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Utility Green Pricing Programs: Design, Implementation, and Consumer Response Utility Green Pricing Programs:
Design, Implementation, and
Consumer Response

February 2004 NREL/TP-620-35618
Lori Bird, Blair Swezey, and Jørn Aabakken

National Renewable Energy Laboratory
1617 Cole Boulevard
Golden, Colorado 80401-3393
NREL is a U.S. Department of Energy Laboratory
Operated by Midwest Research Institute
Battelle
Contract No. DE-AC36-99-GO10337 National Renewable Energy Laboratory
1617 Cole Boulevard
Golden, Colorado 80401-3393
NREL is a U.S. Department of Energy Laboratory
Operated by Midwest Research Institute
Battelle
Contract No. DE-AC36-99-GO10337
February 2004 NREL/TP-620-35618
Utility Green Pricing Programs:
Design, Implementation, and
Consumer Response
Lori Bird, Blair Swezey, and Jørn Aabakken

Prepared under Task No. AS73.8004
NOTICE

This report was prepared as an account of work sponsored by an agency of the United States
government. Neither the United States government nor any agency thereof, nor any of their employees,
makes any warranty, express or implied, or assumes any legal liability or responsibility for the accuracy,
completeness, or usefulness of any information, apparatus, product, or process disclosed, or represents
that its use would not infringe privately owned rights. Reference herein to any specific commercial
product, process, or service by trade name, trademark, manufacturer, or otherwise does not necessarily
constitute or imply its endorsement, recommendation, or favoring by the United States government or any
agency thereof. The views and opinions of authors expressed herein do not necessarily state or reflect
those of the United States government or any agency thereof.


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iii
Acknowledgments

This work was funded by the U.S. Department of Energys (U.S. DOE) Office of Energy
Efficiency and Renewable Energy (EERE). The authors thank Ryan Wiser of Lawrence Berkeley
National Laboratory, Laura Vimmerstedt of the National Renewable Energy Laboratory (NREL),
Ed Holt of Ed Holt and Associates, Adam Capage of Platts, and Dan Lieberman of the Center for
Resource Solutions for their thoughtful review of the document; and Michelle Kubik of NREL
for her editorial support. The authors also acknowledge the support of the EERE technology
programs and of David McAndrew, EERE program manager. Finally, the authors thank the
many utility green pricing program managers who have consistently provided the data presented
in this report.
iv
Table of Contents

Executive Summary ........................................................................................................................1
Introduction......................................................................................................................................3
Data Collection and Methodology ...................................................................................................4
Customer Participation.....................................................................................................................4
Number
of
Customers .............................................................................................................4
Participation
Rates ..................................................................................................................5

Retention of Customers...........................................................................................................7
Renewable Energy Sales and Supplies ............................................................................................7

Green Power Sales and Revenues...........................................................................................7

Ownership vs. Purchases of Supplies .....................................................................................7

New Renewable Capacity Installations ..................................................................................8
Product Type....................................................................................................................................9

Energy Blocks vs. Percentage of Use ...................................................................................10
Pricing............................................................................................................................................10
Price
Premiums .....................................................................................................................10

Protection from Fuel Costs and Environmental Charges......................................................12
Marketing.......................................................................................................................................12
Marketing
Costs....................................................................................................................12

Cost Effectiveness of Marketing Techniques .......................................................................14
Program Implementation ...............................................................................................................15
Enrollment Options...............................................................................................................15
Enrollment Term...................................................................................................................15

Program Evaluations and Market Research..........................................................................16
Customer
Value ....................................................................................................................16
Conclusions and Observations.......................................................................................................17
References......................................................................................................................................18
Appendix A....................................................................................................................................19
Appendix B ....................................................................................................................................22
Appendix C ....................................................................................................................................23
v
List of Tables

Table 1: Estimated Cumulative Number of Customers Participating in Utility Green Pricing
Programs ...........................................................................................................................5
Table 2: Customer Participation Rates in Utility Green Pricing Programs, 1999-2002 .................5
Table 3: Average Participation Rate by Age of Green Pricing Programs, 2002.............................6
Table 4: Green Pricing Participation Rates by Utility Type, 2002 .................................................6
Table 5: Annual Sales of Green Energy through Utility Green Pricing Programs .........................7
Table 6: Utility Procurement of Renewable Energy Supplies, 2002 ..............................................8
Table 7: New Renewables Capacity Supplying Green Pricing Programs, 2002 ............................9
Table 8: Price Premiums of Utility Green Power Products ..........................................................11
Table 9: Green Pricing Premiums by Utility Type, 2002 .............................................................12
Table 10: Customer Acquisition Costs and Marketing Budgets, 2002.........................................13
Table 11: Ranking the Cost-Effectiveness of Marketing Strategies.............................................14
Table 12: Methods of Enrolling in Gr