts. We sometimes went with one company, sometimes with the other, depending on the rates they offered. For billing purposes it didn't matter which company we signed up with—our local electric company still supplied our electricity and billed us. The difference was that our bill now had an insert saying how much of the bill was being paid to the renewable energy supplier.

Whenever our contract was up and I checked the rates, typically the 100% wind was being offered at two or two-and-a-half cents per kilowatt-hour more than the conventional electricity that is produced mainly by coal and nuclear energy here in Maryland. So at the start we were paying a 20%–25% premium to buy wind electricity. We certainly weren't doing it to save money. But in the long run, we are hoping that if enough people purchase renewable energy electricity, the price will eventually come down.

I had read a few years back where the price of wind electricity actually dipped below the price of the conventional electricity in the city of Austin, Texas, and in the state of Colorado. So many people signed up for it that they had to be placed on waiting lists—there just wasn't enough of wind-generated electricity to go around. Eventually, supply and demand evened out, and the highly prized wind became more expensive.

This past spring, when our one-year contract was set to expire, I noticed that the natural gas affiliate was offering two-year contracts at a rate only slightly higher than the conventional electricity. NOTE: It's hard to compare. Our local electric utility charges higher rates in the summer months than during the rest of the year. The renewable energy contracts are a single rate for the entire length of the contract. To further complicate comparisons, the rates for the conventional electricity are posted at most one year out. But I was delighted to see the price premium for the wind electricity come down that I eagerly signed up for a two-year contract. During the peak summer months, I was actually paying a penny a kilowatt-hour less than for the coal- and nuclear-generated electricity. It felt good…for a few weeks.

Then I received a flyer in the mail promoting a company that offered one- and two-year wind contracts at a penny-and-a-half per kilowatt-hour lower than I had just contracted for! Oh well, c'est la vie. This company had an agreement with the same natural gas affiliate that supplies my wind electricity—those who sign up continue to be billed by their regular electric utility, just like I am. These wind rates were lower than the coal/nuclear electricity rates offered by my utility for both summer and winter through May 31, 2010. My utility hasn't posted rates yet for June 1, 2010 or later. It was too late for me to switch, unfortunately; I didn't want to pay the penalty to break my new 2-year contract.

My neighbor Matt, who works for the local housing co-operative, has been very active in promoting wind electricity in our community. He and I are also members of the Greenbelt Advisory Committee on Environmental Sustainability. Matt got the company to agree to donate $15 to our city's community foundation for every new city resident who signs up. He promoted the wind plan at a meeting of the housing co-op. Responses were impressive. The company recently presented a check for $1,200 to our community foundation for 70 residents who signed up. And that's only the number of people who reported that they are Greenbelt residents. I'm sure many more signed up. We collaborated on an article in our local weekly newsletter and I promoted wind purchases at local events, as well as at work.

If you're interested in signing up for "green" electricity, check out this list of utility programs. Don't see your utility listed? Ask your state energy office. If you're currently paying on a budget plan, before switching ask how signing a clean energy contract will affect your monthly payments.

Even if no firm offers it in your territory, you still have options to green your electricity supply. The new wind supplier mentioned above actually sells Renewable Energy Credits ("RECs" or "green tags") from wind power farms situated across the United States, bundled together and supplied by the local natural gas affiliate, a licensed retail energy supplier in my state. Check out this list of green tag suppliers. You can pay a premium as little as 0.4 cents a kilowatt-hour. Moreover, you have the choice of buying not only wind certificates, but those of other renewable energy sources as well, including solar, biomass, geothermal, landfill gas, and hydro power.

One disadvantage is that in most cases you won't be able to have your electric company bill you for the green tags. You'll have to calculate your own electricity usage in kilowatt-hours. You may then purchase enough tags from the supplier to cover your usage or any percentage thereof. One advantage, however, is that you may purchase green tags to not only cover your electricity usage, but to cover other fossil fuel usage as well. You'll just need to do the conversions. In this way, it's actually possible to lead a net-zero carbon life, even if you must burn fossil fuels for transportation, at home, or away from home.

NOTE: In none of the above cases will wind or other "green" electrons be delivered to your house. The firm you contract with will buy enough green tags from a renewable energy supplier, such as a wind farm or solar installation, to cover its commitment with you. The electrons mingle with all of the other electrons on the power grid. Your dollars, however, get passed on to pay renewable energy generators, helping them to build more renewable energy power plants.

Note also that it makes sense to weatherize and insulate your home before thinking of renewable energy, whether you buy it or generate it yourself.