Guide to Purchasing Green Power:

Renewable Electricity, Tradable Renewable Certificates and On-Site
Renewable Generation

+-----------------+----------------+-----------------+-----------------+
| **U.S. DOE**    | **U.S. EPA**   | **World         | **Center for    |
|                 |                | Resources       | Resource        |
| *Federal Energy | *Green Power   | Institute**     | Solutions**     |
| Management      | Partnership*   |                 |                 |
| Program*        |                | *Green Power    | *Green-e        |
|                 |                | Market          | Program*        |
|                 |                | Development     |                 |
|                 |                | Group*          |                 |
+-----------------+----------------+-----------------+-----------------+

***Draft for Comments -- Do Not Cite***

Rev 2

*September, 2003*

[Reviewers - Items that will be addressed in next draft:]{.mark}

[1) add Green-e appendix from CRS]{.mark}

[2) executive summary]{.mark}

[3) case studies (hopefully each sponsoring organization can contribute
two)]{.mark}

# Table of Contents

Table of Contents [2](#table-of-contents)

PREFACE [4](#preface)

Executive Summary [6](#executive-summary)

1.0 Introduction [7](#introduction)

2.0 Defining Green Power: Renewable Electricity, Tradable Renewable
Certificates, and On-Site Renewable Generation
[9](#defining-green-power-renewable-electricity-tradable-renewable-certificates-and-on-site-renewable-generation)

3.0 Benefits and Costs of Green Power
[10](#benefits-and-costs-of-green-power)

3.1 Benefits of Green Power [10](#benefits-of-green-power)

3.2 Costs of Green Power [12](#costs-of-green-power)

4.0 Options for Purchasing Green Power
[14](#options-for-purchasing-green-power)

4.1 Renewable Electricity Products [14](#renewable-electricity-products)

4.2 Tradable Renewable Certificates
[15](#tradable-renewable-certificates)

4.3 On-site Renewable Generation [16](#__RefHeading___Toc460653588)

5.0 Preliminary Steps to Purchasing Green Power
[19](#preliminary-steps-to-purchasing-green-power)

5.1 Assemble a Multifunction Team [21](#assemble-a-multifunction-team)

5.2 Analyze Your Energy Needs [21](#analyze-your-energy-needs)

5.3 Identify Green Power Options [22](#identify-green-power-options)

6.0 Steps to Procuring Renewable Electricity and Tradable Renewable
Certificates
[24](#steps-to-procuring-renewable-electricity-and-tradable-renewable-certificates)

6.1 Develop Selection Criteria [24](#develop-selection-criteria)

6.2 Collect Product Information [26](#collect-product-information)

6.3 Develop a Procurement Plan [27](#develop-a-procurement-plan)

7.0 Steps to Developing an On-site Renewable Generation Project
[32](#steps-to-developing-an-on-site-renewable-generation-project)

7.1 Screen the Technologies [32](#screen-the-technologies)

7.2 Acquire Resources and Assistance
[33](#acquire-resources-and-assistance)

7.3 Develop a Project Plan [33](#develop-a-project-plan)

7.4 Address Potential Barriers [35](#address-potential-barriers)

7.5 Install and Operate Your On-Site Renewable Generation System
[35](#install-and-operate-your-on-site-renewable-generation-system)

8.0 Capturing the Benefits of the Purchase
[37](#capturing-the-benefits-of-the-purchase)

8.1 Quantify the Environmental Benefits
[37](#quantify-the-environmental-benefits)

8.2 Internal Promotion [38](#internal-promotion)

8.3 External Promotion [38](#external-promotion)

9.0 Summary and Conclusion [40](#summary-and-conclusion)

Appendix A: Sponsoring Organizations
[41](#appendix-a-sponsoring-organizations)

U.S. Department of Energy [41](#u.s.-department-of-energy)

U.S. Environmental Protection Agency
[41](#u.s.-environmental-protection-agency)

World Resources Institute [41](#world-resources-institute)

Center for Resource Solutions [41](#center-for-resource-solutions)

Appendix B: Green Power Procurement and Information Resources for
Federal Agencies
[42](#appendix-b-green-power-procurement-and-information-resources-for-federal-agencies)

Federal Definitions of Renewable Energy
[44](#federal-definitions-of-renewable-energy)

Benefits and Costs of Green Power Purchases
[44](#federal-motivations-for-green-power-purchases)

Sources of and Limits to the Federal Authority to Purchase Green Power
[45](#sources-of-and-limits-to-the-federal-authority-to-purchase-green-power)

Executive Order 13123 [45](#__RefHeading___Toc460653617)

FAR Part 23 [46](#far-part-23)

Cost Minimization [46](#cost-minimization)

Best Value [46](#best-value)

Specification of Requirements [46](#specification-of-requirements)

Commercial Items [47](#commercial-items)

Federal Attempts to Purchase Renewable Energy
[48](#federal-experience-with-purchasing-green-power)

Procurement Approaches [48](#procurement-approaches)

Fully-Regulated Markets [48](#fully-regulated-markets)

Restructured/Competitive Markets [48](#restructuredcompetitive-markets)

Using GSA or DESC [48](#using-gsa-or-desc)

Agency Procurement [50](#agency-procurement)

Facilitated projects [52](#facilitated-projects)

Key Elements of a Successful Procurement Process
[52](#key-elements-of-a-successful-procurement-process)

Obtain management buy-in and expense approval [**Error! Bookmark not
defined.**](#__RefHeading___Toc460653631)

Obtain agency electricity consumption data
[53](#obtain-agency-electricity-consumption-data)

Bundling for Cost Control [53](#bundling-for-cost-control)

Capture the benefits of the purchase
[53](#capture-the-benefits-of-the-purchase)

Summary of Renewable Electricity Opportunities for the Federal
Government
[54](#summary-of-renewable-electricity-opportunities-for-the-federal-government)

Renewable Resources [51](#renewable-resource-assessment)

Funding Options [51](#funding-assistance)

Design Assistance and Training [51](#design-assistance-and-training)

Federal Resources for Green Power Information
[55](#federal-resources-for-green-power-information)

Federal Case Studies [56](#federal-case-studies)

Appendix C: EPA Green Power Partnership
[62](#appendix-c-epa-green-power-partnership)

What is the Green Power Partnership?
[62](#what-is-the-green-power-partnership)

Who can participate? [62](#who-can-participate)

What are the benefits of becoming a Green Power Partner?
[65](#what-are-the-benefits-of-becoming-a-green-power-partner)

How does EPA define green power? [66](#how-does-epa-define-green-power)

Must Partners purchase a certified green power product?
[66](#must-partners-purchase-a-certified-green-power-product)

Appendix D: Green Power Market Development Group
[68](#appendix-d-green-power-market-development-group)

Overview [68](#overview)

Group strategy [68](#group-strategy)

Group progress [69](#group-progress)

Building the business case for green power
[69](#building-the-business-case-for-green-power)

Resources for energy buyers (www.thegreenpowergroup.org)
[70](#resources-for-energy-buyers-www.thegreenpowergroup.org)

Additional information [71](#additional-information)

Appendix E: Center for Resource Solutions Green-e Certification Criteria
[73](#appendix-e-center-for-resource-solutions-green-e-certification-criteria)

Appendix F: Resources For Further Research
[74](#appendix-f-resources-for-further-research)

Introduction [74](#introduction-1)

Benefits of Green Power [74](#benefits-of-green-power-1)

Environmental Attributes [74](#environmental-attributes)

Tradable Renewable Certificates [74](#tradable-renewable-certificates-1)

Utility Green Pricing Programs [75](#utility-green-pricing-programs)

Green Power Product Lists [75](#green-power-product-lists)

On-Site Renewable Generation [75](#on-site-renewable-generation-1)

Greenhouse Gas Inventories and Registries
[78](#greenhouse-gas-inventories-and-registries)

Appendix G: Complications in Defining Green Power
[79](#appendix-g-complications-in-defining-green-power)

Glossary [80](#glossary)

# PREFACE

The Guide to Purchasing Green Power is intended for organizations that
have decided to buy green power and want help figuring out how to do it;
it is also intended for organizations that are still considering the
merits of a green power purchase. It has been developed to assist a
broad audience, including businesses, government agencies, universities,
and all types of organizations wanting to diversify their energy supply
and to reduce the environmental impact of their electricity use.

This document will develop over time, so we welcome your input. Please
tell us your success stories and share with us challenges you
encountered so that we can improve this guide in the future.

Because generating electricity from renewable resources is relatively
new and may be accomplished in a variety of ways, many institutions are
working to facilitate the development of green power markets. Several of
these organizations--listed below, and described in more detail in the
appendices to this document--have worked together to bring you this
purchasing guide.

The Department of Energy\'s *Federal Energy Management Program* (FEMP)
works to reduce the cost and environmental impact of the Federal
government by advancing energy efficiency and water conservation,
promoting the use of distributed and renewable energy, and improving
utility management decisions at Federal sites. FEMP provides guidance,
education, technical assistance, and outreach materials to Federal
agencies as part of their mission.

The EPA *Green Power Partnership* is a voluntary program designed to
reduce the environmental impact of electricity generation by promoting
green power. The Partnership is working to demonstrate the advantages of
renewable energy by providing objective and current information about
the green power market. Organizations become Partners by committing to
procure an amount of green power that is proportional to their annual
electricity use. In return, EPA provides technical assistance and public
recognition.

The *Green Power Market Development Group* is a collaboration of 12
leading corporations and the World Resources Institute dedicated to
building corporate markets for green power. Their goal is to develop
corporate markets for 1000 MW of new, cost competitive green power by
2010. WRI researchers work closely with corporate energy professionals
to build the business case for green power. They develop strategies to
reduce green power costs, provide independent information to potential
customers, and help companies recognize the value of green energy to
diversify energy portfolios.

The *Green-e* Renewable Energy Certification Program is administered by
the non-profit Center for Resource Solutions. Green-e provides an easy
way for consumers to quickly identify environmentally superior
electricity products in competitive markets, regulated markets, and
national markets for tradable renewable certificates (TRCs). Green-e
certifies green power products that meet the environmental and consumer
protection standards established by the Program. The Program also
requires electricity providers to disclose information about their
product to their customers in a standardized format and to conduct an
annual independent audit to verify resource supply and product claims.
The Center for Resource Solutions also administers the International
Tradable Renewable Certificate Program to foster the development of a
North American Certificate Tracking System as a means to strengthening
the market for green power.

Because this guide is intended to provide an introduction to green power
for new purchasers, it omits many of the details you may need to
implement your purchasing decisions. Once you have read this document to
gain a basic understanding of green power products, we encourage you to
continue your research by visiting the web sites of the sponsors
identified above, and following the leads suggested in the appendix
"Resources for Further Research."

The following individuals contributed to the preparation of this
guidebook: ...

**Table 1: Organizations sponsoring this guidebook**

  --------------- --------------- ----------------- ---------------- -----------------
  **Program**     **Lead          **Organizations   **Principle      **Renewable
                  institution**   participating**   types of         sources
                                                    support**        promoted**

  Federal Energy  U.S. DOE        Federal agencies  Information,     As defined in
  Management                                        recognition,     Executive Order
  Program                                           technical        13123
                                                    assistance       

  Green Power     U.S. EPA        U.S. businesses,  Information,     Green-e eligible
  Partnership                     governments,      recognition      renewable
                                  non-profits, and                   resources (see
                                  educational                        Appendix E);
                                  organizations                      on-site
                                                                     renewables

  Green Power     World Resources Large U.S.        Information,     Solar, wind,
  Market          Institute       industrial and    identify         biomass, landfill
  Development                     commercial energy suppliers and    gas, geothermal,
  Group                           users             green power      \"clean\" fuel
                                                    project          cells and
                                                    opportunities,   microturbines.
                                                    recognition      Includes
                                                                     non-electric
                                                                     uses.

  Green-e         Center for      Diverse           Certification    Solar, wind,
                  Resource        stakeholder       and verification biomass, landfill
                  Solutions       interests in      of green power   gas, geothermal,
                                  environmental,    products meeting and
                                  consumer, energy, consumer and     hydro-electric.
                                  and government    environmental    Standards vary by
                                  sectors           protection       region; see
                                                    criteria         Appendix E for
                                                                     details
  --------------- --------------- ----------------- ---------------- -----------------

# Executive Summary

This section will be a 2-3 page summary of the main points in the
guidebook.

