POWER PLAY GREEN COMPANIES SCRAMBLE FOR THE POWER OF PG&E written by Scott Martin photos by Astrid Reiken Demian, a disgruntled customer waiting in line at PG&E's Mission payment center in San Francisco, says that deregulation of the energy market is pathetic. "It makes me feel shitty and it makes you feel you have no control because the big power companies are running the game," he says. "It's all a big-money game and guess who loses—the average citizen. The average citizen gets the shaft." If waiting in line at PG&E to pay the monthly energy bill is just too much to take, or the prices seem too high, don't despair. The door to many energy options is about to open. No matter what, PG&E and California's utilities are still going to be making money hand over fist, they're just going to deplete public bonds to compensate for rate drops. The rates are going to be frozen until 2002 at 10 percent below an artificially high rate. However, out of the myriad of confusing money hustles and hocus-pocus changes in the power industry under deregulation, the ostensible benefit to the consumer is energy choices that can actually make an environmental difference. Californians have many choices for power service beginning January 1. Those concerned about the environment can put their money with the company that provides nonpolluting power called renewable power, something the rising industry has termed green power. For the first time the market is open to a bevy of competition from companies that supply green power. So far more than 100 companies have registered with the California Public Utilities Commission to join a fierce competition. The Center For Research Solutions in San Francisco is busy certifying companies' power products that qualify as green power. Different power options will make it easier for customers to spot the companies that meet a green-power standard. "It's not obvious what renewable energy is," Assistant Director Kirk Brown says, "It can really get overly technical for people as soon as you start explaining what it is, and this is a real power mechanism that says, "look, renewable energy is anything that's got this obvious logo on it, just look for the logo." This is the first certification process of its kind in the United States, he says. Brown points out that energy companies are crawling all over it and will surely advertise this. Green power or renewable power is defined by federal law as either geothermal, solar, wind, biomass or small hydro-dam power. They put out zero emissions and are considered the cleanest power sources. Green-power companies will be selling 50 percent renewable power as their standard. The other half is nonrenewable, which comes from a mix of nuclear power, natural gas, coal and large hydro or dams. Green-power providers consider the 50-50 mix a bare minimum when defining green power. Further, green-power providers say the 50 percent that is nonrenewable must contain power that is no worse than system power, which is basically a mix of nonrenewable sources. This provision, green-power providers say, would prevent a company from green washing, saying they will provide 50-50 green power, where the nonrenewable power portion might then be all nuclear or coal, some of the worst polluters. "Beware of green washing," Brown warns. He says there will be companies out there that aren't green, but try to cloak themselves in the green robe to sleaze money from the new market. Laura Scher, chief executive officer for Working Assets Green Power, Inc., located in San Francisco, says, "We will try to put together a portfolio of power that is at least 50 percent renewable and the remaining power would not include nuclear or coal sources." In surges of demand, Scher says, they will have to go to the Power Exchange, the large pool of the system power all companies can draw from, but will try to keep to the minimum amount necessary. Access to the Power Exchange and transmitting power through the Independent System Operator could make or break companies that will incur costs of meeting stringent standards. California Public Utilities Commission Legal Analyst Kale Williams says this will be a decisive factor in the success of some of the green companies initially entering the market. At the Electric Power Research Institute in Palo Alto, during a forum on deregulation, the costs of meeting the standards were addressed. Engineers there estimated it could cost $5million to $10 million to meet standards. There will be other big obstacles ahead for green-power companies that want to compete with PG&E, San Diego Gas and Electric Co. and Southern California Edison. Some charge the decision to publicly finance deregulation is unfair competition for the smaller start-up green-power companies. "The competitive-transition charge and the full bailout of all the mistakes made by the three utilities in the state is really completely anti-competitive and unnecessary and this cost should be borne by the shareholders and not by both rate payers and California consumers - that really is probably one of the largest pieces of corporate welfare ever enacted - $28 billion for one state alone. I think the share of California in the savings-and-loan bail out, which we as citizens all thought was the biggest outrage, was only $l50 million," Scher says. Further, critics charge, the existing rate freeze will hold rates at an unusually high rate for the next four years. The financial obstacles alone are enough to thwart small green-power companies. "It has made it impossible for someone who wants to enter the market," Scher says. Bay Area Air Quality Management District spokesperson, Teresa Lee, says, "Energy consumption in this country is going up, not down; we're using more oil in this country than we ever did. We're such an oil-dependent and consumer-dependent society it would have to be equally cheap, efficient and work. If it (renewable power) fit those criteria we might see a shift, but I don't see that happening but very slowly." However, two pilot programs reveal customers are already keen on green power despite greater costs. In New Hampshire green power was offered to customers and it was chosen by more than 20 percent. Massachusetts offered a similar program where nearly 30 percent of the customers there chose the green-power option. "That's just out of the blocks, that's before there's any big marketing effort," Brown says. Foresight Energy Company's Warren Byrne, a green-power retailer, estimates there will be a 20 to 30 percent changeover to renewable power in California. Scher says green-power costs can only come down as it becomes more popular and is produced in greater quantities, better and cheaper. Enron Energy Services is vying for a major piece of the action in California, where it confided in undisclosed plans to build the largest windmill-power site in the United States, which will be located in Southern California. Enron spokesman Gary Foster points out that Enron, unlike other companies, is going to bring on renewable power, expanding the supply of existing renewable power rather than just buying what little green power is available. "We will bring on new wind or solar or other renewables incrementally as the market grows and make that investment, which will differentiate us from other power marketers that are selling a green product, that are just out there buying existing green electrons and not displacing what you can consider dirty electrons," Foster says. He says with deregulation there will be a market because of the significant amount of the population willing to pay more in order to insure that its electricity comes from a renewable source. Foster estimates it will cost 5 to 10 percent more for renewable power. The 50-50 ratio of renewable power to nonrenewable power to be offered by green companies is a huge improvement over what California is currently using. California's power consists of the following: 31 percent natural gas, 22 percent coal, 23 percent hydro or dams, 14 percent nuclear power and a mere 10 percent renewable sources, according to the California Energy Commission. That boils down to 67 percent pollution-causing power. Current power sources do environmental damage. According to The Center for Resource Solutions, electric power plants produce 66 percent of all the sulfur-dioxide pollutants in the United States. Sulfur dioxide causes acid rain. Power plants also produce 29 percent of all the nitrogen dioxide which again spells acid rain and smog. They produce 21 percent of all the mercury pollutants found and 36 percent of all the carbon-dioxide emissions, which are the main cause of global warming. "I certainly could see environmental impacts," Lee says. Brown points out that consumers have the power to reduce energy pollutants if they just put their money behind their politics. "If people start choosing renewables just because they're going to vote with their dollars and that's what they want to buy, all of a sudden the result is going to be this massive benefit for the environment that will happen without any new government regulation," Brown says. "It's just going to be a simple point-of-purchase decision that a customer would make." Green-power critics say it will be hard, if not impossible, for consumers to pull away from the power sources currently in use because people tend to go for the bargain. Disgruntled PG&E customer Demian, who was still standing in line to pay his bill quipped, "I don't want to pay more for anything--everything is too expensive; food, gas, where does it stop?" PG&E Energy Services Marketing spokesperson Allan Schurr says they are listening to customers. "I think that there are premium (renewable) energy options that could so expensive as to be twice the current price," he says. "Now they may get no customers, so they may not be in business for very long. Price, is very important." Better stay in line Demian. |ISSUE #1|FEATURES|A&E|INVESTIGATIVE|GREEN WATCH| |NAKED TRUTH|IN MOTION|HEALTH|LIFESTYLES|FYI|INDEX|