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Greenwashing Electricity

     We assumed all along that deregulation was another name for "help the rich enrich themselves" ... and of course, we were right. In California, where the abuses started first, the clarion call of "guaranteed 10% rate reductions" was enough to obscure the fact that actual energy bills would be going up sharply due to inefficiency and the bail-out of selfish and stupid energy company "investments".
     We urge you to look carefully at the article below, reprinted from Utne Reader, visit the Green Power forum, and follow the links to honest and thought-provoking opinions from Ralph Nader and many others. If you live in California, there appears to be one way to vote with your dollars: Cleen 'n Green Power -- too bad they had to go cutesy on us with the name.

Solarnet sponsors a site where experts explain why California's Energy Crisis is really corporate welfare and a cynical attempt to pollute at public expense.

The Green Power Hustle:
"Clean" Energy's Dirty Little Secret

By Jon Entine (copyright October 1998)

     Early last summer, a torpid air mass settled like a blanket over the nation, touching off fierce thunderstorms and knocking out some transmission stations. It sparked an unprecedented power surge and sent the price of electricity on the newly-deregulated wholesale market from $30 a megawatt hour to as much as $7,000. Power marketers, including a number of so-called green power providers, scrambled for electrons wherever they could get them - primarily from nuclear and coal generators.
     This jolt of free market reality has scrambled the conventional wisdom of deregulation's most fervent backers -- a coalition of odd political bedfellows including rightwing Republicans such as Tom Bliley of Virginia and environmental lobbyists such as the Environmental Defense Fund (EDF), the Natural Resources Defense Council (NRDC), and the Conservation Law Foundation. They contend that deregulation of the $230 billion electricity market would bring lower prices and cleaner power from windmills, solar panels and dams. Renewable energy, which does not include large hydro projects, currently accounts for a paltry 2 percent of US electricity.
     In March, California became the first state to open its market, exposing the best and worst of what deregulation offers. Everyone still gets electricity delivered over local lines. But the rest of the process -- energy generation, marketing, and billing -- is up for grabs.
     The EDF and NRDC backed the California plan in exchange for $2 billion in new investments for energy efficiency, renewable energy, and low-income energy services. But the deal came with a pound of flesh. Established utilities get to charge customers expenses already accumulated for their "stranded" costs -- some $28 billion invested in failed nuclear plants or outdated fossil fuel facilities. The utilities say that's only fair since much of the outlays were mandated by the state. Yes, customers get a 10 percent rate cut, but the stranded cost payments reflected in their bill more than offset any savings.
     Not surprisingly, marketers are scrambling for a piece of the huge deregulation pie. One company proposes to sell Christian-to-Christian. Another had an pyramid scheme before being shut down. Green marketers - there are several in California-sell premium-priced electricity by promising renewable energy.
     "This is an opportunity to cast that vote [for clean energy] without any lifestyle change," boasted Kevin Hartley, vice-president of Green Mountain Energy Resources (GMER), to Reuters and the Pittsburgh Post-Gazette. "It can be done from your couch. Reduction of eco-guilt. That's really what we're selling." (GMER refused to be interviewed or supply background for this article.)
     Green Mountain charges a whopping 19 percent premium for its "greenest" offering in California while ballyhooing its plan to build new wind turbines -- but only if enough people signed up. They didn't. Most consumers are now being shuttled to a less "green" option which is mostly repackaged existing renewable resources and system electricity but no new wind or solar power.
     "Just to repackage what's already being generated does not pass a credible environmental test," says Bill Magavern of Public Citizen's Critical Mass Energy Project. "They shouldn't be calling it 'green' because it's not. They're saying 'we're selling the natural gas electrons.' But there are no tags on electrons."
     What eco-conscious consumers are buying will not displace dirtier plants. And for the most part, for every slice of high-priced "green" electricity, an identically "browner" slice goes to the rest of a region's customers who buy on price. That's ominous news for the environment. The Department of Energy predicts that deregulation will result in a flood of cheap coal and a 34 percent increase in carbon dioxide emissions by the year 2020. Deregulation could well result in a double whammy - less renewable energy and a sharp increase in global warming.
     Controversy has dogged other deregulation pilot projects. Green Mountain, majority owned by the Wyly family, known for its support of rightwing politicians and causes, entices customers with Kenny Loggins' CD's. Others offer bird feeders and tree saplings. In pilot projects in New England, Working Assets, known for its long distance telephone and credit card services, gave away Ben & Jerry's ice cream while touting its commitment to 100 percent renewable energy" and "non-polluting power from...solar or wind generators."
     It later admitted that it offered no wind, no solar, and almost no renewable energy. It sold a mix of natural gas and system energy, including nuclear, large-scale hydro, and coal, purchased from New England Energy Systems. Green Mountain pitched its green mix but drew heavily on massive water dam projects, including Hydro-Quebec, which environmental groups have sharply criticized for destroying thousands of acres of Native American lands.
     "They were basically reselling contracts that have been designated for hydroelectric facilities," writes MIT economist Paul Joskow about the New England pilots. "That has no short-run effect whatsoever on the dispatch of generation in the area and no positive effect on the environment in the short run."
     Working Assets, which has since struck up a marketing partnership in California with its former arch-enemy, GMER, later explained that the New England pilots were hastily conceived. "Time constraints limited our ability to incorporate more renewable sources and work more closely with environmental groups in optimizing our strategy," wrote Laura Scher, CEP of Working Assets, after she was criticized by energy activists. "We have learned a great deal from the experience and look forward to improving in all aspects."
     The mounting hidden costs of deregulation have led to another unlikely alliance, this time in opposition to the stranded cost bailout. Ralph Nader's Public Citizen and libertarian free-marketers such as Citizens for a Sound Economy have banded together to force a November vote in California to revamp the entire deal.
     "It's the people saying they don't want to bail the private utilities out for their multibillion-dollar mistakes, fumes consumer activist Harvey Rosenfield who has spearheaded the campaign. "If we're going to have deregulation, we're going to have deregulation for everybody."
     Both the NRDC and EDF oppose the citizen initiatives. They are gambling that there are hordes of consumers willing to pay premium prices for renewable energy. Their longshot hope is that power generators, sometime in the distant future, will conclude that it might be profitable to invest in developing new renewable energy generation. So far, it's been a bad bet. Less than 10,000 customers - out of 11 million - have signed up for green options in the first few months in California.
     The real winners in all this are the new middlemen, power marketers, preaching the easy way out of our environmental crisis. "Thanks to electric utility deregulation," reads a Green Mountain flyer, "you don't have to sign petitions, march in rallies or call Congress to help make our planet cleaner and healthier. About the easiest thing you can do is change your electric company."
     Hear that couch potatoes? No need to hold utilities accountable for wasteful investments and years of environmental degradation. Just lay back, crank the air conditioner, and let the future take care of itself.

Utne Reader, November 1998, FINAL, p. 16

Jon Entine is a freelance journalist who specializes in business ethics, sports and race. He won a National Press Club award in 1995 for "Shattered Image: Is The Body Shop Too Good to Be True?", published in Business Ethics magazine. Entine can be reached by email at runjonrun@earthlink.net.

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