Fact Sheet: Buying Clean Electricity

The electricity industry is changing. At least 50 percent of customers have the option to purchase renewable electricity directly from their power supplier. Such power is sometimes referred to as "green power" or "clean power."

In most states, you can buy clean power through one or more of the following programs:

Green pricing -- Some power companies are now providing an optional service, called green pricing, that allows customers to pay a small premium in exchange for electricity generated from clean, renewable ("green") energy sources. The premium covers the increased costs incurred by the power provider (i.e. electric utility) when adding renewable energy to its power generation mix.

Competitive electricity markets -- In some parts of the country, consumers can choose not only how their electricity is generated, but also who generates it. Just as the long-distance telephone industry was restructured, certain states have restructured their electricity industry in order to allow competition among electricity generators. In some of these states, clean power generators, who specialize in producing electricity using renewable sources, are taking advantage of the restructured market to sell clean power products to residential, commercial, and wholesale customers.

Some default suppliers are also teaming with these competitive marketers to offer more green power options. Efforts to sell clean power are aimed at consumers who will choose to pay slightly more for renewable energy products and services that reflect their environmental values. The small premium you pay offsets the additional costs power companies incur in purchasing and/or generating electricity from renewable sources.

Green certificates -- Buying green certificates allows you to contribute to the generation of clean, renewable power even if you can't buy clean power from your power provider (i.e. electric utility) or from a clean power generator on the competitive market.

An increasing number of clean power generators are now separating the power that they sell to power providers from the environmental attributes associated with that power. These environmental attributes, called green certificates (also known as "green tags," "renewable energy certificates," or "tradable renewable certificates"), are then sold to companies and individuals who want to help increase the amount of clean power entering the nation's electricity supply.

By separating the environmental attributes from the power, clean power generators are able to sell the electricity they produce to power providers at a competitive market value. The additional revenue generated by the sale of the green certificates covers the above-market costs associated with producing power made from renewable energy sources. This extra revenue also encourages the development of additional renewable energy projects.

Several organizations offer green energy or renewable energy certificates that can be purchased separate from your current electricity service.

For more information on buying green power, go to http://www.eere.energy.gov/greenpower/buying/index.shtml (a Web page of the U.S. Department of Energy's Office of Energy Efficiency and Renewable Energy). To find out which organizations offer green power in your state, go to http://www.eere.energy.gov/greenpower/buying/buying_power.shtml.

The tips are from the U.S. Department of Energy.

This article originally appeared in the 02/01/2007 issue of Environmental Protection.

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