Six steps to helping large customers satisfy their renewable energy appetite
In response to requests from their largest customers, a growing number of utilities across the country have introduced voluntary renewable energy offerings. These programs, often called renewable energy tariffs or green tariffs, reflect a fundamental shift in the relationship customers want with their electricity providers. Instead of simply expecting utilities to provide reliable service at the lowest possible cost, companies now want to partner with their utilities to ensure that the source of this low-cost, reliable power also aligns with their organizational needs. For the growing number of companies that have set renewable energy or sustainability goals, this means increased access to renewables and other forms of advanced energy.
While the number of renewable energy tariffs has accelerated in recent years, with 23 programs now approved or pending approval in 17 states, they have had mixed success in meeting customer needs. Some programs — such as Puget Sound Energy’s Green Direct and Georgia Power’s Commercial & Industrial Renewable Energy Development Initiative — have enjoyed broad support and attracted participation from a diverse cross-section of customers. Other programs have gone untouched or have been used by only one or two customers, despite interest in renewable energy among other customers in the same territory.
Successful renewable energy tariffs grow out of a collaborative relationship between utilities and their customers. For utilities that want to work with and meet the needs of the “new” C&I customer, there are lessons to be learned from the most successful existing programs, as well as from the less successful programs, and even from those that could be considered complete failures.
A recent guide from the Advanced Energy Buyers Group shows how to harness the lessons of existing and past programs into successful new programs. The report, Renewable Energy Offerings that Work for Companies: A Practical Guide to Meeting Corporate Renewable Energy Demand in Vertically Integrated Markets, outlines six steps utilities can take to develop workable renewable energy options:
1.Seek advice and input from customers, industry, and other states. The good news for a utility just starting out is that there is plenty of experience and knowledge to draw from. Involving customers early in the process is essential, and the insights of regulators and utilities in other states, as well as industry experts, should also not be discounted.
2.Determine which approaches align best with state and utility circumstances. For better or worse, each state’s electricity market is different. Working with, and not against, a utility’s rate structures, resource mix, regulatory structure, etc., will result in an end product that works better for everyone.
3.Account for the varying needs of customers, including nonparticipants. Seeking initial advice from a few leading customers with experience across other states (through step one) is not enough; utilities must solicit input from across their customer base throughout the program design process to ensure the needs of different customers are being met….