Green Pricing: The Bigger Picture

Fortnightly Magazine - August 1996
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It's not just for residential consumers. Research suggests a

substantial niche market

of commercial

and industrial customers that are favorably disposed to green electricity.Seven utilities across the country have launched "green pricing" programs for residential electric customers. At these utilities, up to 3 percent of residential customers pay rate premiums to underwrite the construction and use of renewable electric generation. Research results from a number of studies suggest that an equal proportion of commercial and industrial (C/I) customers will also participate in green pricing programs. Although these C/I customers are fewer in number, they appear willing to pay dramatically more to support environmentally friendly electricity.

Historically, most programs and market research have targeted only residential customers. However, with the interest of C/I customers added to that of residential consumers, the niche market for green pricing doubles in size.

Residential Programs

Some of the green pricing programs currently in place sell renewable electricity to residential customers as a product. The utility charges a premium price to customers who wish to purchase some or all of their electricity from renewable sources. In other

programs, customers contribute a premium earmarked to benefit a particular environmental or resource conservation program involving renewable electric generation. A third option "rounds up" customers' bills to the nearest dollar, with the added amount going to fund renewable energy.

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