NCPA - National Center for Policy Analysis


September 29, 2008

More than 750 utilities across the country now offer customers the chance to pay a premium on their electricity bills to generate "green power," and more than 600,000 U.S. households have signed up for these programs.   But given their eagerness for environmental bragging rights, many of the power companies are strangely reluctant to explain with specificity how extra payments from consumers produce green energy that would not be generated otherwise, says BusinessWeek.

A recent investigation found that a good portion of money is actually going toward marketing, says BusinessWeek.  For example:

  • In Florida, Power and Light's Sunshine Energy program serviced 38,308 customers, but when less than one-half of consumer contributions were found to be going to renewable energy projects, the program was killed.
  • Georgia Power's Green Energy program services 4,042 customers, but the company charges a premium even though green energy is actually cheaper than conventional alternatives.
  • In Indiana, Duke Energy sponsors the Go Green program that could provide green energy to 1,156 customers, but in 2007, less than 18 percent of voluntary consumer contributions went to renewable energy development.
  • Iowa's Alliant Energy's Second Nature program could provide green energy to 7,656 customers, but more than 50 percent of expenditures go to marketing and administration costs, not green energy.
  • Companies like Dominion in North Carolina provide the NC GreenPower program to over 14,000 customers, yet only 19 percent of program spending in 2007 was directed to renewable energy projects.

Moreover, buying gas-powered electricity from, say a landfill, does not appear to achieve any additional environmental benefit.  The renewable gas-from-trash is now actually less expensive than conventional sources like coal, adds BusinessWeek.

Source: Ben Elgin and Diana Holden, "Green Power: Buyers Beware," BusinessWeek, September 29, 2008.

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