Are green power premiums rising throughout the U.S. and/or are energy companies discontinuing green power options?

Gürcan Gülen, CEE

Gürcan Gülen, Center for Energy Economics (CEE), Bureau of Economic Geology, University of Texas.   I don’t think so; at least not a trend that would persist once the economy starts recovering.  There are now 29 states (plus DC) with an RPS program.  A federal RPS is possible this year.  There is money for renewables in various federal programs in addition to extended PTC and ITC.  Recent increase in capital costs of wind should reverse along with declining input costs, unless there is a structural shift in cost structure.  Efforts to introduce alternatives such as solar with higher cost structures may induce premiums, depending on how they are incented.

Ed Holt, consultant

Ed Holt, Consultant. All the indicators I have seen suggest that green power premiums have been declining, not rising. Since 2000, the average price premium has dropped at an average annual rate of 9%. In 2000, the median premium was 2.5 cents/kWh, and in 2007 the median premium was 1.5 cents/kWh. I’m not aware of utilities discontinuing green power options. The options may change with market conditions, but giving customers a choice to buy more green power than their utility supplies to all customers is just basic customer satisfaction. Generally, more options = greater satisfaction.