Some states have legislation or rules mandating that utilities offer “green pricing” options to retail customers (residential, commercial, industrial). In addition, a growing number of utilities are opting to offer programs in states without legislation. At present, 13 states have a mandatory green pricing program offered by utilities to their customers.
While each program is unique, green pricing programs allow customers to pay a premium on their electric bill to have some or all of their power provided by renewable sources, such as wind, solar, low-impact hydro, biomass, landfill gas, and geothermal. Utilities charge participating customers a prescribed cost per kWh of green energy purchased. Most utility green pricing premiums are in the range of 1¢ -2¢ per kWh. Generally, this cost covers any above-market costs of purchasing clean, renewable energy sources.
There are three common types of green pricing programs.
Some utilities also design green pricing programs in conjunction with existing state energy policies. For example, utilities can interact with a state that has a renewable portfolio standard (RPS) by simply creating additional demand for renewable electricity, or it can be an alternative to the RPS for certain utilities.
Last updated March 2017