For Immediate Release: October 7, 2008
Contact: Mike Shriberg, Ecology Center: 734-761-3186 x108
DTE’s GreenCurrents Declared “Greenwash”; Alternative Proposed
85% overhead costs, no renewable energy purchases leads customers to demand new option
Ann Arbor, MI: The 14,000 residential or business customers in Southeast Michigan who have signed up for DTE Energy’s GreenCurrents program are beginning to realize that the premium they are paying on monthly electric utility bills for environmentally friendly renewable energy buys no actual renewable energy. In fact, 85% of the program’s costs in its first year went to marketing and administration, promoting DTE’s green credentials through money that could have gone to actual green power purchases. To remedy these problems and provide a true green energy option, the Ecology Center and City of Ann Arbor are teaming up to change the way GreenCurrents operates through intervening in a case before the Michigan Public Service Commission.
“Detroit Edison’s GreenCurrents program is long on ‘GreenWash’ and short on delivering renewable energy,” said David Wright, the Ecology Center’s Clean Energy Program Director and a member of the City of Ann Arbor’s Energy Commission. “Detroit Edison does not purchase any renewable energy for GreenCurrents customers, the program is incredibly expensive, and it is structured so that it will always be expensive.”
As promoted by DTE Energy, Detroit Edison’s parent company, the GreenCurrents program provides the company’s 2.2 million residential and business electric customers in Southeast Michigan an opportunity – for a premium – to purchase “blocks of renewable energy” or an option to match 100 percent of their electricity consumption with “renewable resources.” Unfortunately, this is misleading because DTE does not actually purchase any renewable energy for its GreenCurrents customers. Instead, the company purchases renewable energy certificates (RECs).
RECs are tradable environmental commodities which represent proof that electricity was generated from an eligible renewable energy resource. In the case of the GreenCurrents program, Edison buys RECs from two wind farms, one near Cadillac and one in the Thumb area, a biofuel (manure into electricity) farm near Lansing, and a landfill generating station near Muskegon.
It is significant, says Wright, that not even one kilowatt-hour of electricity is purchased by Detroit Edison with the premiums paid by GreenCurrents customers. “By not directly purchasing any renewable energy, GreenCurrents customers pay the full price for Detroit Edison's existing fossil-fuel and nuclear generation resources and a premium to buy a REC,” says Wright.
Detroit Edison spent over 85% of its $1.1 million in program expenses in 2007 on marketing and administration; less than 15% went to purchase the RECs. However, GreenCurrents premiums totaled less than $250,000, leaving the utility over $900,000 in unrecoverable expenses for the year. Now, Detroit Edison is asking the Michigan Public Service Commission (MPSC) to increase electricity rates on all customers by $5 million to cover the 2007 shortfall, as well as future unrecoverable expenses.
“The Ecology Center and City of Ann Arbor proposal fixes all of these problems with GreenCurrents,” stated Ecology Center’s Policy Director Mike Shriberg. “Our proposal is based on one of the nation’s most successful utility-sponsored voluntary green power programs, Austin Energy's GreenChoice program.”
Renewable energy does not have significant variable costs like those associated with conventional generating resources, and renewable energy can be purchased for a fixed price over a long term. GreenChoice and other successful voluntary programs pass this long-term fixed price feature to the participating customers. This long-term fixed price feature in some cases has made green power prices lower than base utility rates. This benefit can only be achieved if the utility makes a renewable energy purchase instead of a REC purchase.
To make GreenCurrents work for its customers, the Ecology Center and the City of Ann Arbor have intervened in the MPSC case, arguing that Detroit Edison should replace their energy charge and the GreenCurrents premium with a renewable energy charge. Under the proposal, Detroit Edison will use the renewable energy charge to enter into long-term fixed-price power purchase agreements with Michigan-based renewable energy developers.
These proposed changes to the GreenCurrents program will result in Detroit Edison actually purchasing renewable energy and providing the economic benefit of that purchase to participating customers. “With the utility purchasing energy, there will be no need for $5 million dollars to market and administer a misleading program,” says Wright. “And customers get the benefit of not only clean energy but also fixed prices over the long-term, thus hedging against future fossil fuel price increases and potentially lowering overall electricity costs.”
The Ecology Center has launched an action page for customers to express their opposition to the current GreenCurrents program and ask the MPSC to institute the proposed changes. In addition, renewable energy advocates and supporters of GreenCurrents reform are urged to attend an MPSC consumer forum at Ann Arbor’s Forsythe Middle School on Monday, October 13 at 6pm or one of the other forums occurring throughout the state.
The Ecology Center is a Michigan-based nonprofit environmental organization that works at the local, state, and national levels for clean production, healthy communities, environmental justice, and a sustainable future.