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

Fortnightly Magazine - February 15 1998

SOME PEOPLE WANT TO KNOW WHAT "GREEN POWER" means (em and, by extension, "environmentally friendly." Does that mean low emissions, including nuclear energy? Is renewable energy automatically green? Should the simple fact of compliance with all standards imposed by the Environmental Protection Agency afford the right to advertise power generation as green?

Consumers, agencies and state and federal officials want truth in advertising. Proponents of alternative generation claim consumers are willing to pay more for cleaner, greener energy. Residential customers of Detroit Edison, for instance, pay more than $6.50 additional per month to support solar energy. In Colorado, the Governor's Office of Energy Conservation is using special funds to help offset the additional cost it takes to power the governors' home with wind. Only clear industry guidelines can ensure that everyone is actually getting what they're paying for.

Green power certification is proceeding on several different fronts. Commissions and legislatures are mandating resource disclosure of generation sources. Legislation at both the state and federal level are investigating the use of renewable portfolio standards. The Federal Trade Commission is considering establishing voluntary guidelines for electricity advertising like those already established for other retail products in the FTC's 1992 "Guides for the Use of Environmental Marketing Claims" (16 C.F.R. 260).

Guiding Advertisers

In December, at the DOE/NARUC electricity forum in Washington, D.C., attendees pressed panel experts for a definition of green power. From the audience rose Will Paul, representing the International Brotherhood of Electrical Workers, declaring that he would prefer to see a ban on the word "green" in all electricity advertising campaigns, since the word can easily mislead consumers.

Elaine Kolish, associate director at the Federal Trade Commission's division of enforcement, who was also at the forum, acknowledged a lack of guidelines. She cautioned potential advertisers to think carefully about what message (em direct or implied (em that consumers will take away from product advertising.

The Conservation Law Foundation is circulating its proposed "Green Guides for Electricity" among the electricity industry and legislators. The document (em the third edition is dated Dec. 3, 1997 (em borrows language and format from the 1992 FTC guidelines for environmental marketing. It aims to be a "starting point to make the generic FTC guidelines industry-specific," says Lewis Milford, director of energy programs at the CLF's Vermont office.

The draft proposes guidelines for claims about the attributes of electricity or services connected with the generation, distribution or sale of electricity, "as they may appear in labeling, advertising, promotional materials, and all other forms of marketing, whether asserted directly or by implication, through words, symbols, emblems, logos, labels, certifications, depictions, company names, product brand names, or through any other means."

The bottom line? Product claims would be based on "competent and reliable evidence," just as the FTC requires in its environmental guidelines. That test will prove a challenge for companies vying to sell electricity, however. For, as the CLF draft guidelines point out, most customers would not maintain any direct wire connection to their power supplier in a world of retail direct access. It would be