There seem to be at least three schools of thought on what "renewable" energy is



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75% ARE WILLING TO PAY A PREMIUM FOR WIND POWER
Gary Gleason of Communique, Renee de Alba of Insight Research, Ron Fish, Public Service Co. of Colorado, Marketing News, September 23, 1996; Pg. 37, TITLE: Will consumers pay for cleaner energy? // VT98-acs

For the residential customers, it was found that at a $ 2.50 premium per 100 kilowatt hours, 75% of the respondents said they would purchase wind electricity. Commercial customers expressed interest in the product as a PR tool. Respondents indicated a strong preference for constructing the wind facility in Colorado, in stark contrast to attitudes often expressed about traditional power plants.


66% OF CONSUMERS WILL PAY MORE FOR RENEWABLE ENERGY ELECTRICITY
Reuters Financial Service, April 22, 1997, TITLE: US REPUBLICAN RELEASES SURVEY BACKING CLEAN POWER // VT98-acs

Two-thirds of consumers would be willing to pay higher prices for electricity produced from clean fuels, according to a survey released Tuesday by House Commerce Committee chairman Thomas Bliley.

The Virginia Republican is pushing legislation that would require states to open local power markets to competition. In the survey, 66 percent of the 1,012 adults questioned said they would be willing to pay a few dollars more on their monthly electric bills to receive power produced from "non-polluting, environmentally-friendly technology."

Thirty-one percent of the respondents said they would not, and three percent said they did not know.


IN MAINE, 72% OF CUSTOMERS WILL PAY 10% MORE FOR RENEWABLE ENERGY ELECTRICITY
Pamela W. Person, vice chairman of the Coalition for Sensible Energy, BANGOR DAILY NEWS (BANGOR, MAINE), April 18, 1997, TITLE: The power to demand more renewable energy What Maine citizens really want // VT98-acs

Maine's Public Utilities Commission took a survey in the fall of 1996 of residential and small business ratepayers. Maine citizens and small business both strongly supported clean energy (72 percent of residential and 62 percent of small businesses were willing to pay up to 10 percent more) and programs to improve energy efficiency (more than 62 percent of both groups supported these programs).


GREEN PRICING

EXAMPLES AND STUDIES SHOW CONSUMERS ENTHUSIASTICALLY EMBRACE GREEN PRICING [P.2]


72% OF TEXANS SAY INVEST IN RENEWABLE ENERGY EVEN IF IT COSTS MORE TODAY
PR Newswire, April 17, 1997, TITLE: Texans Want Deregulation to Reduce Electric Pollution and Increase Use of Renewable Energy, According to New Poll // VT98-acs

According to poll results, Texans are also willing to invest money into energy resources for the future, including wind power and solar energy. Texans were asked if they supported having the State set goals for the use of non-polluting energy such as wind and solar. Approximately 78% said yes, and 62% said that Texans should invest in generating resources for the future even if it cost more today.


CAMBRIDGE REPORTS STUDY SHOWED MAJORITY WILL PAY MORE FOR CLEANER ELECTRICITY
Dr. Barbara Farhar, National Renewable Energy Laboratory, November 12, 1996; Energy and the Environment: The Public View http://solstice.crest.org/renewables/repp/ //VT98-acs

In 1990 and again in 1994, Cambridge Reports asked: "How much would you personally be willing to spend each month to have your electricity come from sources that are less harmful to the environment?" (Table 8) Because the first response code was zero to $5, we cannot discern how many said "Nothing more." Nevertheless, 60% said in 1994 that they would be willing to pay more than $6/month more than they currently were paying for environmentally benign electricity. However, this percentage was down 16 points from 1990. Still, stated WTP for renewable electricity seems widespread.


