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Green Electricity: It's in the Eye of the Beholder

Fortnightly Magazine - February 15 1998

difficult, if not impossible, to "claim that electricity used by a given customer came directly and exclusively from that customer's supplier."

Many electricity industry players are so new, Milford says, "they may not know the rules." He hopes that CLF will get something approved on at least an interim basis before March 1 (em the date retail access is scheduled to begin in Massachusetts (em because of the concern that since companies are already advertising, "misleading or confusing advertisements might lead to cynicism and confusion among customers, and that could harm green power."

Janice Frankel, a lawyer with the FTC's enforcement division, stresses, however, that the FTC is a reactive body; it won't draw up any new guidelines until the need is shown. "This is still a very new industry," she says.

Disclosure Standards

Hand-in-hand with the push for advertising guidelines is the movement to require disclosure of generation sources. In 1996, the National Association of Regulatory Utility Commissioners passed a resolution calling for uniform disclosure standards of price, resource mix and the "environmental characteristics of¼ electricity purchases."

In his industry restructuring bill, HR 1960, Rep. Edward J. Markey (D-Mass.) would require the FTC, in consultation with the EPA and the Department of Energy, to issue disclosure rules by Jan. 1, 1999 that would cover generating source data, air and water emissions data, reliability data and price information. In S. 687, Sen. James M. Jeffords (R-Vt.) proposes to bring the Food and Drug Administration and the Federal Energy Regulatory Commission into the decision-making process, as well.

States are getting into the disclosure business, too.

Last November, The Regulatory Assistance Project in Maine presented its findings on "Uniform Consumer Disclosure Standards for New England," to the New England utility commissions, which jointly had requested the study. The report recommends, based on customer research, that companies should use an "informative, succinct, easily understood and widely available" label that would convey four key pieces of information: price, contract terms, fuel mix and air emissions. Not only would such information be helpful to consumers, the report notes, but a disclosure policy "will also protect suppliers from unfair trade practice claims by setting clear rules of the road." The report also noted that disclosure might offer a secondary benefit: "Depending on the level of customer demand, it can result in cleaner resources and less pollution."

Janet Gail Besser, acting chairwoman of the Massachusetts Department of Telecommunications and Energy (the former Department of Public Utilities), was closely involved in the RAP's disclosure project. It's probably no coincidence, then, that the Massachusetts restructuring law, HB 5117, which Gov. Paul Cellucci (R) signed on Nov. 25, orders the DTE to publicize uniform labeling regulations that will apply to all electricity suppliers in the state.

The Illinois restructuring law signed by Gov. Jim Edgar (R) in December, HB 362, requires quarterly disclosure of fuel mix and air emissions as of Jan. 1, 1999. The law specifically calls for a breakdown by percentage in "pie-chart" format.

In Pennsylvania, the public utility commission proposed a rule requiring that suppliers provide the most recent