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Green Price Stability

New approaches account for the economic benefits of renewables.

Fortnightly Magazine - January 2009

to infrequent, large failures of generation and transmission), real-power loss replacement (adjusting for system losses) and voltage control (generation, transmission).

24. Edison Electric Institute (April 2005). Glossary of Electric Industry Terms . Washington, D.C.: Edison Electric Institute; p. 3 .

25. “Automatic adjustment clauses” can be used for other purposes as well. See, The Brattle Group, “ Electric Utility Automatic Adjustment Clauses: Benefits and Design Considerations ,” prepared for the Edison Electric Institute, November 2006 .

26. These utilities include: Alliant Energy, Edmond Electric, Holy Cross Energy, Madison Gas & Electric, OG&E Energy Services, We Energies, and Xcel Energy.

27. The following discussion refers to the General Service (Gs-1) rate schedule.

28. Of course, the portion of rate increases for distribution, transmission, and administrative costs would need to be allocated appropriately to green pricing program customers.

29. Utilities that have offered fixed green rates include Austin Energy, Clallum County PUD, and Eugene Water and Electric Board (EWEB). EWEB’s Windpower program, which was launched in 1999, was structured so that a “windpower energy charge” was substituted directly for the utility’s energy charge. The program initially was offered at a premium of 2.7¢/kWh over standard rates, but the effective premium fell over time, and was about 0.91¢/kWh for an average customer at the end of 2005. The program became fully subscribed in 2006 and the utility subsequently launched a new program with a different pricing structure. Under the Clallum County PUD program, which was launched in 2003, customers can purchase green power to meet 100 percent of their electricity needs at a fixed rate of 6.9¢/kWh, which initially represented a premium of 0.7¢/kWh compared to the utility’s standard rate.

30. Like many other utilities, Austin Energy also includes some portion of its energy costs in base rates and thus its GreenChoice customers are not fully excluded from paying these costs.

31. Originally, this was a minimum 10-year commitment.

32. Bird, L.; Kaiser, M. (2007). Trends in Utility Green Pricing Programs (2006) . NREL/TP-640-42287. Golden, CO: National Renewable Energy Laboratory.

33. NREL (April 22, 2008). “ NREL Highlights Leading Utility Green Power Programs .” News release. Accessed April 28, 2008 .

34. ibid.

35. Northway, M. (November 2001). “Marketing Green Power - Reaching Your Customer.” Presented at the Eugene Water and Electric Board workshop on Seattle, WA.

36. Smith, D. (June 12, 2008). Personal communication. Green Mountain Power. Colchester, VT.

37. Aquila (March 14, 2001). “ UtiliCorp to Purchase Power Generation From Largest Wind Project Constructed in Kansas .” News release. Accessed 2008 .

38. UtiliCorp had been selling a premium-priced wind product to its retail customers since 1999. With the announcement of an additional, larger project, the utility notified its "green pricing" customers that it discontinued the premium product charge and incorporated the renewable energy supplies into its base rates (see http://www.eere.energy.gov/greenpower/markets/pricing.shtml?page=2&companyid=260).

39. This primarily is due to increased availability and verification of RECs, as electronic REC tracking systems are now available in regions across the nation

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