## 1.0 Introduction

Electricity is fundamental to our society---it powers our homes,
businesses, and industries. Conventional methods of electricity
production, however, contribute to a number of major environmental
problems -- adversely impacting human health and the environment. These
environmental impacts from conventional power sources include air
emissions, water consumption, thermal pollution, solid waste, noise, and
adverse land-use impacts. These impacts in turn affect the environment
by changing the global climate, threatening endangered species and
biodiversity, causing human health risks such as cancer and respiratory
disease, destroying public land, and producing toxic waste. While these
impacts of conventional electricity production can be reduced somewhat
through better design and management (e.g., pollution controls), most
conventional energy sources cannot serve as the basis of a sustainable
energy system. In the long-run, issues such as greenhouse gas
production, land disturbance due to mining, and the generation of
nuclear waste probably cannot be addressed in a way that will sustain
the quality of our environment. It is against this backdrop that clean
energy sources---notably, power generated from renewable resources---are
seen as an essential part of a sustainable energy system.

In many parts of the country, deregulation has enabled consumers to
choose the provider of their electric power, and they can also choose to
buy power generated from renewable energy resources. In regulated
markets hundreds of utilities now offer their customers the opportunity
to make incremental investments in increased renewable generation
capacity through "Green Pricing" programs. Even in areas where consumers
cannot directly purchase electricity from renewable resources, Tradable
Renewable Certificates have been developed to allow consumers in every
state to encourage the production of green power.

While no form of electric power generation is completely benign,
electricity generated from renewable resources such as solar, wind,
geothermal, small and low-impact hydropower, or biomass is widely
regarded as environmentally preferable to electricity from conventional
energy sources such as coal, oil, nuclear, and natural gas. This
document focuses on electricity generated from renewable energy
resources, both delivered through the grid and generated at your
facility. While renewable energy can also be used to serve heating loads
or to supply transportation fuels, we do not address those applications
in this document.

By purchasing green power instead of conventional power, consumers can
reduce the environmental impact caused by their electricity use. The
potential for reducing the environmental impact of power generation is
tremendous, particularly for large consumers of electricity. A wide
range of organizations have purchased green power -- federal, state and
local governments, universities, businesses, and individual consumers.
As of the end of 2002, nearly 1000 MW of new renewable generating
capacity has been added to meet the demands of green-power products
described in this guide. This capacity is equivalent to the power output
of two large fossil-fuel power plants. Moreover, another power-plant
worth of renewable capacity was on the drawing boards at that time.
These renewable installations are creating real environmental benefits,
and these benefits are public, meaning they are shared by all of
society.

Green power should be considered as part of the strategic energy
management plan for your facilities to address your organization's
environmental, financial, and other goals. This energy management plan
should be approached as a "portfolio analysis" that considers options
such as power purchases, load management, on-site generation, energy
efficiency, as well as your facility's non-electric (thermal) energy
needs. As with any investment portfolio, the best mix of these options
will depend on your specific situation.

Many private and public organizations are already choosing to \"buy
green." Because of the environmental benefits associated with renewable
energy, purchasing green power is helping these organizations meet their
own environmental goals. In addition, there are social goals that green
power can also help organizations achieve. For example, purchasing green
power can help demonstrate civic leadership in local communities.

Purchasing green power is also an important business decision because it
can help realize significant economic benefits for your organization.
For instance, buying green power can help manage an organization's
exposure to rising or volatile electricity prices, allowing them to lock
in a price that is not subject to changing fuel prices. Purchasing green
power can also be used to manage the risk of future environmental
regulations, as part of a diversification strategy for greater
electricity reliability through on-site generation, and also as a way to
boost employee morale. Buying green power may also provide important
public relations value for your organization, and enhanced branding for
your company and its products or services. Finally, green power
purchasing can provide opportunity for environmental partnerships that
raise your credibility.

Because buying green power is still relatively uncommon in today's
energy markets, and these markets offer a wide range of choices, this
guidebook has been developed to facilitate green power purchasing. The
guide is intended for organizations that have decided to buy green
power, but want help in figuring out how to do it, as well as
organizations that are still considering the merits of a green power
purchase.

This Guide to Purchasing Green Power addresses the following commonly
asked questions:

-   [What is renewable energy and green power?](#_II._What_is)

-   What benefits will my green power purchase bring?

-   How do I make the business case for purchasing green power?

-   What about the cost of green power?

-   [What are my options for purchasing green power?](#_What_are_my)

-   [How do I choose a green power product?](#_How_do_I)

-   What are the steps to installing on-site renewable generation?

-   What procurement methods can I use to buy green power?

-   How can I maximize the publicity benefits to my company, my
    employees, and my customers?

## 2.0 Defining Green Power: Renewable Electricity, Tradable Renewable Certificates, and On-Site Renewable Generation

Renewable energy is derived from natural sources that replenish
themselves over short periods. Renewable resources include the sun,
wind, moving water, organic plant and waste material (biomass) and the
earth's heat. This renewable energy can be used to generate electricity
and for a variety of other applications. For example, landfill methane
gas can be fed into a gas pipeline and used for heating or cooking,
biomass might be used as boiler fuel to generate steam heat, and solar
energy might be used to heat water or for passive space heating. These
non-electric applications will not be addressed in this guide.

"Green power" refers to electricity products that include significant
proportions of electricity generated from energy resources that are both
renewable and environmentally preferable. "Renewable electricity" is
generated using renewable energy resources and delivered through the
utility grid. "Tradable Renewable Certificates" (TRCs) represent the
environmental attributes of power generated from renewable resources.
"On-site renewable generation" refers to electricity generated at your
facility using renewable energy resources.

Although renewable energy's environmental impacts are minimal, these
power sources still have some effect on the environment. For example,
biomass resources are converted to electricity through combustion, which
emits some air pollutants. Hydroelectric dams can flood surrounding land
and impede fish passage. Compared to conventional power, however,
renewable power generally avoids, or at least significantly reduces, the
adverse environmental impacts described earlier.

Given this variation in the environmental impact of renewable energy
sources, how does one determine which sources are environmentally
preferable? There is a remarkable degree of consensus that solar, wind
and geothermal are environmentally preferable, as long as siting and
permitting requirements are met. Because of different regional
sensitivities, however, some regional differences remain with respect to
the definition of acceptable biomass and hydro energy resources.
Appendix E provides more information about regional differences in
defining acceptable renewable resources.

The definition of environmentally preferable renewable energy takes on
added significance when it is a product specified in contracts and
eligible for government and utility incentives. Over the years, Federal
and state governments have defined renewable energy through executive
orders and legislation.

Now, the Green-e certification program, administered by the non-profit
Center for Resource Solutions (CRS), is considered a consensus
definition for environmentally preferable renewable resources. The
Green-e program certifies green power products in competitive markets,
as well as utility green pricing programs and TRCs. Further details
about Green-e certification are contained in Appendix E. Some state and
utility programs, as well as the Federal government, define eligible
renewable products differently than the Green-e program. These
differences are explained further in the Appendices to this guide.

## 3.0 Benefits and Costs of Green Power

### 3.1 Benefits of Green Power

The benefits of green power depend in part on your objectives and how
you implement your purchase. For many organizations, green power can
help meet both internal, as well as community, social, and environmental
objectives. Similarly, green power can help distinguish an organization
in the marketplace, which may enable it to realize its operational or
financial goals.

#### Benefits to an organization, employees, and customers

-   **Provide a hedge against risk due to:**

    -   **Electricity price instability**. Purchasing electricity
        generated by renewable energy resources can provide a financial
        hedge against unstable or rising fossil fuel prices. Wind,
        geothermal, hydro and solar energy are not subject to fuel cost
        variability. Biomass may have a fuel cost, but it is not
        affected by the rise and fall in the price of oil or natural
        gas. Electricity generated by renewable resources can offer a
        long-term fixed price, while electricity generated by fossil
        fuels usually contains a fuel price adjustment clause. Purchase
        of electricity can be thought of as an investment portfolio.
        Many investors are willing to accept a lower return in exchange
        for less risk. Renewable energy sources may sometimes cost more
        than non-renewable fuels, but they can reduce price risk over
        the longer term.

    -   **Fuel supply disruptions**. Renewable resources are typically
        located in or near the region they are used to serve and are not
        traded in markets, which reduce the risk of disruptions in fuel
        supplies resulting from transportation difficulties, cartel
        actions or international conflict.

    -   **Environmental regulation**. To address global climate change
        and regional air quality issues, regulations have periodically
        been proposed at the Federal and state levels that would
        effectively increase the price of electricity from
        more-polluting energy sources. Green power, on the other hand,
        would be largely exempt from these regulations, resulting in
        more stable prices over the long-run. Companies whose emissions
        are directly regulated can also use green power to reduce their
        regulatory risk. When a company assigns a value to an emission
        reduction target, then the cost of achieving that target through
        a green power purchase can calculated. If the cost of achieving
        the target through a green power purchase is less than the
        company's assigned value, then a business case can made that a
        green power purchase is a net savings to the company's "bottom
        line."

-   **Increase electric supply reliability**. Reliability of electric
    supply has become increasingly important in an era of computers and
    a data-intensive economy. Organizations that need highly reliable
    power supply may be interested in on-site power generation. In the
    event of an outage, an on-site energy supply can provide critical
    service. Some renewable energy options are intermittent, meaning
    they generate electricity only when the sun shines or the wind
    blows. Battery storage or other backup devices can help provide the
    security necessary to provide essential services during an outage.
    Although on-site generation may be more expensive relative to the
    cost of grid-supplied electricity, many companies recognize the high
    value of reliable power, and are willing to pay for it.

-   **Meet organizational environmental objectives**. Reducing an
    organizations' environmental impact--consistent with organizational
    values--is a primary motivation for buying green power. For example,
    buying green power can help meet greenhouse gas reduction targets,
    because green power helps reduce the air emissions and greenhouse
    gases associated with energy use. If an organization is interested
    in ISO-14001 (environmental performance) certification, reduced
    energy emissions are an important part of this certification
    process. Aggressive environmental goals for an organization can also
    lead to improved bottom-line performance. Private companies that
    perform well environmentally tend to have high-quality management,
    which leads to better stock performance.

-   **Demonstrate civic leadership**. Being among the first in a
    community to purchase green power is a demonstration of civic
    leadership. It makes a statement that an organization is
    progressive, leads by example, and is willing to act on its
    environmental or social values. The purchase of green power
    represents a clear demonstration of an organization\'s
    responsiveness to its customers (or citizens), the majority of whom,
    according to multiple surveys, favor renewable energy.

-   **Generate positive publicity**. Buying green power affords an
    opportunity for public recognition. Green power may provide public
    relations value that advertising and media relations can't buy. This
    may be particularly true for large corporations that are often in
    the public eye and which need to be responsive to the needs and
    concerns of environmentally conscious customers, shareholders,
    regulators, and other constituents. Being among the first in a
    community or in an industry to buy green power can convey a
    proactive image that can help distinguish an organization. Groups
    promoting green power, such as the Green Power Partnership and the
    Green Power Market Development Group, provide partner organizations
    assistance in reaching broad audiences to convey the benefits of
    green power purchases. On-site renewable resources are particularly
    effective at generating publicity because they provide a tangible
    "installation" that demonstrates an organization's environmental
    commitment in a way that is easy to communicate to the public.

-   **Improve employee morale**. Improving employee morale is another
    motivation, and a benefit, of purchasing clean energy.

-   **Reinforce messages behind products or services**. In some
    instances, using green power may help reinforce an organization's
    mission. For example, an organic food store or a company that sells
    camping gear may see unique ways to promote its products and
    services through the purchase of green power. Even if the
    environment is not directly related to an organization's core
    mission, it may find ways to differentiate itself through green
    power. For instance, a manufacturer of electric appliances could
    purchase tradable renewable certificates to be packaged with their
    appliances. These appliances could be marketed as "greener" by
    virtue of a lifetime supply of renewable certificates. Green power
    purchasers may also be able to work with their power supplier to
    arrange co-marketing opportunities. And purchasers of Green-e
    certified products can display the Green-e logo on their product
    packaging to indicate the share of renewable energy used in their
    production process.

#### Benefits to the environment and economy

-   **Avoid environmental damage**. Green power and renewable energy
    avoid most of the environmental impacts associated with traditional
    power generation. This can help reduce impacts on human health and
    improve the health of the environment (e.g., better air and water
    quality, increased wildlife stocks, etc.).

