Energy Minute: Green Tariffs as a Path for Sourcing Clean Energy

On this Energy Minute mini-sode, Steven Goldman explores the world of “green tariffs,” voluntary utility programs that enable eligible customers to buy the “bundled” energy and associated Renewable Energy Certificates (RECs) from renewable energy projects. These programs are typically offered by local electric utilities and approved by state public utility commissions (PUCs).

He explains the main types of green tariffs and how they are an important tool for companies seeking to procure clean energy, as they offer a number of benefits, including predictability, reduced upfront costs, and brokerless access to clean energy. We'll discover the benefits of participating in these programs, including access to clean energy without high upfront costs and the ability to reduce operational carbon emissions. Join us as we uncover some of the more innovative green tariff programs and how utilities are working towards meeting the needs of companies in their clean energy sourcing.

Key Takeaways:

1. Green tariffs are voluntary utility programs that enable eligible customers to buy green power - both the energy and the associated RECs - generated by renewable energy projects. They are more common in traditionally regulated electricity markets and are an avenue for companies to source clean energy without having to pursue a bilateral agreement with a power producer.

2. There are three main types of green tariffs: subscription programs, sleeved power purchase agreements (PPAs), and market-based rate programs.

3. Green tariffs offer several benefits, including predictability, reduced upfront costs, and brokerless access to clean energy. As of January 2023, there are 50 approved or pending green tariff programs offered by 40 utilities in 28 states.

References:

• CEBA’s Green Tariffs report (updated in Jan 2023): https://cebuyers.org/solutions/procure-clean-energy/green-tariffs/#:~:text=Green%20tariffs%20are%20voluntary%20utility,a%20customer's%20current%20electricity%20bill

• EPA primer on Green Tariffs: https://www.epa.gov/green-power-markets/utility-green-tariffs#:~:text=Utility%20green%20tariffs%20are%20optional,a%20special%20utility%20tariff%20rate

• S&P Global, “Utility green tariffs fuel growth in US corporate renewables market” : https://www.spglobal.com/marketintelligence/en/news-insights/research/utility-green-tariffs-fuel-growth-in-us-corporate-renewables-market