The sad fate of Florida Power & Light's green energy program should be instructive. Of course the program had to spend a ton of money on marketing -- it was asking ratepayers for charitable donations to a cause most of them weren't familiar with and didn't care much about. Given that most ratepayers weren't eager to educate themselves on how they could spend more money on electricity, a great deal of marketing was required.
The obvious thing to do is to make these programs opt-out rather than opt-in. (Steve Dubner of Freakonomics fame makes the case for opt-out systems here.) It's a straightforward issue of public safety. If customers want to pay less in order to pollute more, they should at least have to tick a box and say so.
Do we need nuclear and coal plants for baseload power?
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JMG Posted 4:26 am
04 Aug 2008
The bottom line issue with green power rates is that the free riders get all the benefits of others' participation at no cost. If YOU sign up and voluntarily tax yourself to help bring green power into the grid, then I get the same benefit that you do, and you pay the freight.
What utility commissions have to offer to break green power participation out of the low single digits is a price guarantee for participants -- that is, customers who pay the premium for green power now should get, in the same proportion as they are buying green power (10%, 25%, 50%, 100% or what have you), price protection from increases felt by non-green customers.
Once you offer that set up -- which is easy to calculate, since green power has no fuel expense that is vulnerable to market shocks -- then you will see green rates attract a lot of interest -- so much so that you could start auctioning off participation (i.e., demand would outstrip supply, so you could raise the premium a bit using auctions to allocate participation, which would raise even more funds faster to help produce more green power supply).
The 5% Project
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Wolverine Posted 7:30 am
04 Aug 2008
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