PG&E Cashing in on Climate Change

Utility companies are cashing in under the guise of fighting climate change, and PG&E is leading the pack.  TURN is demanding an end to wasteful spending by PG&E and other utilities, which routinely bulk up environmental programs with huge, unnecessary expenses for “administration and marketing.”  PG&E’s ClimateSmart is the most recent example.

ClimateSmart offers customers the option of balancing out their home's greenhouse gas (GHG) emissions with the purchase of carbon reductions acquired from a variety of projects certified by the Climate Action Registry.  PG&E charges residential customers an average of $3 a month to participate, and all PG&E customers contribute to the costs of the $16.4 million program through rates.

The bulk of the money, $12 million, is devoted to marketing and advertising.  PG&E initially justified the high marketing costs with claims it would jumpstart the program, create a national model, and entice 4.4% of customers to subscribe. Now in its third year, the program has only persuaded 0.6% of customers (other than PG&E employees) to subscribe.  At this much lower level of subscription, PG&E has spent approximately $400 to attract each customer currently subscribing to ClimateSmart.  At an average of $3 per month in, it would take a typical residential customer over 11 years just to pay for the marketing costs incurred on their behalf by PG&E.

In documents filed at the CPUC, TURN warns that PG&E faces the prospect of continuing to spend more to acquire customers than it will be able to devote to purchasing greenhouse gas reductions. TURN staff attorney Matt Freedman says PG&E has “the right idea, but the wrong approach.”   According to Freedman, there are two things that can be done to stop ClimateSmart from becoming a cash cow for PG&E.

“PG&E hasn’t burned through all of the money yet,” Freedman said.  “Instead of spending millions more to publicize the program, PG&E should simply use the remaining money to purchase greenhouse gas reductions on behalf of all of its customers.”  In addition, “PG&E Corporation must follow through on a commitment to purchasing 1.5 million tons of reductions”, a concession made in response to TURN’s original demand that at least some of the funding for the program come from corporate profits if customer enrollments are below PG&E’s projections.

Wasting money on green advertising instead of a real green agenda is nothing new for PG&E, which is why TURN is demanding more green for your green.