-   **Stimulate local economies**. Because renewable resources are
    typically local, jobs are created to install and operate renewable
    generation facilities. This effect is greater than for than
    conventional generation facilities, because renewable energy
    facilities tend to be more labor intensive per kWh generated.
    Renewable power facilities also increase the local tax base and
    provide income for farmers and rural communities.

-   **Stimulate long-term production cost reductions**. Because most
    renewable technologies have yet to be produced in high volumes, one
    can expect that their production costs will decrease significantly
    as their production volume increases.

-   **Transform markets for renewable energy technologies**. Significant
    purchases of green power could stimulate the overall renewable
    energy market, both for renewable energy hardware and power produced
    by renewable sources. Strong demand from high profile customers,
    such as government agencies and large corporations, will demonstrate
    that switching to green power is a national priority, will call
    attention to societal and customer benefits, reinforce products and
    services, and will help develop a thriving, competitive industry.
    These factors may influence others to follow suit with their own
    purchases of green power. In this way, the purchases by leading
    organizations can be leveraged, leading to the creation of
    additional public goods and further market transformation.

#### Benefits to our national security

-   **Increase fuel diversity**. Renewable energy increases our nation's
    fuel diversity, which reduces our dependence on imported fuels.

-   **Reduce infrastructure vulnerability**. The distributed nature of
    most renewable energy resources improves the robustness of our
    energy system by reducing our reliance on a vulnerable, centralized
    energy infrastructure. In the event of a power outage, either
    accidental or due to attack, distributed power resources improve our
    ability to respond and recover from the event.

### 3.2 Costs of Green Power

The benefits of green power listed above usually come with a cost
premium over standard power sources. The costs of green energy purchases
come in several forms, including price premiums above traditional power
and transactions costs stemming from contracting challenges. This
guidebook offers several strategies to minimize this cost premium at the
stage of developing a procurement plan.

-   **Price premiums.** Renewable energy is generally more expensive
    than conventional power sources (e.g., coal and gas-fired
    generation) because renewable energy technologies tend to be more
    capital-intensive than traditional technologies. These higher
    capital costs are largely due to the relative immaturity of
    renewable technologies, compared to the decades of market dominance
    and subsidies enjoyed by conventional energy sources. The capital
    cost of renewable energy is declining, however, as growing demand
    justifies expanded manufacturing facilities and reduces production
    costs.

> The actual price for green power depends on a number of factors,
> including the availability and strength of the resource, the price of
> alternative sources of electricity, the availability of subsidies to
> encourage green power (discussed in more detail later in this guide),
> and the quantity and terms of the contract. Generally, the price of
> green power will range from less than the standard power mix
> (especially in competitive markets and where state subsidies exist) to
> up to 1-4 cents more per kWh, although the premium varies by resource
> and region. For green power products with a fixed price, when the
> market price of conventional electricity runs high, purchasers may
> actually save money. On the other hand, when market prices drop, they
> would be paying a premium.

1.  **Contracting challenges.** Green power may also be more difficult
    for an organization to purchase than conventional power, causing
    indirect transaction costs in addition to any price premiums. While
    organizations that are new to purchasing green power may need to
    invest extra effort in the purchase, experience has shown that these
    costs are significantly reduced over time as electricity purchasers
    gain experience with green power.

2.  **Unrealistic expectations**. It is tempting to believe that a green
    power purchase can dramatically improve an organization's
    environmental image. One risk, however, is that external
    stakeholders will view the purchase as a token effort or "green
    washing." To address this risk, experience has shown that a green
    power purchase is only one element necessary for an effective
    environmental management program. Another strategy to improve the
    credibility of a purchase is to work with third party organizations,
    such as Green-e and the EPA Green Power Partnership, for independent
    auditing and endorsement of a green power purchase.

## 4.0 Options for Purchasing Green Power

Green power can be purchased in several different ways. The most basic
distinction depends on where the power generation equipment is located:
on-site at your facility or elsewhere on the power grid. For on-site
renewable generation, the renewable energy resources available at your
site (e.g., solar, wind, biomass) are the main factors that determine
project feasibility. For products involving delivery of electricity over
the power grid to your facility (i.e., "renewable electricity"), your
options will largely depend on the electricity market structure in the
state where the purchase is being made. Depending on the status of
utility restructuring in your state, you may be able to buy green power
either from your existing monopoly utility, or from a competitive power
supplier. Even if you have no green power marketers in your state or
your utility does not offer a green power option, you can buy tradable
renewable certificates. Table 2 compares some of the factors you might
consider in evaluating these different green power options.

Note that these product options are not mutually exclusive. You may want
to initially purchase a green power product involving less financial
commitment (such as an electricity product with a smaller fraction of
renewable content), then commit over time to larger purchases (of
renewable electricity or TRCs) or installation of on-site generation.

### 4.1 Renewable Electricity Products

Renewable electricity products--offered either by your utility or the
power marketer that provides your power--can be structured in several
different ways. The availability of each of these products will be
subject to your location and your electricity provider's portfolio of
offerings. Each product differs slightly in its details, but most
renewable electricity products can be divided into two types.

-   **Fixed Energy Quantity Block**: a block is a quantity of 100%
    renewable electricity, often 100 kWh, offered for a fixed monthly
    price. The price is often expressed as a price premium above the
    price of conventional power. Customers usually may sign up for as
    many blocks as they wish--the monthly cost of these products depends
    on how many blocks you decide to buy. This type of product is
    available in some competitive markets, but is more typical in
    utility green pricing programs.

-   **Percent of Monthly Use**: a customer may choose renewable
    electricity to supply a fixed percentage of their monthly
    electricity use. This is typically priced as a premium on a cents
    per kWh basis over the standard rate or as a fixed charge per kWh.
    The latter approach has the advantage of sheltering the green power
    purchasers from any changes in fossil fuel rates. The monthly cost
    for these products varies with your energy use and the percentage of
    renewable energy you choose to buy.

In researching renewable electricity options, you may encounter other
products that involve a fixed monthly fee to support a given amount of
renewable generation capacity, or even an option to contribute to a
renewable energy fund to provide financial assistance to proposed
renewable projects. While these products can be an effective way to
assist the green power industry, they are not included in this document
because they do not result in a metered amount of renewable electricity
being delivered to your facility. In order to quantify the environmental
benefits from your green power purchase, it is necessary that your
purchase be tied to the generation output of a renewable power
generator.

### 4.2 Tradable Renewable Certificates 

Tradable renewable certificates (also known as green tags or renewable
energy certificates) represent the environmental attributes of power
generated from renewable electric plants. These attributes are split off
and sold separately from the underlying commodity electricity. When
these attributes are sold separately, the seller creates a renewable
energy certificate that can be traded. One renewable energy certificate
typically represents the renewable attributes associated with a single
megawatt hour of renewable electricity.

Because tradable renewable certificates are sold separately from
electricity, they can be purchased from locations anywhere, enabling
organizations to choose renewable power even if their local utility or
power marketer does not offer a green power product. Although there are
theoretically no geographic constraints on purchasing tradable renewable
certificates, verification systems to record and track the exchange of
certificates are not yet available in all countries. The location of
environmental benefits may also be important to some purchasers.

![](media/image1.png){width="4.927083333333333in" height="1.5625in"}

> **Figure 1: TRCs represent the environmental benefits of renewable
> electricity generation** (Source: Center for Resource Solutions)

Some of the key aspects of certificates are that they are sold
separately from electricity service (i.e., customers do not need to
switch from their current electricity supplier to purchase
certificates), and they are purchased based on a fixed amount of power,
rather than on a customer's daily or monthly load profile. Because
certificates are independent of your energy use, load profile and the
energy delivery system, they provide greater flexibility than purchasing
energy and attributes bundled together as renewable power. Price
premiums for certificates are typically less than for renewable
electricity products because the supplier does not have to deliver the
power to the TRC purchaser (with the associated
transmission/distribution costs), and the supplier is not responsible
for meeting the purchaser's electricity needs on real-time basis.

An example of the flexibility provided by certificates is that if your
organization cannot commit to purchasing green power on a long-term
basis, you can consider buying tags for special events such as major
meetings. The Department of Energy has used this approach for both the
Labs for the 21st Century annual meetings and the FEMP Energy 2003
meeting. In both cases, the conference organizers purchased green power
products equivalent to 100% of the energy expended at the meetings.
Because special events inherently generate a lot of publicity, the
public (and employee) relations benefit from this approach can be
significant.

For a company or institution with operations and offices in multiple
locations, purchasing tradable renewable certificates can consolidate
the renewable energy procurement process, thus eliminating the need to
procure renewable electricity for different facilities through multiple
suppliers. One possible drawback of tradable renewable certificates is
they do not shield the purchaser from the price fluctuations of their
underlying commodity electricity supply. Thus the price-hedge benefits
of renewable electricity do not accrue to the purchaser of TRCs.

Another important aspect of tradable renewable certificates is
verification of their renewable content. The Center for Resource
Solutions now operates a Green-e certification program for tradable
renewable certificates. For additional information see Appendix E.

> **Text Box: The Role of Product Certification**
>
> One of the major concerns with buying green power is ensuring that you
> get what you pay for. It can be difficult, as a purchaser, to
> substantiate claims made about the quantity and characteristics of the
> product you have purchased. In addition, without independent
> information about the product you purchased, you may be unable to
> ensure public acceptance of your purchase and avoid criticism from
> external stakeholders. Third-party certification has been developed to
> address these concerns.
>
> Third-party certification usually sets standards for green power
> products in the following areas:

-   Minimum levels of environmentally-acceptable renewable resources,

-   Overall environmental impact,

-   Ethical conduct for suppliers, including advertising claims, and
    regular reporting.

> Third-party certification usually also carries a requirement for
> independent verification by an auditor to document that green power
> purchased equals green power supplied. In the United States, the
> predominant certification standard for green power is called Green-e,
> a program and trademark of the non-profit Center for Resource
> Solutions. See Appendix E for additional information.

### 4.3 On-site Renewable Generation 

In addition to buying renewable electricity from a utility or energy
service provider or purchasing tradable renewable certificates, you can
install renewable power generation at your facilities.

On-site renewable generation can offer advantages such as enhanced
reliability, power quality, and protection against price volatility, as
well as a visible demonstration of your environmental commitment. In
many states, electricity generated with on-site renewable generation can
be credited to your electric bill through a process called net metering,
although this is usually limited to only small installations. Net
metering allows an owner of an on-site power system to sell electricity
back to the grid at the same price they pay to purchase power. This can
make an on-site renewable power system much more financially attractive.

On-site renewable energy technologies for power generation include
photovoltaic panels and wind (generally small wind turbines). If you
have a large facility sited near a municipal landfill or sewage
treatment plant, you may be able to use recovered methane gas for
on-site power production. Following is a more detailed description of
each of these options:

-   **Solar**. Photovoltaic (PV) cells and modules can be configured to
    just about any size from a few kW up to over one MW. There are many
    examples of on-site PV generation, from schools to homes to
    community facilities to service stations. Building-integrated
    photovoltaics can serve as a building component, displacing other
    building material costs.

-   **Wind**. Wind turbines vary in size. A typical small unit provides
    less than 25 kW. Large turbines can range from 500 kW to 2 MW.

-   **Landfill and sewage methane gas**. These projects generate
    electricity using methane gas derived from landfills or sewage
    treatment plants. The methane gas may also be generated using
    digesters that operate on manure or agricultural wastes. The methane
    gas is then converted to electricity using an internal combustion
    engine, gas turbine (depending on the quality and quantity of the
    gas), direct combustion boiler and steam turbine generator set,
    microturbine unit, or other power conversion technology. Fuel cells
    are increasingly another option for power production, which offer
    the benefit of essentially no on-site air emissions and higher
    efficiency than other forms of generation. However, they cannot be
    considered a renewable resource unless they operate on a
    renewably-generated fuel (such as digester gas or hydrogen derived
    from PV or wind power). Methane gas projects are typically sized
    from 0.5 to 4 MW.

-   **Biomass***.* Biomass is plant material burned in a boiler to drive
    a steam turbine for electricity production. This type of system is a
    good candidate for combined heat and power (CHP), at facilities with
    significant thermal loads. Biomass projects are best suited for
    locations with abundant biomass resources (often using waste
    products from the forest industry or agriculture).