COLORADO UTILITY SAYS 50,000 WILL SIGN UP FOR GREEN PRICING OF ELECTRICITY
Elizabeth Bryant, States News Service, The Denver Post, February 25, 1997 ; Pg. C-02, TITLE: 'Green' energy fans optimistic Will consumers pay more for electricity from renewable sources? // VT98-acs

But a market survey by Public Service, the state's largest utility, found 5 percent of its customers were willing to pay more for "green" electricity.

The findings triggered two pilot projects in wind and solar energy. Under the wind program, Public Service customers will pay a premium for chunks of kilowatt hours that will flow into the general power grid. The company expects 50,000 of its customers to sign up for wind energy, which will likely be available next winter.

GREEN PRICING

AFFIRMATIVE STUDIES SHOWING CONSUMERS WILL PARTICIPATE IN GREEN PRICING ARE SUPERIOR
NATIONAL STUDIES SHOW MANY PEOPLE WILL PAY MORE FOR CLEAN ELECTRICITY, LOCAL STUDIES SHOW VERY FEW WILL
Dr. Barbara Farhar, National Renewable Energy Laboratory, November 12, 1996; Energy and the Environment: The Public View http://solstice.crest.org/renewables/repp/ //VT98-acs

Local-area utility market research has shown various percentages of customers, ranging from 10% to 90%, who say they are willing to pay a premium for renewable electricity. Although some differences between national and local samples should be expected, the local-area results contrast sharply with consistent results from national probability samples, in which majorities of 56% to 80% usually express WTP for renewable electricity.


LOCAL WILLINGNESS TO PAY STUDIES ARE INFERIOR TO NATIONAL STUDIES
Dr. Barbara Farhar, National Renewable Energy Laboratory, November 12, 1996; Energy and the Environment: The Public View http://solstice.crest.org/renewables/repp/ //VT98-acs

At first glance, utility market research results may be troubling to renewable energy advocates. However, a closer look at utility market research on WTP reveals some problems in assessing the results:

(1) Because such data are considered proprietary, the questions used and the actual range of responses are rarely published. Instead, interpretations are published. The scientific quality of the research and the interpretations is impossible to assess because the publications describing the findings do not undergo rigorous peer review. In addition, the data are not accumulating into a shared body of knowledge.

(2) Sometimes the interpretations published generalize inappropriately to populations of electricity customers. For example, market researchers occasionally have generalized from percentages of focus-group participants expressing an opinion to the service-area population.

(3) Often, sampling procedures are not described; therefore, no information exists on sampling criteria and sampling frames used. The generalizability of the findings cannot be assessed.
FARHAR EVIDENCE USES 700 DIFFERENT POLLS OVER 23 YEARS
Dr. Barbara Farhar, National Renewable Energy Laboratory, November 12, 1996; Energy and the Environment: The Public View http://solstice.crest.org/renewables/repp/ //VT98-acs

This paper synthesizes data from more that 700 polls between 1973 and 1996 that indicate when questions comparing preferences among energy alternatives were asked.


LOCAL STUDY QUESTIONS PHRASING ON WILLINGNESS TO PAY IS FAULTY
Dr. Barbara Farhar, National Renewable Energy Laboratory, November 12, 1996; Energy and the Environment: The Public View http://solstice.crest.org/renewables/repp/ //VT98-acs

(6) Question phrasing is often a problem. For example, asking respondents, "Are you willing to pay more for electricity generated from renewable sources such as solar and wind power?" is different from asking them, "Will you pay $5/month more on your utility bill each month for one year so that XYZ utility can generate electricity from a small wind farm located 5 miles east of [city name]?"


INDIVIDUAL UTILITY WILLINGNESS TO PAY STUDIES ARE INFERIOR TO NATIONAL STUDIES
Dr. Barbara Farhar, National Renewable Energy Laboratory, November 12, 1996; Energy and the Environment: The Public View http://solstice.crest.org/renewables/repp/ //VT98-acs

Several reasons may explain the difference between expressed WTP in utility market research and actual participation at the initial offering of a green-pricing program. Some hypotheses are that utilities may not (1) define an environmental or regulatory reason for the program or product presented; (2) state how the product relates to a problem or need customers care about; (3) define specifically a financial amount requested and how it would be used; (4) define the length of the customer's commitment; or (5) offer incentives for participation (such as fixed electric rates).


