IIt’s ironic that in today’s market, as the cost of hedging against commodity price increases has declined, support for utility hedging programs has sunk to a historic low. The ideal time to hedge...
We Got Green?
<p>Not hardly. And now the FTC would leave consumers in the dark on some environmental claims.</p>
I don't quite get it about green power. Yes, I know that some marketers tout it as an unbridled success - proof that retail choice for electricity will unlock a flood of new power products and premiums, delivering untold benefits to energy consumers. And we at this magazine are as guilty of this as the next guy, having from time to time published articles on how green marketers have garnered retail market share in newly opened electric markets, such as California.
But green power is not a product. It's a gimmick. It has stolen center stage only because of a dearth of real value-added consumer products in electricity.
Suppose you visit a new car showroom, trying to decide between a Honda Accord and a Ford Taurus. The Honda salesman gives you his pitch: "We built our Accord with recycled steel, but Ford builds their Taurus with new steel produced from eco-destructive iron mines in Third world countries." If you're an ordinary American consumer, you laugh in his face.
Car buyers don't want recycled steel. They have no clue how their car was made. Instead, they want CD players. They want global positioning satellites and dashboard LCD screens that map out the route. They want leg room, cup holders and anti-lock breaks. Those are value-added products. They change the way the car works and the way the driver behaves. That's what products do. On the other hand, recycled steel is not a consumer product, but more properly described as a manufacturing process. The same goes for coal, uranium, wind, sunshine or natural gas, when used as boiler fuel.
This notion that green power marketers can hawk electricity based on the source and process of its manufacture, rather than its usable characteristics at the point of sale, simply underscores the dreary state of deregulation. It's sad to say, but our much-hyped emerging competitive market in electricity - itself as slow as molasses to develop - nevertheless has far outstripped the ability and ingenuity of retailers to come up with actual products to win the customer's fancy.
"IF SCARLETT O'HARA WERE ALIVE TODAY, we know what she wouldn't worry about," say consultants John Hanger, John Rohrbach and Peter Meadows Adels in the Sept. 14 issue of E3 (pronounced "E-cubed"), the newsletter they churn out of their eco-boutique, known as Citizens for Pennsylvania's Future, a nonprofit association.
"Overwhelmed by the sheer scale of air pollution, global warming and acid rain, Scarlett would do what most of us do. She'd think about it tomorrow," they say.
At PennFuture, Hanger, Rohrbach and Adels clearly come down as eco-boosters. Where I see snake oil, they see nirvana.
"Once largely considered a symbolic gesture ¼ required to satisfy a few regulators, renewable energy is moving toward the consumer and business mainstream. ¼ Retail competition and customers are making electricity generated from renewable energy a differentiated product with a higher value."
But I applaud their efforts in advocating a green power commodity