In this era of power reliability problems and national security
concerns, on-site renewable generation offers many advantages over
central-station and fossil-fueled power plants. On-site generation, if
properly designed, can provide backup power for critical loads if power
from the grid is interrupted This ability to operate independently of
the power grid is a major advantage for renewable power systems,
particularly at remote facilities not served by the grid. An on-site
renewable generation system can also be designed with energy storage or
backup generation, to provide power during periods when the renewable
resource is unavailable. Because renewable generation technologies tend
to be small-scale and modular, the on-site generation system can be
designed in a way that enhances the redundancy and diversity of a
facility's energy supply. On a broader scale, by reducing the use of
fossil fuels and electricity that are transported through our nation's
vulnerable energy infrastructure, locally-sited renewable generation can
improve our national energy security.

Compared to purchasing power from the grid or installing fossil-fueled
generation, on-site renewable generation has a higher capital cost and
relatively lower operating costs. Although this cost profile makes it
more difficult to justify the initial investment in on-site renewable
generation, once that investment has been made, the annual budgets for
maintaining the system are much easier to justify (compared to
purchasing renewable electricity), which facilitates a long-term
commitment to renewable power.

A potential barrier to installing your own generation capability is the
regulations (or uncertainty about the regulations) for connecting to the
utility distribution system, commonly referred to as "interconnection."
Standardization of interconnection rules can help, but sometimes the
rules developed for large generators are unnecessarily burdensome for
small installations. In recognition of this problem---and to encourage
on-site generation---a few states have adopted simplified
interconnection rules, and national standards are being developed to
ease interconnections. Net metering laws usually provide more lenient
interconnection rules for small installations.

**Table 2: Comparing Green Power Options**

  ------------------ ------------ ------------ ------------------ ------------------
  **Type**           **Size**     **Resource   **Time to          **Time/Expertise
                                  Data         Design/Procure**   to Maintain**
                                  Needed**                        

  **Green Power                                                   
  Purchase**                                                      

  Renewable          S-L          Low          Low                None
  Electricity                                                     

  Tradable Renewable S-L          Low          Low                None
  Certificate                                                     

  **On-Site                                                       
  Renewable                                                       
  Generation**                                                    

  PV                 S-M          Low          Low                Low

  Wind               S-L          High         Med                High

  Biomass            S-L          High         Med-High           High

  Landfill Gas /     M-L          High         High               High
  Methane                                                         
  ------------------ ------------ ------------ ------------------ ------------------

S = small (under 50 kW) M = medium (50-499 kW) L = large (more than 500
kW)

## 5.0 Preliminary Steps to Purchasing Green Power

To complete a green power purchase, you should follow a systematic
process to determine whether green power makes sense in meeting your
facility's energy needs, the best products for your situation, and the
steps needed to procure those products. Figure 1 describes the steps you
can follow in this systematic process. The first steps are the same
regardless of what type of green power product you ultimately purchase.
These preliminary steps are described in this section. The final steps
in the purchasing process differ between purchased green-power products
and on-site renewable generation, because of the different nature of the
products being purchased in those two cases. Those steps are explained
separately in later sections of this guide.

> **Figure 1: Steps to a successful green power project**

![](media/image2.png){width="5.698611111111111in"
height="8.629166666666666in"}

### 5.1 Assemble a Multifunction Team 

Identify people in your organization who have an interest in green
power. These may include high-level decision-makers, as well as staff
from the purchasing, facilities/energy management, environmental health
and safety, legal, corporate relations and/or marketing departments.
Investigate their concerns and identify any issues that need to be
addressed. Experience has demonstrated that failure to form a team will
often lead to contention down the line, whereas inclusion of
representatives of a variety of interested departments has proven to be
important in completing procurements of green power. It is also possible
that these other departments (such as environmental or marketing) can
contribute funds to help defray portions of the preen-power project
cost.

In forming a team, it is important to designate a team leader who will
be the point of contact throughout the process and can delegate
responsibilities to the team members. The choice of team members will
probably depend on the type of products being considered for purchase.
It is also important to involve senior management in the planning and
decision process. In many cases, the largest champion for buying green
power is the organizational leader (CEO, president, etc.). With this
high-level support, buying and promoting green power is much easier.
Some organizations have also had success involving their employees (or
students, in the case of educational institutions) in the product
selection process.

[]{.mark}

It is also important when assembling the team to decide on your
objectives for purchasing green power. Questions to consider are:

-   Why are you considering green power?

-   What do you hope to get out of it?

-   What selection criteria are important to your organization?

-   How important is buying new renewable sources?

-   How important is independent certification and verification?

### 5.2 Analyze Your Energy Needs 

In order to understand your power needs, take an inventory of your
electricity use. Collect data from your utility bills for each facility
or business unit, and for your total organization. This will help you
understand (1) where to look for energy efficiency savings, (2) how much
green power to buy and, (3) the environmental impacts of your
electricity use. At a minimum, monthly electricity consumption data
should be provided; peak demand and interval data are valuable where
available. An organization should study its consumption data over the
past year prior to specifying requirements. Outside organizations, such
as EPA's Green Power Partnership, can help with each of these steps.

As mentioned earlier, green power should be considered part of an energy
portfolio that includes energy efficiency upgrades, load management,
combined heat and power, and green power. The more you can reduce your
power requirements, the smaller the green power purchase that will be
required, which can make green power more affordable. In some
organizations that have successfully purchased green power, the energy
bill savings from energy efficiency upgrades gave them the budgetary
flexibility to be able to afford a price premium for green power.

There are many resources available to help improve the energy efficiency
of your buildings and equipment. A good starting point is the Energy
Star Portfolio Manager, an online tool that can help you rate how your
building's energy usage compares to similar buildings. The Energy Star
web site ([http://www.energystar.gov](http://www.energystar.gov/))
provides some simple energy savings tips, and can connect you with an
energy services company if you want additional assistance, such as a
facility energy audit.

If you know your organization's annual electricity consumption, you can
also calculate the emissions associated with your current use and
estimate the emissions that could be displaced by a green power
purchase. The EPA Green Power Partnership offers an online tool to
assist with these calculations
(<http://www.epa.gov/cleanenergy/powerprofiler.htm>).

### 5.3 Identify Green Power Options

This step involves assembling quick information about your green power
options, in order to rule out options that are clearly not feasible for
your facility. The result of this stage should be a narrower list of
options that can be evaluated in more detail in the following steps.
Another goal of this step is for you to gain a basic understanding of
electricity markets in your area and green power technologies that are
available.

In weighing the options for green power, there is a fundamental decision
to be made about whether to generate power yourself or purchase power or
TRCs from outside vendors. The primary differences between these options
are the ease and cost of implementation, and the length of time over
which you realize the benefits. On-site renewable generation involves an
up-front investment (either as part of a financed project or a capital
appropriation) but the return, in terms of reduced conventional energy
consumption, lasts for up to 30 years. Renewable electricity purchases
and tradable renewable certificates, on the other hand, cost much less
up-front and are relatively easy to procure, but do not result in a
tangible asset that continues to generate benefits into the future.

Your organization's motivations for purchasing green power will help you
decide which of these costs and benefits are more important to you, and
thus which type of product is most appropriate. For example, an
organization driven by a desire to manage fuel price risk may be more
interested in buying fixed price renewable electricity. In this way,
despite the premium one usually pays above the standard market rate for
electricity, locking in a fixed price can provide a hedge against
volatile spikes in fossil fuel-generated electric power prices. An
organization that places high value on reliability of power supply may
be more interested in on-site renewable generation. These options can
also be combined to create a power portfolio that meets your
organization\'s needs. For instance, an organization might install
on-site generation to meet part of its electrical needs, while
purchasing TRCs to offset some or all of its remaining electricity
usage. Likewise, large organizations with facilities in multiple states
will need to be flexible in selecting the appropriate type of green
power product for each state.

Your choice of green power options will be driven in part by the
electricity market environment in the state in which your facility is
located. For renewable electricity, if your state electricity market has
been restructured, you can probably choose both your supplier and the
product you prefer. Each state has different rules governing power
marketers, and the level of competition varies among states, so you will
need to collect information about the products available in your area.
If your state continues to regulate electric utilities that have a
monopoly franchise in specific geographic areas, your utility may offer
a renewable electricity option (sometimes called "utility green
pricing"). Large electricity purchasers may be able to work with their
local utility or electricity provider to tailor a product to meet their
unique needs.

The organizations listed in Appendix A, as well as the resources in
Appendix G, can provide the information you need to assemble a list of
green power products offered in your area. In addition, your state
government (usually the public utilities commission) may maintain a list
of power marketers offering green power products in your area. If your
organization has facilities in several states, it can take a lot of
effort to determine all the green power products that are available to
your facilities. For smaller facilities (such as retail stores), it may
be easier to have a single point of contact compiling this information
and making it available across your entire organization. Larger
facilities (such as factories or research campuses) often have enough
expertise to gather information and negotiate contracts on their own.

For on-site renewable generation, you will need to assess the renewable
energy resources that are available at your facility. These include the
quality of wind and solar resources, availability of biomass fuel or
landfill gas, and siting constraints (such as space limitations or
shading from neighboring buildings). You should also make a preliminary
check of your utility's and state interconnection rules to make sure
there are no obvious provisions that would prohibit grid-connected,
on-site generation. The goal of this stage is to eliminate any renewable
options that are clearly not feasible at your site.

## 6.0 Steps to Procuring Renewable Electricity and Tradable Renewable Certificates

### 6.1 Develop Selection Criteria

The goal of this step is to identify an appropriate vendor and a
preferred product. In conducting this screening, it is important to
explicitly identify the criteria you will use to select a supplier and
product, keeping in mind which criteria are more or less important to
your organization. The relative ranking of criteria should be based on
the goals you identified early in the process when you assembled the
project team.

In areas that have a choice of green power suppliers, the following
criteria will help distinguish between them.

-   **Reputation.** Assessing a supplier's reputation may require
    references and following the energy industry press. It also helps to
    ask your contacts in environmental organizations for their opinion
    of the supplier. A supplier's reputation is influenced by factors
    such as how well they honor commitments, how easy they are to work
    with, and how well they are viewed within the industry.

-   **Financial Strength.** The financial strength of a supplier is also
    a key consideration. Again, researching the company's web site and
    annual report, and looking for any SEC filings by the company, may
    be of help.

-   **Location.** If buying from a local supplier is important to you,
    call the supplier and find out where its headquarters and branch
    offices are located. Public utility commission web sites often have
    contact information for registered retail suppliers.

-   **Product Choice.** Some suppliers offer several green power
    products, varying in the amount of renewable power, types of
    resources, etc. If you have a choice of several green power products
    from one supplier, it may give you the flexibility to change the
    product you purchase in the future, without having to search for a
    new supplier and negotiate a new contract.

-   **Social Responsibility.** Selecting a supplier that is socially
    responsible and committed to the environment may be important to
    your organization. Determining a supplier's social values will
    require some research. The supplier's web site is a good place to
    start. Read its annual report or environmental report, examine the
    supplier's other electricity products, and review the supplier's
    other business activities.

Selecting a product requires weighing several different criteria. Price
is always a factor, but other factors such as the quality of the
renewable power are also important. Quality mostly relates to the
environmental benefits---the percentage of renewable energy, how much of
it comes from new sources, and what kinds of renewable resources are
used.

The following are some factors to consider in your selection of a green
power product.

-   **Price**. green power prices may be quoted in total cents per
    kilowatt-hour, or in extra cents per kilowatt-hour (incremental to
    your standard power rate). If you are in a regulated utility's
    service territory, you should compare the price of green power to
    your normal tariff. In competitive markets, there are three possible
    prices you could compare your green power price quote against:
    electric service under default utility tariffs, electric service
    under the lowest price competitive alternative, or the electric
    service that you are currently receiving. You can choose which
    baseline is most appropriate for your company. It is also important
    to determine whether the price is fixed over time or fluctuates with
    changes in standard power rates (some utility green pricing program
    participants are exempt from variable fuel charges).

-   **Percent of** **Renewable Energy.** Percent of renewable energy
    refers to how much renewable power is in the product resource mix;
    is it 100% renewable power or 10% renewable power? If you buy
    certificates or block products you can still calculate the
    percentage of your energy use that is represented by renewable
    power.

-   **Percent of New Renewable Sources.** It is important to support
    existing renewable generation, but it's the new generation that
    provides incremental environmental benefits. Buying electricity from
    new renewable generation yields immediate and long-term
    environmental gains. An existing facility presumably sold power into
    the grid prior to a specific green power purchase and would have
    continued to provide power into the grid in the absence of that
    purchase, regardless of whether or not it was capturing a price
    premium. Purchasing from existing facilities, therefore, does not
    necessarily change the composition (or the environmental impact) of
    a region's generation mix. Not only do new, cleaner sources of
    electricity provide significant environmental improvement over most
    current generating resources, but purchases from new renewable
    sources create the consumer demand necessary for even more new
    renewable resources to be constructed.