IT IS EASY TO DESIGN GREEN PRICING PROGRAMS SO THAT CUSTOMERS WILL GET INVOLVED
Dr. Barbara Farhar, National Renewable Energy Laboratory, November 12, 1996; Energy and the Environment: The Public View http://solstice.crest.org/renewables/repp/ //VT98-acs

Customers are more likely to participate the more they perceive green-pricing programs as being (1) effective in actually producing clean electricity; (2) advantageous through paying relatively small amounts for value-added, avoiding resource depletion, planning for the future, or receiving a return (as in net metering); (3) reducing individual risk by keeping utility rates stable for long periods and customer ability to cancel, renew, or transfer participation; and (4) easy to understand.

GREEN PRICING

DEREGULATION AND THE GRANTING OF GREEN PRICING POWERS TO STATES MEAN NOW IS A GOOD TIME TO TRY GREEN PRICING


DEREGULATION IS COMING, AND IT IS THE RIGHT SETTING WITHIN WHICH TO CREATE INCREASED USE OF RENEWABLE ENERGY
The Energy Report, February 10, 1997, TITLE: Renewable Energy Sustainable energy group urges Clinton to back renewables portfolio in bill // VT98-acs

This year's deregulation push may be the administration's "only major legislative opportunity during its second term to make a transition to sustainable energy and shape the nation's energy policy for decades to come," the coalition insisted.

A strong bill "could go a long way in shifting the nation's energy policy away from nuclear power, coal and oil, to instead favor improved energy efficiency and renewable energy, " the group argued.
STATES CAN MANDATE THAT UTILITIES USE CERTAIN LEVELS OF RENEWABLE ENERGY
ALAN MILLER and ADAM SERCHUK Renewable Energy Policy Project, JUNE 1996, TITLE: Renewable Energy In Competitive Electricity Markets, http://solstice.crest.org/renewables/repp/ //VT98-acs

State commissions would mandate acceptable levels of renewable energy. To meet their share of that obligation, electricity suppliers could build their own renewable energy facilities or buy "renewable form of environmental trading to reduce emissions of sulphur dioxide from coal-burning power plants (Bailey, 1995).


STATES NOW HAVE THE POWER TO ORDER UTILITIES TO USE RENEWABLE ENERGY
Utility Environment Report, February 14, 1997; Pg. 3, TITLE: FERC GIVES STATES RIGHT TO ORDER UTILITIES TO BUY RENEWABLE ENERGY // VT98-acs

A recent Federal Energy Regulatory Commission ruling gives states the right to order electric utilities under their jurisdiction to purchase specified amounts of renewable energy (Docket EL95-51-000).

However, the decision also indicates that to the extent a regulatory order requires a utility to buy alternate energy from qualified facilities at rates exceeding avoided costs -- or sets wholesale power rates for FERC jurisdictional utilities -- its actions are preempted by federal law.
FEDERAL RULINGS ESTABLISHED STATE POWER TO REQUIRE UTILITIES TO USE RENEWABLE ENERGY
Utility Environment Report, February 14, 1997; Pg. 3, TITLE: FERC GIVES STATES RIGHT TO ORDER UTILITIES TO BUY RENEWABLE ENERGY // VT98-acs

''FERC's decision is a victory for advocates of renewable power,'' said Alexander Ewing, staff attorney at the Environmental Law and Policy Center in Chicago and counsel for the Izaak Walton League. He noted that in effect, MidAmerican had asked FERC to declare that states cannot require utilities to purchase renewable power at a price above avoided cost. That would have effectively gutted the states' ability to impose a renewables portfolio standard or to require utilities to purchase specified amounts of energy, he said. ''Instead of doing what MidAmerican wanted, FERC went out of its way to affirm that states have the authority to require their utilities to purchase specified amounts of renewable power,'' Ewing said. ''And it is clear from FERC's opinion that avoided cost does not set a ceiling on the price utilities pay for this power.''


