PG&E Customers Can Pay More to Be Greener

Another green rip off from PG&E

Pacific Gas and Electric Co. wants to give its customers a way to support more renewable power—for a price.

California’s largest utility on Tuesday proposed offering its 5 million customers a “Green Option” that would help fund wind farms, solar plants and other forms of renewable energy generation throughout the western United States.

Those who choose the option would pay a little more on their monthly bills, an estimated $6 on average.

PG&E would use the money to buy “renewable energy credits” – essentially, certificates showing a particular wind farm or solar plant generated a set amount of electricity on a certain day. The customers would not be buying the electricity itself, but their cash would help fund the facilities.

Renewable power accounts for about 20 percent of PG&E’s electricity, according to the company. Like California’s other large, investor-owned utilities, it is required by state law to increase that amount to 33 percent by the end of 2020.

Customers want more

But many PG&E customers want more, said Jan Berman, senior director of customer energy solutions.

All of the money paid by Green Option customers for electricity generation would be spent on renewable power – either through contracts PG&E already has with geothermal, wind and solar developers, or through the credits.

“They would be greening up and above the amount of renewable power they’re already paying for,” Berman said.

The program requires the approval of the California Public Utilities Commission. PG&E filed the Green Option proposal with the commission Tuesday and could start the program next year.

It wouldn’t be the first time PG&E asked customers to pay a little extra to fight global warming.

In 2007 the company, with great fanfare, started Climate-Smart, which offered customers a way to go “carbon neutral,” offsetting the greenhouse gas emissions from the power plants that supplied their electricity. Money from participating customers helped fund projects – such as forest restoration – that fight the buildup of greenhouse gases in the atmosphere.

But ClimateSmart signed up fewer than 31,000 customers, a small fraction of the 168,000 PG&E predicted. Critics labeled it a waste of money, especially because the program’s $16.3 million marketing and administrative costs were paid by all PG&E customers, not just those who volunteered. The company shut down ClimateSmart last year.

PG&E devised the Green Option as a successor to ClimateSmart, one that could find more acceptance among customers. The program’s annual costs, estimated to start at about $1.2 million before falling below $200,000 within three years, would be borne only by participating customers, according to the company.

Other utilities already offer similar choices.

The Sacramento Municipal Utility District began its Greenergy program in 1997, pooling money from participating customers to pay for several renewable power projects in Northern California as well as buy renewable-energy certificates, better known as RECs. About 52,000 customers are enrolled in Greenergy, said Wade Hughes, the program’s manager.

“People like the ability to participate in renewable power locally,” he said.

Marin Clean Energy offers its customers two options, “Light Green” – 50 percent renewable power – and “Deep Green” – 100 percent. In each case consumers are buying a combination of renewable power and RECs. The coalition of Marin County and city governments that created Marin Clean Energy in 2010 as an alternative to PG&E saw the effort as a way to increase the use of renewable power.

Opposing public power

PG&E opposed the creation of Marin Clean Energy, and the Green Option could give PG&E ammunition the next time local governments try to create their own public power services, a move San Francisco’s government is currently pursuing.

But that isn’t the program’s purpose, Berman said.

“The primary benefit is offering customers an option they’ve indicated they wanted,” she said. “And a number of cities have indicated they want it as well.”

Not everyone is convinced that RECs, by themselves, do much good.

A solar plant or wind farm creates an REC every time it generates a megawatt-hour of electricity. That REC can be sold to utilities along with the electricity, or the REC and the electricity can be sold separately. If one utility buys the REC, however, the company that buys the electricity can’t claim any environmental benefit from buying the power. Utilities use the RECs to fulfill their renewable power requirements under California law. However, RECs purchased under the Green Option program will be over and above the state requirement.

Matt Freedman, staff attorney for The Utility Reform Network watchdog group, said only long-term REC purchases can make a difference in helping renewable power projects build new plants. Otherwise, whoever buys the RECs is simply paying for a project that would have been built anyway, or already has been built.

“These short-term purchases don’t make any difference,” Freedman said. “They just fatten the bottom line of the project developers.”