> The case for purchasing new renewable sources should not be
> overstated, however. In some situations, purchasing from existing
> renewable generation facilities can provide support for existing
> facilities that otherwise would have been under-utilized or would not
> have captured any green premium on their power sales. Maintaining an
> existing renewable facility prevents its displacement by dirtier non
> renewable plants. And in the case where demand for green power exceeds
> supply, purchasing from existing facilities can eventually lead to the
> installation of new renewable generation capacity.

-   **Type of Renewable Energy/Resource Mix.** This refers to the type
    of resources that are used in the green power product. For example,
    is the product generated from wind, biomass, solar, geothermal or
    hydro? Some have more environmental impact than others, with
    different associated costs. Wind, solar, and geothermal power are
    typically uncontested as environmentally preferable energy sources.
    Each is renewable and non-emitting, with little impact on the land
    or local habitats. Hydropower, biomass, and municipal sold waste are
    regarded as somewhat more controversial among certain environmental
    groups. Hydropower dams may drastically alter river habitats and
    fish populations, biomass facilities may emit significant quantities
    of NOx, and burning municipal solid waste may release heavy metals
    and other toxins into the environment.

> It is also important to check the environmental characteristics of any
> non-renewable generation resources, as they contribute to the overall
> environmental impact of the power you purchase. One advantage of
> buying Green-e certified power is that the certification requires a
> product's non-renewable resources to be on average cleaner than the
> local system power.

-   **Contract Length.** Some buyers prefer a short contract length in
    case the market changes and better offers come along. However, you
    may be able to lock in a lower price if you make a multi-year
    commitment to buy, and a longer term may also give you greater price
    stability. In assessing the value of price stability, you should
    also be aware of "typical" market fluctuations in power prices, and
    how the price of renewable electricity can vary. The contract might
    include renewal options, which can offer flexibility in the future.

-   **Third-party Certification and Verification.** The green power
    product may be certified and verified by an independent third party.
    Such certification may provide credibility and confirmation of
    environmental value. More information on certification is provided
    above and in Appendix G.

-   **In-state Renewable Generation.** In-state renewable generation is
    desired by those who feel it is important to support the local
    economy, and by those who want to emphasize local environmental
    benefits. Some renewable electricity products consist of resources
    located out-of-state, while tradable renewable certificates can be
    based on generating resources located virtually anywhere. If you
    want to support the development of domestic or local renewable
    resources, you will want to purchase certificates from plants
    located in the area of interest (either within the U.S. or located
    on, or able to deliver to, your regional electricity grid).

-   **Specific Generation Facility.** Some green power providers offer
    power that is generated at a specific site, such as a nearby wind
    farm. These products offer the benefit of being more tangible, in
    that they are associated with a single generating facility. In some
    cases, power can be purchased in blocks that are tied to generating
    units, such as the annual output of one wind turbine.

### 6.2 Collect Product Information

Now you are ready to collect detailed information about the green power
options being considered. A good place to start is the many Internet
sources listed in this Guide. Each of these sources will provide links
to other resources. It is important to collect sufficient information to
evaluate each of the selection criteria you will use in your decision.
Information should be as consistent as possible between suppliers and
products, to allow valid comparisons. A good way to collect consistent
information from several suppliers is through an exploratory letter or a
request for information (RFI) addressed to specific suppliers.

In many states that are open to electricity competition, suppliers are
also required to provide an electricity label--like a food nutrition
label--that provides information in a standard format and can make
product comparisons easier. This label information is generally
available from your state's public utility commission. Another source of
public information are third-party certifiers, such as Green-e, who
provide information about the products they have certified to meet
minimum environmental standards. All Green-e certified products provide
standardized product content labels to their customers prospectively.
The final source of information is the suppliers themselves.

As your team begins to collect data, focus on estimating the cost of
green power for your organization, and evaluating the cost/value
tradeoff. If at any point you are having trouble finding data you need,
contact one of the organizations that sponsored this guidebook (see
Preface).

### 6.3 Develop a Procurement Plan

As you narrow down your selection of the appropriate supplier and
product, you may find it helpful to develop a procurement plan that
documents your team's decision process and addresses potential barriers
you may encounter in purchasing green power. Besides providing a focus
to help your team reach consensus, a procurement plan can also help
communicate your conclusions to help convince others in your
organization that purchasing green power is a wise choice.

The main audience for the procurement plan should be the managers who
need to support the purchase decision. Management buy-in should occur as
early in the process as possible. Once your team can make a strong
argument showing the costs and benefits to your organization of
purchasing green power, make a presentation to management. Expect
management to ask questions about the products you would buy, their
cost, and the benefits of your proposal. It is also a good idea to find
out what limits management might place on a green power purchase, or
whether they would be bolder than you thought.

Besides convincing management, the procurement plan can also help
overcome internal resistance to green power within your organization.
Some organizations have outdated perceptions about the reliability of
renewable energy technologies, misunderstandings about using an
intermittent resource, or worries about the cost. As part of the
procurement process, you will probably need to educate other individuals
about the benefits of green power purchasing to overcome these
attitudes. The organizations that sponsored this guidebook can provide
information to help overcome barriers that you may encounter.

The scope and detail in your procurement plan will depend on your
organization's needs and requirements. You should consider addressing
the following issues in the procurement plan.

#### Scope of procurement

Describe the amount of power that will be purchased (either as an
absolute amount or as a percent of total power use) and for which
facilities. If this procurement is a trial that may lead to additional
future purchases, describe the criteria that will be used to judge its
success. Also describe whatever is known at this point about future
procurement phases.

#### Expected benefits

Keeping in mind the general benefits outlined earlier in this guide,
describe the specific benefits that you hope to achieve by purchasing
green power for your facilities. Where possible, these benefits should
be linked to your organization's environmental goals.

#### Financial considerations

Cost is usually the primary concern with green power, so it should be
treated explicitly in the procurement plan. Several strategies are
available to help minimize and manage the extra cost of green power

-   **Purchase green power for a portion of your use**. You don't have
    to purchase green power for all your electricity needs. For example,
    you might buy green power for just 5% or 10% of your electricity
    use. Purchasing 5% green power may add less than 2% to your
    electricity bill. Alternatively, some renewable electricity products
    are lower-cost because they are already blended with conventional
    electricity.

-   **Commit to a longer-term purchase**. Contract length should be
    considered in conjunction with the quantity and cost of power
    purchased. If you choose a fixed price per kWh rate or even a fixed
    renewable premium, a longer contract increases price risk but also
    provides price certainty. Conversely, a longer contract (typically 3
    years or more) should reduce risk to the supplier, allowing them to
    offer a lower rate than under a shorter contract. The right contract
    length will depend on your situation and your expectation about
    future power prices (both conventional and renewable).

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-   **Seek a fixed price contract**. Because of the predictable fuel
    cost, renewable energy should be available at a fixed price without
    any fuel cost adjustments. Check with your supplier if green power
    customers are exempted from fuel cost adjustments.

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-   **Offset the cost with energy efficiency savings**. As described
    above, reducing the total amount of electricity you purchase can
    help make green power more affordable. In your review of green power
    providers, you may find that some also offer energy efficiency
    services, with the goal of no net increase in power bills for their
    customers.

> \[*Case Study*: One of the largest public universities in the country,
> Pennsylvania State University is purchasing the output of over three
> wind turbines' worth of new wind energy. Penn State measurably cut
> their energy costs by investing in efficiency retrofits that save the
> university system hundreds of thousands of dollars a year. These
> savings have helped defray the cost of Penn State's wind energy
> purchase.\]

-   **Use savings from competitive choice**. If you have competitive
    choices, either for green power or for commodity electricity, you
    may be able to save on energy costs and use the savings to purchase
    green power. You could limit the extra cost of green power to the
    amount of savings from competition. Be aware that switching to less
    expensive electric power can also mean dirtier power, so determine
    if any increased emissions cancel out avoided emissions from green
    power.

-   **Specify a price cap**. In your solicitation, you could limit the
    cost of green power to a fixed cents per kWh, or to an index linked
    to market rates. You could also simply place a cap on the renewable
    portion.

-   **Look for incentives for buying green power**. A few states offer
    incentives that reduce the cost of green power. In almost all cases,
    these incentives are paid directly to the power marketer, so the
    incentive will already be factored into the price you are quoted.
    End-users usually do not need to apply separately to receive these
    benefits. The power marketers you contact and your state energy
    office will be able to provide information about any green power
    purchasing incentives that are paid directly to the purchaser. For
    more information on available incentives, visit the Database of
    State Incentives for Renewable Energy at
    [http://www.dsireusa.org](http://www.dsireusa.org/).

Even with the cost reduction techniques listed above, green power will
often still have a price premium, compared to the standard power you
would purchase. To justify this extra expense, it's important to
consider the additional benefits that green power brings--in marketing,
public relations, employee satisfaction, shareholder relations,
etc.--and compare your organization's ongoing expenditures in these
areas to the price premium for green power. When all the benefits are
considered, many organizations decide that green power is an inexpensive
way to help achieve various organizational goals.

#### Procurement methods

The appropriate procurement method will depend on the green power
options available to you and your organization's procurement rules.
Generally, the more load you can aggregate, the more attractive a
customer you will be to a potential supplier. If your load is small, you
may be limited to purchasing off-the-shelf products, or calling around
to a few suppliers. Another consideration is that some suppliers may
find it more difficult to serve a geographically dispersed load,
especially if some of it is in regulated state markets, and some is in
restructured markets. If you are in this situation, purchasing TRCs may
reduce this complexity.

In the past, because green power was relatively new, organizations found
it more difficult to purchase than conventional power. This is becoming
less of a problem, however, as green power becomes more common. The
following points explain the typical ways to procure green power.
Federal agencies will need to work within the unique procurement rules
applicable to the Federal government, which are explained further in
Appendix B.

-   **Negotiate with your utility**. Procurement is simple, though you
    tend to have fewer choices, if you are served by a utility in a
    regulated market where there is only one supplier. If your local
    utility offers a green power option, visit their website and then
    call to discuss your interest. Perhaps the only issue is the
    quantity you are going to buy, but you may be able to negotiate a
    slight price break if you are making a large purchase. If your
    utility doesn't offer a green power option, and you are a large,
    highly visible customer, you may be able to encourage them to offer
    green power by promising to buy a large amount.

-   **Phone Calls to Multiple Sellers**. You can keep the procurement
    process relatively simple by calling the few green power providers
    active in your area. You may find an off-the-shelf product that
    meets your needs. If you want something different, and there are
    only one or two green power suppliers in your area, call them to
    discuss your options. Let them know you would be interested in a
    proposal. After discussion you may be ready to enter direct
    negotiation with one of them on product definition, price and terms.
    Or they may be willing to tailor something to your organization's
    needs if you are planning a large enough purchase.

-   **Issue Request for Proposals**. Large companies, and public
    institutions in particular, often issue a formal solicitation or
    request for proposals (RFP). An RFP requires more time and effort
    for preparation, evaluation, and negotiation, but it may be more
    suitable for a large purchase, and in situations where there are
    more than a few green power options available. With an RFP, it is
    important to state your objectives clearly in advance. For example,
    a greenhouse gas reduction goal can be translated into a quantity of
    clean energy purchased. In preparing your RFP, you should also keep
    clearly in mind the evaluation criteria, discussed above, you will
    use to select a supplier.

RFPs can be as simple as a letter sent to selected suppliers, describing
your objectives and asking for a bid. This would be appropriate if just
a few suppliers are available. RFPs can also be more formal, casting a
wider net through a broadly advertised solicitation. This requires more
effort to prepare and evaluate responses. Government agencies will need
to follow the procurement rules governing their agency.

> You can also pursue a hybrid, two-step process, in which you first
> issue a Request for Qualifications (RFQ), and from those responses you
> send a more detailed RFP to selected suppliers that meet your general
> qualifications. The RFQ would be broadcast to a larger audience, not
> only to find out who meets your qualifications, but also to gauge the
> amount of interest.
>
> For large quantity purchases, RFPs can also be addressed directly to
> renewable power generators (wholesale) as well as retail suppliers.
> Buying direct from generators may lower your cost, but will probably
> require a longer-term purchase commitment. The Green Power Partnership
> offers assistance to partners in putting together a green-power
> purchase RFP; FEMP provides the same service for Federal agencies.