"GREEN MARKETING" SCHEMES TO SMALL INDIVIDUAL USERS IS THE BEST WAY TO PROMOTE RENEWABLE ENERGY
Power Markets Week, December 2, 1996; Pg. 8, TITLE: 'GREEN' MARKETERS PROPOSE INCENTIVES TO JUMP-START MARKET FOR RENEWABLES // VT98-acs

''Green'' marketers will be essential in building a strong consumer demand, particularly among residential and small business customers, who constitute the most promising markets for renewables, marketers told the California Energy Commission last week.

GREEN PRICING

GREEN PRICING REDUCES THE HARMS OF THE CURRENT ENERGY SYSTEM


GREEN PRICING MEETS MANY OTHER GOALS BESIDES ENVIRONMENTAL QUALITY
Edward Holt, Regulatory Assistance Project, 1997; TITLE: Disclosure And Certification: Truth And Labeling For Electric Power: Competition, Green Marketing and Green Power; http://solstice.crest.org/renewables/repp/ //VT98-acs

Because the promotion of renewable energy is called green power (or green pricing), many tend to think the only motivation for its purchase is improved environmental quality. This is undoubtedly important to many consumers, but others are motivated by a fascination with new technology for personal use (such as photovoltaics), reducing dependence on utility companies, making sure energy resources are available for future generations, protecting themselves against electricity price fluctuations, or reducing risk and vulnerability to supply interruptions. Renewable energy, rather than environmental improvement, seems to account for more of these motivations.


SMALL CHANGES THROUGH GREEN PRICING PLANS CAUSE HUGE REDUCTIONS IN GREENHOUSE GASES
James R. Udall, Sierra, January 11, 1997; Pg. 26; TITLE: Power to the people; are you willing to pay more for clean energy? // VT98-acs

"We're here to meet our customers' needs," says Chuck Fricke, Traverse City's utility director. "Some of them want cleaner power, not cheaper power." Since the wind doesn't blow all the time, participants must rely on coal and hydro plants for backup. Still, the benefits of substituting wind for coal are profound. For example, the average Traverse City family is reducing its emissions of carbon dioxide, the chief greenhouse gas, by 14,400 pounds a year -- the equivalent of taking a car off the road, or planting two acres of trees -- a bargain for $ 90 a year.


$5 A MONTH COMMITMENT TO GREEN PRICING OF WIND POWER SAVES AS MUCH CO2 AS 5,000 MILES OF DRIVING
Utility Environment Report, February 14, 1997; Pg. 11, TITLE: PUC APPROVES PS COLORADO GREEN PRICING PLAN // VT98-acs

Nielsen said customers who spend $ 5 more/month for wind power will be reducing greenhouse gases in the same volume as if they cut out 5,000 miles of driving.

GREEN PRICING-NEGATIVE

CONSUMERS WILL NOT PAY EXTRA FOR "GREEN PRICING" SCHEMES


LESS THAN 5% ARE ACTUALLY WILLING TO PAY MORE FOR RENEWABLE ENERGY SUPPLIES
Gary Gleason of Communique, Renee de Alba of Insight Research, Ron Fish, Public Service Co. of Colorado, Marketing News, September 23, 1996; Pg. 37, TITLE: Will consumers pay for cleaner energy? // VT98-acs

This set the groundwork for the next and critical phase of the study: a market simulation to determine actual purchasing behavior. For the simulation, four samples of 1,000 random customers, as well as all previously surveyed customers who expressed interest in the product, were sent mailings including product description, the four most successful advertising messages, and a product order form.

