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Why green-power premiums may fade

Pricier options may become obsolete if government requires utilities to bring more renewables on line.

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For the past decade, power customers eager to wean the United States off fossil fuels could do something about it: Pay a few extra dollars to bring energy from wind, cow dung, and other renewable sources to the grid.

Now these pioneers are at risk of getting swallowed up by a stampede of government green-energy programs. At least 29 states have mandated standards requiring utilities to bring more renewable energy on line. Congress is considering federal standards, too. So utilities are wondering if they should keep marketing voluntary programs or if there are better ways to harness the enthusiasm of their cutting-edge customers and, in turn, boost mainstream acceptance of green energy.

"These programs are likely to be reexamined," says Mark Crisson, CEO of the American Public Power Association, an industry group for more than 2,000 publicly owned utilities. "The whole idea here was to take a voluntary approach to promoting the idea of renewables and to raise customer awareness. Once the state and other jurisdictions step in with mandates ... it [raises] the question: Why do you need a voluntary program?"

Green-power programs were never very big. More than 600,000 American customers choose to pay an extra 1.9 cents per kilowatt hour, on average, to fund the green option from approximately 850 utilities, according to the National Renewable Energy Laboratory (NREL) in Golden, Colo. On average, 2 percent of a utility's customers opt for green power when given a choice.


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