#### Special considerations for tradable renewable certificates

If delivered, renewable electricity products are not an option for your
organization, consider purchasing renewable energy certificates. These
attributes can be bought and sold separately from the underlying
commodity electricity.

Tradable certificates can be purchased from certificate marketers or
sometimes directly from renewable energy generators. Several
environmental brokers are also active in renewable energy certificate
markets. These brokers offer another approach to procurement that is
increasingly used by large purchasers. Brokers do not own the
certificates but rely upon their knowledge of the market to connect
certificate buyers and sellers for a small fee. They can help negotiate
deals that take into account your special needs or concerns. EPA's Green
Power Locator
(<http://www.epa.gov/greenpower/buyguide/index.html>[)]{.underline}
provides links to retail and wholesale marketers of renewable energy
certificates, and the Green Power Network lists these plus certificate
brokers
([http://www.eere.energy.gov/greenpower/certificates.shtml]{.underline}).
Finally, Green-e

lists those certificate marketers and brokers that offer certified
products
([http://www.green-e.org/what_is/dictionary/trc.html]{.underline}).

There are special issues that you should address in buying certificates.
The attributes that the certificate represents should be clearly stated
in a contract. Some marketers may offer renewable energy certificates in
which some environmental attributes (i.e., carbon emission reductions)
have been sold separately to another party. Your contract should express
in writing that the purchaser receives title to the environmental
attributes if you plan to claim environmental credit for these
attributes. If any attributes are disaggregated and not included, then
the exceptions should be clearly stated and publicly represented, so
that an informed third party can understand that the product sold does
not contain all of its environmental attributes. For certification of
environmental benefits, you may wish to consider products certified by
Green-e (see Appendix E).

You may want to buy certificates only from renewable energy generators
or marketers that meet your specifications, so the same selection
criteria mentioned previously in this chapter should still be considered
in your procurement process. In fact, because certificates can come from
anywhere, where the certificate was generated (and therefore where the
environmental benefits are likely to accrue) may be more important than
it would be for purchased green power.

## 7.0 Steps to Developing an On-site Renewable Generation Project

On-site power projects tend to be more complicated than power purchases
because they require more external coordination with your utility, local
governments, and contractors. For this reason, the process you follow is
likely to take longer and require more outside technical expertise than
would a power purchase. The following steps should help you through this
process. The appendix on Resources for Further Research also lists many
information sources that will help in this process.

### 7.1 Screen the Technologies

Based on work you've done in the preliminary steps (section 5), you
should have a good idea of your facility's energy needs and the
renewable resources that are available at your site. The next step is to
perform a screening analysis to identify those options that are best
suited to your site. This screening should include an economic
evaluation of the various renewable options, comparing the
cost-effectiveness of your current energy situation to that with a
renewable power system installed. This screening should be based on the
financial assessment criteria that you would normally assess before any
capital investment such as this (using metrics such as life-cycle cost,
rate of return, or payback). Your analysis should account for
interconnection rules (e.g., insurance requirements or standby charges),
as well as any net metering laws that apply to your situation. The
result of this screening will be a specific technology approach that
meets your facility's energy needs.

For on-site renewable power, bundling of energy efficiency with
renewable power is a common practice. Your site-specific situation
(e.g., whether the generation system is grid-connected, your facility's
load shape, your utility's rate structure, etc.) will determine the
appropriate type of efficiency measures to include. At this point, it's
a good idea to consider whether additional energy efficiency projects
make sense in conjunction with the specific renewable generation
technologies you are considering.

In order to conduct an economic analysis, you will need to know the
approximate size of the renewable power system you hope to install. The
size can be driven by the load to be served by the system, your capital
budget, or physical constraints at the site (such as rooftop area for PV
systems, or the rate of biomass fuel production). One option is to
install the system incrementally, purchasing what you can afford
immediately and adding more capacity over time. Because wind and PV
technologies are modular, they are especially suited to this approach. A
contractor or utility representative can help you determine the right
size system to meet your needs. You can also use one of the software
tools listed in Appendix F.

The economic analysis should also address whether the on-site power
system will be expected to provide backup power during utility grid
outages. If so, the system will need to be designed so that it
disconnects from the utility grid when a power outage occurs. You will
also need to decide whether the system will include energy storage or
backup generation, to provide power during times when renewable
resources are unavailable. The analysis will also be affected by whether
the renewable generation will be part of a combined heat and power
system (applicable to systems involving fuel combustion, such as
landfill gas and biomass).

### 7.2 Acquire Resources and Assistance

As mentioned before, on-site power systems are more complicated than
power purchases. If you choose to own and operate a small power system,
there is a lot to learn, but there are excellent information resources
available. Before you buy, you will want to study the technology and
develop sufficient familiarity with it to know what you want and what
questions to ask, such that you will be able to write a procurement
specification. At this point, it makes sense to call on outside experts
who can help you with the technical and financial aspects of a renewable
power project. Technical assistance is available through your local
utility, your state's energy office, energy service providers, energy
service companies, consultants, manufacturers, and equipment vendors. In
addition, FEMP offers technical assistance to Federal agencies.

The financial details are usually what make or break a power project. At
this point it is wise to collect information about incentives that could
make the project more cost-effective. Some state programs may also
require that only certified installers install systems. Many states
offer financial incentives specifically for customers that install
qualified renewable generation systems. These incentives may take the
form of direct payments (rebates), competitive solicitations, consumer
financing, or reduced taxes (either sales or property tax). In addition,
the Federal government offers an investment tax credit for solar and
geothermal energy systems, among other incentives for renewable energy.
For more information, visit the Database of State Incentives for
Renewable Energy at [http://www.dsireusa.org](http://www.dsireusa.org/).
Your state energy office, local utility, or renewable-energy equipment
vendor will also have information about which incentive programs apply
to your situation. \[Case study of how a particular project used
incentives -- possibly the USPS Marina Center PV installation, which
used CEC and FEMP funds to pay for about 3/4 of the project cost.\]

Utility rate impacts should also be investigated carefully. Check with
your local utility to see if on-site generation could lower your demand
charges or generate electricity at a time of day when prices are higher.
Facilities with their own generation systems sometimes also qualify for
reduced "self-generation" rates.

### 7.3 Develop a Project Plan

Once you have decided on a specific technology, it is time to conduct a
detailed feasibility study. This study will carefully quantify all the
costs and benefits of the project to evaluate its cost-effectiveness. To
the extent possible, it should be based on inputs that are as specific
as possible to your situation, such as vendor quotes.

If the project appears feasible, you can then develop a plan to have the
renewable power system financed, built and installed. Financing is a
critical aspect of the project that must be addressed by the project
plan. The financing should also account for any incentives for which
your system is eligible. Make sure the system is designed in a way that
meets the requirements of the incentive program.

In addition, some renewable resources, such as biomass, will probably
require air permits from your local air resources control board. Your
project plan should account for the time and expense of acquiring these
permits. As with any other type of facilities project, you will need to
acquire any land-use and building permits and variances that are
required for your project. You also will need to apply for
interconnection with the local electric utility (for grid-connected
systems), which can be a complex and time-consuming process.

#### Procurement strategy

Procurement for on-site generation will be different from power
purchases. In most cases, you buy, own and operate the generation
equipment. In some circumstances you may be allowed to write a
performance contract to buy the electricity generated by a renewable
energy system installed on your property, but this approach may be
limited in states where you are allowed to buy electricity only from the
utility that serves your area.

The procurement options for on-site generation fall generally in these
categories:

-   **Act as the general contractor**, If you have design engineers on
    staff, they might develop the specifications and then solicit bids
    for equipment and installation. This arrangement works well if you
    want to do some of the work in-house. You should keep in mind,
    however, that if your organization has no experience with renewable
    energy systems, then the learning curve is itself a cost and you
    bear the risk of poor system performance.

-   **Hire a general contractor for a turnkey system**. You would
    probably use an RFP to select an equipment manufacturer, a system
    designer, or a system installer to work with you to design the
    system to your needs, procure materials, arrange for installation,
    and commission the system. It is worth noting that some companies
    (particularly in the PV industry) are vertically integrated from
    manufacturing, to design and installation, to operations and
    maintenance.

-   **Hire an Energy Services Company (ESCO)**. An ESCO would be
    responsible for design, installation, maintenance and financing. It
    differs from a turnkey project in that ESCOs typically work under
    performance contracts, meaning they are paid based on how well the
    project performs. Usually this is through energy savings, but it
    could also be based on the amount of power generated or system
    reliability. ESCOs also often provide at least part of the project
    financing, which can be very helpful for organizations--such as
    government agencies--that have very limited capital budgets.

#### Vendor Selection

It is generally a good idea to get more than one bid, so the first step
is to identify several potential vendors for your project. The web sites
for the major trade groups in this area--the Solar Energy Industries
Association and the American Wind Energy Association--provide
information about their members' expertise and interests. The appendix
on Resources for Further Research provides additional information
sources in this area.

Some factors to consider in selecting a provider of on-site generation
include the following:

-   **Experience**

> The vendor's experience and familiarity with the type of system you
> are considering is extremely important. You should also assess their
> experience with interconnection issues (if your system will be
> connected to the grid). A quick way to judge their experience is the
> length of time the vendor has been in business and the number of
> similar systems they have installed

-   **Licenses and certification**

> To be eligible for state incentives, some states require that
> installation be performed by licensed contractors, while other states
> certify installers that have received relevant training. As with any
> other capital project, licenses and certification are one indicator of
> a contractor's qualifications.

-   **Performance history**

> It is very important to check references from previous customers,
> preferably for systems similar to the one you are considering. As a
> final step, find out if there are any judgments or liens against the
> vendor organization, which would indicate problems with previous
> projects.

-   **Liability and professional insurance**

### 7.4 Address Potential Barriers

In implementing a renewable generation project, you will need to work
with various entities to obtain permits, connect to the utility system,
and perform other activities external to your facility. Some of these
steps will require more time, effort, or money than originally
anticipated, and may pose barriers that must be overcome.

Generally these barriers fall into two categories: technical and
regulatory. Technical barriers have mainly to do with your local
utility's electrical interconnection requirements. Other technical
barriers include fuel availability and storage; space limitations; power
quality impacts; fire, safety, and zoning requirements; and operations
and maintenance issues. Regulatory barriers have mainly to do with
permits and approvals that are required for your project. These can
include air emissions permits, utility standby charges, exit fees,
regional transmission charges, and land-use permits.

It is often possible to have the contractor developing your project be
responsible for addressing these barriers as they arise. If you expect
this to be the case, you should explore this with them as you are
writing the RFP and reviewing their proposals. The FEMP guide to
distributed energy resources offers many tips for overcoming these
barriers that may arise as you implement your renewable power project.

### 7.5 Install and Operate Your On-Site Renewable Generation System

Once your on-site generation system is designed, it is time to put the
contracts in place and begin construction. As with any capital project,
it is important to stay involved in the construction process to overcome
obstacles and solve problems as they arise.

When construction is complete, it is important to calculate and verify
the energy performance of the system, in order to prove the success of
the project. Did everything work as planned? What is the actual energy
production of the system? If not as estimated, what can be done to
improve the system's performance? Information about system performance
is very useful in communicating the benefits of your project to internal
and external audiences.

Measurement and validation generally proceed in two steps. The first is
post-construction evaluation (or commissioning), in which a contractor's
work is inspected and the system tested to make sure it meets regulatory
and design specifications. The second step includes monitoring and
verifying the performance of the system over a longer period, such as
the first year of operation. It is important to plan for this stage from
the early phases of your project, in order to design the system to
collect useful and valid data.

Finally, all renewable power systems require periodic maintenance in
order to perform as intended. You will need to decide whether you have
the staff expertise and time to do this, or whether you should contract
with the equipment vendor or a service company to maintain the system.

## 8.0 Capturing the Benefits of the Purchase

After successfully completing a green power purchase or installation,
your company or organization should consider taking advantage of several
additional promotional opportunities. Through the implementation of
promotional strategies and marketing plans, your green power purchase
can generate measurable, positive publicity and public relations
benefits within your organization and externally. To generate the most
positive publicity, your green power purchase should be part of your
organization's comprehensive environmental management efforts. Be
careful not to "oversell" your organization's achievements; you can
damage your environmental reputation if the reality of your actions does
not live up to the message you communicate.