This survey effort was designed to allow for an accurate projection of actual market penetration. At this writing, results of the simulation are being completed. However, initial results suggest that less than 5 % of the residential market can be expected to actually pay a premium for renewable power.
FEWER THEN 10% OF CONSUMERS WILL SIGN UP TO PAY MORE FOR RENEWABLE ENERGY
International Solar Energy Intelligence Report, November 1, 1996, TITLE: Business & Technology--Green Pricing Programs: Poor Utility Outreach May Explain Gap Between Polls and Willingness to Pay // VT98-acs

Utility market surveys find that at the inception of green pricing programs, when customers pay more a month than usual for renewables, fewer than 10 percent of customers initially sign up. In some cases, these numbers are as low as 1 percent or 2 percent, Farhar said.[Barbara Farhar, senior scientist at the National renewable Energy Laboratory]


NUMBER OF CONSUMERS WILLING TO TO PAY $6/MONTH FOR RENEWABLE ENERGY IS FALLING
International Solar Energy Intelligence Report, November 1, 1996, TITLE: Business & Technology--Green Pricing Programs: Poor Utility Outreach May Explain Gap Between Polls and Willingness to Pay // VT98-acs

Cambridge Energy Research in 1990 and 1994 asked utility customers how much they would be willing to pay for renewable energy. Sixty percent in 1994 were willing to pay more than $6 per month extra for renewable energy. This percentage was down 16 points from the 1990 survey, Farhar said. [Barbara Farhar, senior scientist at the National renewable Energy Laboratory]


UTILITIES HAVE NOT OFFERED SERVICES ALONG WITH RENEWABLE ENERGY PRICING PLANS
International Solar Energy Intelligence Report, November 1, 1996, TITLE: Business & Technology--Green Pricing Programs: Poor Utility Outreach May Explain Gap Between Polls and Willingness to Pay // VT98-acs

Utilities have not offered the public adequate business services to help persuade customers to invest in renewable energy, Farhar said. The public wants renewables built into the energy scheme, she wrote.


CUSTOMERS WON'T SIGN UP FOR RENEWABLE ENERGY PRICING PLANS BECAUSE THEY DO NOT TRUST THE UTILITIES
International Solar Energy Intelligence Report, November 1, 1996, TITLE: Business & Technology--Green Pricing Programs: Poor Utility Outreach May Explain Gap Between Polls and Willingness to Pay // VT98-acs

Customers' level of trust in their utilities also may interfere with their willingness to pay for green pricing. Customers might respond better to programs offered by municipal utilities or even non-utility suppliers with a reputation for environmental stewardship, such as the Working Assets group, Farhar contended.[Barbara Farhar, senior scientist at the National renewable Energy Laboratory]

GREEN PRICING-NEGATIVE

PEOPLE MAY SAY THEY WILL PAY FOR GREEN PRICING, BUT WHEN IT COMES TO ACTUALLY MAKING A FINANCIAL COMMITMENT, THEY WON'T


CONSUMERS WILL NOT PAY MORE FOR WIND ENERGY -- THEY SAY SO WHEN ASKED HYPOTHETICALLY BUT THEY DON'T WHEN THEY ACTUALLY HAVE TO PAY
American News Service, THE ORLANDO SENTINEL, February 16, 1997; Pg. A17, TITLE: STRIKING A BLOW FOR WIND ENERGY // VT98-acs

Furthermore, some energy analysts aren't convinced the public is willing to pay more for wind energy, despite market research to the contrary. The argument: Consumers have been answering hypothetical questions rather than being asked to open their wallets.


CONSUMERS SAY THEY WILL BUY EXPENSIVE RENEWABLE ENERGY, BUT THAT ISN'T MATCHED BY ACTUAL BUYING BEHAVIOR
Gary Gleason of Communique, Renee de Alba of Insight Research, Ron Fish, Public Service Co. of Colorado, Marketing News, September 23, 1996; Pg. 37, TITLE: Will consumers pay for cleaner energy? // VT98-acs

In developing the research, the highest priority was to establish actual consumer buying behavior. Previous research had identified a pattern of wide support for environmentally friendly, renewable-energy products and programs. However, experience has shown dramatically lower success in actually marketing them.


