New Way To Promote Green Energy Would Show Up On Electric Bills

Feb 19, 2010

OLYMPIA, Wash. --Millions of Northwest electricity customers have the option to pay a little bit extra on their monthly bills to support “green energy.” In the coming years, that voluntary option could take a back seat to a mandatory, but invisible charge on electric bills. Policymakers along the West Coast are working on a new green energy incentive. It relies not on tax dollars, as is traditional, but rather on ratepayer dollars. Correspondent Tom Banse reports on how it would work.

So I've got my February power bill out of the mailbox. I bet you there's something in this envelope besides my statement.

Alright, an electricity bill for $31. Not bad. And what did I tell you, a bunch of promotional flyers... including this one for the utility's green power program. It invites me to pay four to ten dollars extra per month to switch to “clean energy.” The Northwest's large electric utilities all offer voluntary green power programs like this. But with the exception of Portland, the percentage of customers who've signed up is tiny. Washington State Representative John McCoy, standing in the wings of the state house, says renewable energy needs a bigger push.

John McCoy: “Right now, we're blessed and we're cursed by the Columbia River [hydropower], because you're getting it at 4 cents per kilowatt-hour. These newer technologies: anywhere from 12 to 24 cents [per kwh]. But we need to move on.”

According to McCoy, the best way to get more solar, wind and tidal power on the grid is to offer renewable energy generators a guarantee. Effectively, the state would say if you build it, your local utility must buy the juice. And not only that. The utility must agree to a long-term contract that covers generation costs, plus a decent profit. Solar developer Stanley Florek of Seattle's Tangerine Solar says the fixed, premium purchase price gives suppliers certainty they'll recover the high costs they pay upfront.

Stanley Florek: “You get that investment paid back with a modest return guaranteed on top. As a result, you may be foolish NOT to have a solar system or wind farm in your neighborhood because that property is sitting there not making money for your neighborhood.”

This incentive policy is most commonly called a “feed in tariff.” Last year, Oregon's Legislature adopted it in a pilot program limited to solar electricity. The details are still being argued about, as is the case in California. Supporters are trying to duplicate successes in Europe, especially Germany. This was one topic at a conference in Hamburg. State secretary for the environment Christian Maass credits the renewable energy rates for creating 100,000 ‘green' jobs in his country.

Christian Maass: “I can only recommend from the German experience that it's good, that it's something to copy from.”

That's not what utilities in Washington State concluded. Pretty much every single one lined up in opposition to legislation in Olympia this winter. Dave Warren of the Washington P-U-D Association says electricity demand fell during the recession and may stay down thanks to conservation.

Dave Warren: “We would be forced to power that we don't need and idle existing generation or have hydro that is very cost effective-- very cheap, actually -- being replaced by very expensive power.”

Warren notes it is ratepayers, not taxpayers, who shoulder the tab of this renewable energy incentive.

Dave Warren: “Any rate increases are tough to swallow.” Especially right now, he says.

In Germany, the above market price paid to wind and solar farm owners adds about three to five dollars to the average household's monthly power bill. Dave Warren offered a wide range for how much a similar policy might cost in the Northwest. He estimates rates could go up by as little as 0.03 percent to as much as 15 percent depending on how many customers a utility has to spread the costs across.