### 8.1 Quantify the Environmental Benefits

In communicating the benefits of your green power purchase, it is
important to know the magnitude of emissions avoided. These emissions
can be greenhouse gases (GHGs), primarily carbon dioxide, as well as
other significant pollutants, such as sulfur dioxide, nitrogen oxides,
and mercury, that affect the environment and human health. A buyer of
green power can calculate these emissions reductions and count them
towards an environmental or energy goal. The EPA Green Power Partnership
offers an online tool to assist with these calculations
(<http://www.epa.gov/cleanenergy/powerprofiler.htm>).

For GHGs in particular, because of the concern about climate change,
many organizations are now developing a GHG emissions inventory. An
inventory is a tool for measuring, recording and tracking an entity's
total GHG emissions over time. An inventory can be developed by many
types of entities, including all types of companies, organizations,
municipalities and government agencies, even an individual household. A
GHG inventory is a detailed list of emissions by source and by type of
greenhouse gas, usually expressed in "metric tonnes of carbon dioxide
equivalent (CO~2~e)". An inventory serves a variety of purposes,
including: identifying reduction opportunities and managing GHGs;
participating in public reporting and voluntary reduction initiatives;
participating in mandatory government reporting programs; trading in GHG
emissions markets; and providing recognition for early voluntary action.
Using an inventory to record changes in GHG emissions sets the
foundation for companies, organizations and others to benefit from
purchasing green power in future climate change policy frameworks.

The following steps are needed to build a comprehensive inventory. For
more information, see Appendix F.

1.  Adopt and apply GHG accounting principles: relevance, completeness,
    consistency, transparency and accuracy.

2.  Define the organizational boundaries of the inventory.

3.  Define the operational boundaries of the inventory.

4.  Gather relevant data and calculate GHG emissions.

5.  Track performance over time.

6.  Report.

7.  Independently verify.

### 8.2 Internal Promotion

As mentioned earlier, one of the benefits of purchasing green power is
the improvement it can cause in employee morale. To capitalize on this,
companies and organizations often choose to promote their purchase or
installation internally, within their retail outlet, offices and with
their employees. Below are various ways for internal promotion:

-   **Develop Internal Publications with "Energy News."** Internal
    publications can be valuable tools to communicate information to the
    your organization's employee audience, which in turn helps support
    your organization's mission, growth and development. Circulate a
    newsletter or regular publication to company employees, stakeholders
    and affiliates that highlights information about your green power
    purchase and other ways that your organization is helping to address
    contemporary energy issues. This can help engage your employees in
    your new commitment and position your organization around
    environmental issues as a cutting edge business that cares about the
    environment. This newsletter can also serve as an outlet to
    congratulate employees who have also purchased green power and
    increase rapport and company loyalty.

-   **Establish a Staff Adoption & Recognition Program.** Encourage
    employees to purchase green power through the development of an
    organization-wide program that creates incentives, set milestones
    for staff purchases over time, and recognizes individual
    achievement. Distribute easy, one-page directions to help your
    employees purchase green power. This program can help your employees
    make an easy commitment to the environment, and enhance their
    affinity with the organization.

-   **Train Staff to Promote Your Organization's Purchase.** Provide
    your employees with information on the benefits of renewable energy
    and the details of your organization's purchase. Train your staff on
    the best ways to highlight your purchase to customers in daily sales
    interactions, and equip them with straightforward responses to
    general public questions. Be sure to include simple informational
    materials in "Question & Answer" format, with toll-free numbers and
    web sites to reference, for efficient understanding and
    communication. Example messages that you might offer:

    -   "Renewable energy helps reduce air pollution and global warming"

    -   "Here is a card that explains the easy steps to purchase to
        green power, with a toll-free number you can call for more
        information"

### 8.3 External Promotion

Utilizing external public relations to maximize the publicity
surrounding your green power purchase and to spread the message to the
public over time, allows your organization to attach itself to an
important emerging issue, and to position itself favorably in the news
and public eye. In addition to the public relations benefits, your
purchase can actually leverage additional purchases by the general
public, your customers, and your affiliates, thereby magnifying the
impact of your initial purchase.

-   **Construct a Public Relations Plan**. Adopt an integrated plan to
    publicize your purchase or installation to target audiences. The
    plan should include strategies for using existing distribution
    channels such as email, web sites, and the press to communicate new
    messages about your organization and its commitment to renewable
    energy. Create special collateral material and press releases to
    distribute, and conduct email campaigns. Retail companies can also
    circulate special offers and coupons, and host events--such as
    renewable energy celebrations--at stores to attract new customers
    and communicate the benefits of your green power purchase.

-   **Utilize Media Contacts and Press.** Write a press release on your
    purchase and circulate it to local and national media outlets.
    Research and contact your local environmental writers and
    publications and encourage feature stories on your company and its
    environmental commitment. Reposition your organization in the news
    as an environmental leader and increase your brand recognition.
    Solicit quotes from environmental groups and green power promotion
    organizations.

-   **Take Advantage of All Opportunities to Promote your Purchase.**
    Use strategic business engagements and speaking events as well as
    your existing points of interaction with the public, to talk about
    your environmental commitment and promote your purchase of green
    power.

    -   Market your purchase on your products themselves by creating
        special messages such as "this product was created with the
        support of GREEN POWER,"

    -   Have materials at your conference and trade-show tables,

    -   Feature table top display information and signage in your
        facilities-"We Purchase Green Power,"

    -   Make available the "easy purchase cards" explaining the steps to
        choosing green power,

    -   Post energy facts such as the number of adopters in the US and
        your state, to show that your organization is a leader of a real
        trend,

    -   Encourage your company's suppliers and affiliates to follow your
        lead and purchase green power.

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-   **Seek Public Endorsements from Environmental Groups**. Capitalize
    on public distribution channels of environmental organizations that
    promote renewable energy and highlight environmental commitment. The
    organizations sponsoring this guidebook all assist their partners
    and companies to publicize their achievements in purchasing green
    power. If you are a member of the EPA Green Power Partnership or
    purchase Green-e certified products, you can also use these logos in
    your promotional activities.

-   **Create Co-Marketing Partnerships with Your Green Power Provider.**
    Provide your retail customers with opportunities for easy in-store
    sign-up for green power. Reward these customers with benefits such
    as gift or discount cards, merchandise, or collateral products (e.g.
    t-shirts, hats, etc.) that promote your company's image as an
    environmental leader.

-   **Join a Greenhouse Gas Registry.** Once you have quantified the
    emissions reductions from your purchase, you may wish to record that
    information in an official registry with a government agency. These
    registries can help ensure that your investments in green power will
    be recognized for compliance with future GHG emissions regulations.
    Several registry programs have already been developed, including the
    California Climate Action Registry, Wisconsin's Voluntary Emissions
    Reduction Registry, New Hampshire's Voluntary GHG Reductions
    Registry, and the U.S. Department of Energy's 1605b Voluntary
    Greenhouse Gas Reporting program. A regional GHG registry for
    Northeastern states is also in discussion.

## 9.0 Summary and Conclusion

The benefits of green power are enormous, and large purchasers of
electricity can have a significant impact on the way that power is
produced now and in the future. Businesses, governments, and non-profits
have an unprecedented and increasing range of options for purchasing
green power. In those states that have restructured their electricity
markets, retail access allows customers to choose their electricity
supplier and, by extension, how their electricity is produced. In
regulated markets, utility green pricing programs enable customers to
support the addition of renewable energy to the grid without leaving
their incumbent utility. Tradable renewable certificates and on-site
renewable generation allow organizations everywhere to achieve the
benefits of green power. Acting in your organization's -- and society's
-- best interests, you can take advantage of the strategies outlined in
this guidebook to help move the United States towards a more sustainable
energy future.

# Appendix A: Sponsoring Organizations

For more information contact the following organizations:

## U.S. Department of Energy

-   Federal Energy Management Program (FEMP)

<http://www.eren.doe.gov/femp/> or

[http://www.eere.energy.gov/femp/utility/purchasing_repower.html](http://www.eren.doe.gov/femp/utility/renew_power_purchase.html)

-   Green Power Network

<http://www.eren.doe.gov/greenpower>/

-   Department of Energy Distributed Power site

http://eren.doe.gov.distributedpower/

-   FEMP Renewable Power Procurement Guide for Government Agencies

<http://www.eren.doe.gov/femp/techassist/der_resources.html>

## U.S. Environmental Protection Agency

-   Green Power Partnership

http://[www.epa.gov/greenpower](http://www.epa.gov/greenpower)/

-   Energy Star

http://www.energystar.gov/

## World Resources Institute

-   Green Power Market Development Group

http://www.thegreenpowergroup.org/

## Center for Resource Solutions

-   Green-e Program

http://www.green-e.org/

-   Related Clean Energy Programs

    http://www.resource-solutions.org

# Appendix B: Green Power Procurement and Information Resources for Federal Agencies

Purchasing green power is all about making a difference by changing the
way we select basic commodities. For the federal government, the largest
consumer of electricity in the U.S. with an annual electricity bill of
approximately \$3.5 billion, the ability to make a difference is
enormous. This appendix discusses purchasing issues and considerations
that are unique to Federal agencies.

When green power first became available, there was widespread
uncertainty among Federal agencies about whether or not the purchase of
renewable energy was within their authority in the first place. Given
long-standing requirements that Federal agencies contract for goods and
services almost exclusively on a least-cost basis, many purchasing
managers were reluctant to pursue renewable energy purchase
opportunities.

This uncertainty has largely been dispelled for several reasons. First,
Executive Order 13123 (see Text Box B-1) clarifies the Federal
government's interest in renewable energy, by directing agencies to
"strive to expand the use of renewable energy within its facilities and
in its activities by ... purchasing electricity from renewable energy
sources." Second, as directed by Executive Order 13123, the Secretary of
Energy set a goal for the Federal Government to have the equivalent of
2.5 percent of facilities' electricity consumption come from new
renewable energy sources by 2005.[^1] Finally, the authority for
purchasing renewable energy has been incorporated into the Federal
Acquisition Regulation (FAR, subpart 23.2), carrying the force of law
(see <http://www.arnet.gov/far/>).

As a result of these developments, a number of agencies have
successfully completed procurements of green power in most regions
around the country, as summarized in Table B-1. The discussion within
the Federal government has changed from whether or not Federal
purchasers have the authority to purchase green power, to finding the
best way to achieve the 2.5% purchase goal. This goal will not be an
easy one to achieve. Although the purchases summarized in Table B-1 are
a significant step forward, they still only represent about one-fifth of
the renewable energy needed to achieve the 2005 goal (based on 1998
Federal kWh consumption data).[^2] By reading this guidebook and taking
advantage of the technical support provided by DOE's Federal Energy
Management Program (FEMP), you are taking an important step in helping
the Federal government achieve its green power purchase goals.

The remainder of this appendix provides an overview of green-power
issues and considerations that are unique to Federal agencies, including
several strategies for procuring green power. Agencies that are
interested only in participating in procurements run by the General
Services Administration (GSA) or the Defense Energy Services Center
(DESC) can turn directly to the section about Procurement Approaches in
this appendix.

\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\--

**[Text Box B-1]{.underline}**

**[Executive Order 13123]{.underline}**

Sec. 204. Renewable Energy. Each agency shall strive to expand the use
of renewable energy within its facilities and in its activities by
implementing renewable energy projects and by purchasing electricity
from renewable energy sources.

Sec. 301. Annual Budget Submission. Each agency's budget submission to
OMB shall specifically request funding necessary to achieve the goals of
this order.

Sec. 404. Electricity Use. To advance the greenhouse gas and renewable
energy goals of this order, and reduce source energy use, each agency
shall strive to use electricity from clean, efficient, and renewable
energy sources.

(a) Competitive Power. Agencies shall take advantage of competitive
    opportunities in the electricity and natural gas markets to reduce
    costs and enhance services\...

(b) Reduced Greenhouse Gas Intensity of Electric Power\....Agencies
    shall consider the greenhouse gas intensity of the source of the
    electricity and strive to minimize the greenhouse gas intensity of
    purchased electricity.

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```
(c) Purchasing Electricity from Renewable Energy Sources.

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(1) Each agency shall evaluate its current use of electricity from
    renewable energy sources and report this level in its annual report
    to the President. Based on this review, each agency should adopt
    policies and pursue projects that increase the use of such
    electricity. Agencies should include provisions for the purchase of
    electricity from renewable energy sources as a component of their
    requests for bids whenever procuring electricity. Agencies may use
    savings from energy efficiency projects to pay additional
    incremental costs of electricity from renewable energy sources.