BUSINESSES WILL USE "GREEN" MARKETING, BUT CONSUMERS WON'T PAY THE COST
Jim Buchta; Staff Writer, Star Tribune (Minneapolis, MN), November 16, 1996, Pg. 4H, TITLE: Would you pay more for 'green' house?; Many who favor Earth-friendly home are reluctant to back ideals with money // VT98-acs

Cameron Duncan, technical specialist and architect for the Energy Efficiency and Renewable Energy Clearinghouse at the U.S. Department of Energy.

"It'll start out being a big deal for business to promote their association with environmental issues," Duncan said. "Some consumers will spring for it and others will say they want it," he said, but few will actually be willing to pay.
PUBLIC WANTS TO SPEND ON THINGS FOR IMMEDIATE GRATIFICATION, NOT ON DISTANT BENEFITS OF RENEWABLE ENERGY
Leyla Boulton, Financial Times, November 11, 1996, Pg. 06, TITLE: A business praying for 'cultural revolution' // VT98-acs

Another obstacle to change is the general public's desire to spend money on things that offer immediate gratification rather than something that, according to recent market research, is seen as remote and irrelevant to people's lifestyles.

GREEN PRICING-NEGATIVE

GREEN PRICING SCHEMES ARE TOO SLOW AND DIFFICULT TO IMPLEMENT


GREEN UTILITY RATES WILL TAKE A LONG, LONG TIME TO GAIN PUBLIC ACCEPTANCE
International Solar Energy Intelligence Report, November 1, 1996, TITLE: Business & Technology--Green Pricing Programs: Poor Utility Outreach May Explain Gap Between Polls and Willingness to Pay // VT98-acs

Innovative products and programs almost never achieve high participation rates at their outset. Green markets may take longer to penetrate the electricity market than analysts first predicted, Farhar suggested. [Barbara Farhar, senior scientist at the National renewable Energy Laboratory]


GREEN PRICING FOR RENEWABLE ENERGY FACES SERIOUS TIME DELAYS
Edward Holt, Regulatory Assistance Project, 1997; TITLE: Disclosure And Certification: Truth And Labeling For Electric Power: Competition, Green Marketing and Green Power; http://solstice.crest.org/renewables/repp/ //VT98-acs

A second reason may be that the supply of new renewable capacity falls short of demand. Even if a buyer is willing to pay a higher price for new renewable energy, a supplier usually cannot deliver it immediately and delivering it in six months to two years will not capture market share. Suppliers can only provide what is available when they enter newly-opened markets.


GREEN MARKETING ISN'T THE SAME AS GREEN POWER
Edward Holt, Regulatory Assistance Project, 1997; TITLE: Disclosure And Certification: Truth And Labeling For Electric Power: Competition, Green Marketing and Green Power; http://solstice.crest.org/renewables/repp/ //VT98-acs

"Green marketing" is an attempt to characterize the supplier as environmentally friendly without referring to the energy resource used to produce electricity.

"Green power" is electricity which may be characterized as environmentally friendly by virtue of the energy resource used. Generally speaking, this resource is renewable energy.
GREEN PRICING FOR RENEWABLE ENERGY IS JUST A PUBLIC RELATIONS GESTURE
James R. Udall, Sierra, January 11, 1997; Pg. 26; TITLE: Power to the people; are you willing to pay more for clean energy? // VT98-acs

With green pricing in its infancy, existing programs have purchased just two megawatts of new capacity -- a tiny fraction of the nation's total. Skeptics wonder if it will ever amount to much.

"For some utilities, green pricing is just greenwashing, a public-relations gesture," says Randy Swisher, executive director of the American Wind Energy Association. "We support well-designed programs, but we don't think the free market or individual customers should bear the full burden of accelerating the commercialization of renewables. State and federal incentives are needed, too."

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