Sec. 406(c) Retention of Savings and Rebates. Agencies granted statutory
authority to retain a portion of savings generated from efficient energy
and water management are encouraged to permit the retention of the
savings at the facility or site where the savings occur to provide
greater incentive for that facility and its site managers to undertake
more energy management initiatives, invest in renewable energy systems,
and purchase electricity from renewable energy sources.

Sec. 605. Amendments to Federal Regulations. The Federal Acquisition
Regulation and other Federal regulations shall be amended to reflect
changes made by this order, including an amendment to facilitate agency
purchases of electricity from renewable energy sources.

\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\--

**Table B-1: Federal Renewable Electricity Purchase Contracts**

  ----------------------------------- -----------------------------------
  **Agency**                          **Million kWh/Year**

  USDA                                4.8

  BPA                                 0.6

  DOD^1^                              185.0

  DOE                                 21.5

  EPA                                 37.4

  FAA                                 0.1

  GSA                                 27.1

  NASA                                10.0

  NIST                                0.9

  NPS                                 0.02

  World Bank                          5.5

  U.S. Mint                           1.2

  Total                               294.1
  ----------------------------------- -----------------------------------

Notes:

1\) DOD total does not include a \"contribution\" purchase for Fort
Lewis, WA.

2\) Denver wind purchases have been counted under the agency that
contracted for the purchase.

3\) Quantities above are current as of August 2003. They do not include
on-site renewable generation or purchases of tradable renewable
certificates.

Source: DOE/FEMP.
<http://www.eere.energy.gov/femp/utility/docs/renewable_purchases.xls>

## Federal Definitions of Renewable Energy

In addition to the definitions of renewable energy outlined elsewhere in
this guide, Federal agencies may need to pay particular attention to
definitions expressed in an Executive Order and Federal law:

-   Executive Order 13123 (Section 710) and the FAR (subpart 2.1) define
    renewable energy as "energy produced by solar, wind, geothermal, and
    biomass power".

1.  In addition to solar, wind, geothermal, and biomass, the Public
    Utilities Regulatory Policy Act (PURPA) of 1978 included hydropower
    facilities of less than 30 MW capacity and other resources such as
    municipal solid waste in defining renewable energy.

## Federal Motivations For Green Power Purchases

Due to the large volume of electricity consumed by the Federal
government, even small additions of green power can have a large benefit
for the environment and the overall green power market. Green power
purchases by Federal agencies provide the following benefits that are
unique to Federal customers.

Benefits accruing directly to a Federal agency from a renewable energy
purchase include:

-   **Compliance with Federal goals.** EO 13123, and the resulting
    Federal renewable energy directive, include three energy management
    goals: energy conservation, greenhouse gas reduction, and use of
    renewable energy. Purchasing green power or installing on-site
    generation can help an agency meet all three of these goals.

3.  **Increased visibility.** Presidential awards are conferred upon
    those agency energy management teams that strive to comply with
    EO 13123. Energy scorecards for each agency are tallied to gauge the
    degree of compliance.

4.  **Accomplishment of an agency's organizational mission.** Many in
    the Federal government understand the overall mission of the
    government to include a commitment to environmental protection.
    Beyond that general obligation, individual agencies, such as the
    EPA, have the specific mission of protecting the environment.
    Renewable energy purchases are one way to work toward both goals.

-   **Demonstrate responsiveness and leadership.** The purchase of
    renewable energy represents a clear demonstration of the agency's
    responsiveness to its customers (or citizens), the majority of whom,
    according to multiple surveys, favor renewable energy.[^3] The
    Federal government has shown that it can be a leader in the area of
    green power and renewable energy.

Social benefits of Federal purchases include the following:

-   **National security**. National security is one of the principal
    responsibilities of the Federal government. By purchasing
    domestically produced renewable energy, *all* Federal agencies can
    contribute to our nation's energy security. Because of the special
    role of government facilities in our national security, the use of
    distributed, on-site power generation resources at these facilities
    enhances their ability to perform their mission, thus improving our
    overall security.

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-   **Market transformation.** Given the size of the Federal
    government's utility bill, significant purchases of green power by
    Federal agencies could stimulate the overall green power market.
    Strong Federal demand will demonstrate that switching to renewable
    energy is a national priority, will call attention to societal and
    customer benefits, and may contribute to reductions in product
    costs. The size of the Federal government amplifies these benefits
    that result from any purchase of green power.

## Sources of and Limits to the Federal Authority to Purchase Green Power

[]{#__RefHeading___Toc460653617 .anchor}

### Executive Order 13123

On June 3, 1999, President Clinton issued "Executive Order 13123 --
Greening the Government Through Efficient Energy Management". This order
directs Federal agencies to "expand the use of renewable energy within
its facilities and in its activities by implementing renewable energy
projects and by purchasing electricity from renewable energy
sources."[^4] Agencies are encouraged to take advantage of competitive
power opportunities to fulfill the order's goals, and should "include
provisions for the purchase of electricity from renewable energy sources
as a component of their requests for bids whenever procuring
electricity."[^5] Perhaps most empowering, E.O. 13123 gives agencies the
authority to request funding from the Office of Management and Budget
for the purpose of achieving the order's objectives (see Text Box B-1).

### FAR Part 23

FAR Part 23 seeks to minimize the environmental impacts of federal
purchases. Subpart 23.2 addresses energy and water efficiency and
renewable energy, and has been modified to incorporate much of Executive
Order 13123. This subpart states "The Government\'s policy is to acquire
supplies and services that promote energy and water efficiency, advance
the use of renewable energy products, and help foster markets for
emerging technologies." Subpart 23.7 directs agencies to contract for
environmentally preferable and energy-efficient products and services.
"Environmentally preferable" is defined by FAR Subpart 2.101 to mean
"products or services that have a lesser or reduced effect on human
health and the environment when compared with competing products or
services that serve the same purpose.[^6] This comparison may consider
raw materials acquisition, production, manufacturing, packaging,
distribution, reuse, operation, maintenance, or disposal of the product
or service."

### Cost Minimization

The FAR has traditionally focused on minimizing the government's costs
by strongly favoring the procurement of least-cost goods and services.
This policy often left contracting officers with little leeway to make
value-added decisions. The procurement reform of the 1990s, however, has
more closely aligned federal acquisition procedures with commercial
sector practices through a stated preference for commercial products and
the adoption of commercial business practices. In addition, the
traditional focus on least cost procurement has shifted to one of
obtaining the best value.[^7]

### Best Value

In determining best value, contracting officers can consider an array of
other factors, besides least cost, including environmental and energy
efficiency considerations.[^8] As formally defined in the FAR, best
value means "the expected outcome of an acquisition that, in the
Government's estimation, provides the greatest overall benefit in
response to the requirement."[^9]

### Specification of Requirements

Part 11 of the FAR -- "Describing Agency Needs" -- states that
environmental objectives, including the purchase of products and
services that utilize renewable energy technologies, must be considered
when specifying requirements.[^10] Requirements for renewable energy
should be specific enough to limit the number of factors to be evaluated
among competing offers, but general enough so as not to jeopardize the
product's status as a "commercial item".[^11]

### Commercial Items

In restructured electricity markets, the most direct path to a renewable
energy purchase is to make use of the "commercial items" provisions in
FAR Part 12. Commercial items are broadly defined as goods and services
sold competitively in the commercial marketplace in substantial
quantities.[^12] Since an active competitive market reduces procurement
risks, agencies are strongly encouraged to favor the purchase of
commercial items \-- both through specific language to that effect and
authorization to use less stringent acquisition procedures.[^13]

With large volumes being commercially traded in public markets each day,
electricity is undisputed as a standard commercial item. As a specific
type of electricity, renewable energy's status as a commercial item is
slightly less definitive. Support for such a designation is aided by the
ongoing development of active renewable energy exchanges where
commercial entities buy and sell renewable energy in large
quantities.[^14] In addition, certification efforts by state and
non-governmental organizations such as Green-e help to establish
renewable energy as a commercial item by establishing a brand name
(e.g., "Green-e certified renewable energy"). Green-e certification
provides additional value to the federal government because of other
functions such as verification and tracking, auditing, and establishing
a code of supplier ethics. As an example, the GSA used the commercial
item designation in the EPA Richmond purchase, specifying Green-e
certified power (see Text Box B-2).

Even in the absence of an active renewable energy market, agencies could
specify a requirement for electricity (the standard commercial item)
generated from renewable resources (a specification in addition to the
standard commercial item). In most cases, the favorable contracting
procedures afforded commercial items would still be applicable.[^15]

As renewable energy requirement specifications become more and more
specific, however, the ability to claim commercial item status grows
weaker. While the boundary between what is and is not considered a
commercial item will no doubt be highly case-specific, in general an
agency should be wary of specifying any requirement beyond what is
currently commercially available. The use of legislative or Green-e
definitions of renewable energy or green power also provides
justification for a claim of commercial item status.

### Federal Experience with Purchasing Green Power 

As shown in Table B-1, there have been many successful purchases of
green power by Federal agencies. These examples provide ample evidence
that federal procurement officers have the necessary authority to
purchase renewable energy.

### Innovative Purchase Opportunities

While green power procurement has become common enough that it is
generally not "innovative," there may still be situations in which the
methods outlined above do not apply. In these cases, innovative methods
are needed to implement a purchase. Federal contracting officers wishing
to pursue innovative purchase opportunities have historically referenced
the FAR and other regulations for specific authorization to do so. The
Federal Acquisition Streamlining Act of 1994 and the Federal Acquisition
Reform Act of 1996 addressed this predicament by encouraging contracting
officers to take initiative and pursue opportunities they believe to be
in the best interests of the government.[^16]

## Procurement Approaches

### Fully-Regulated Markets 

Where retail competition is not available, Federal agencies may be able
to purchase green power through a green pricing program offered by their
local utility or through tradable renewable certificates. If the utility
offers a green pricing program, agencies should find out the specific
enrollment or sign-up procedures. If a GSA area-wide contract is already
in place with this utility, completion of documents for both the
specific program and for use of the area-wide contract may be necessary.
In the case of utility green pricing programs, no solicitation is
required, since the utility serving the agency remains the same (see
Text Box B-4).

### Restructured/Competitive Markets

In a competitive market, agencies must use competitive acquisition
procedures to "shop" for renewable energy from a variety of providers.
Since an agency will be evaluating competing offers, normal solicitation
procedures must be followed. Federal agencies can take two solicitation
approaches -- making use of designated contracting agencies, such as the
GSA or the Defense Energy Support Center (DESC), or serving as the
contracting agency themselves. While serving as the contracting agency
offers increased control and flexibility, the designated contracting
agencies have developed significant expertise in the area of competitive
electricity power procurement, including renewables (Text Boxes B-2, B-3
and B-5 offer examples of federal purchases in restructured markets
utilizing designated contracting agencies).

### Using GSA or DESC

#### GSA Power Procurement Services

GSA has been active in assisting other Federal Agencies in the
procurement of renewable energy or green power (see Text Boxes B-2, B-3,
B-4 and B-5). In addition to the successful procurements already
completed, GSA is developing the expertise to meet specific price
targets by "mixing and matching" various forms of conventional and
renewable generation. GSA believes that by packaging the electrical
requirements of extremely large and similar electric loads utilizing a
cohesive and intelligent strategy, the government can reap the benefits
of the economies of scale involved in a mass procurement.

But the GSA strategy is not limited to the simple aggregation of the
electrical loads of Federal agencies. GSA recognizes that there are
facilities within the Federal community that use large amounts of
electricity in a manner that is looked upon favorably by the energy
service providers that are competing in the restructured electricity
markets. For these customers, GSA seeks specific prices for those
facilities and works with the facility managers to develop strategies
that will result in lower long-term electricity prices in the
restructured marketplace. The GSA recognizes the important challenge of
providing electricity to the Federal community at reasonable prices,
while at the same time protecting the environment for future
generations. As a result of their efforts thus far, GSA is making
significant progress toward the availability of renewable energy at
little or no price premium (for more information about GSA's policies
for purchasing renewables, visit <http://www.gsa.gov/> and search for
"green power").

One of the easiest ways for Federal agencies to purchase green power is
through the GSA's Federal Supply Schedules (FSS). Procurement reform has
prompted an overhaul of FSS, transforming them into a useful tool not
only for smaller, generic purchases, but also for large-dollar-volume,
agency-wide services.

Green power and renewable energy have been added to the Federal Supply
Schedule under three different Special Item Numbers (SINs). SIN 871-204
addresses "Managing the Procurement and use of Electricity," which
includes electricity from both renewable and non-renewable sources. SIN
871-205 addresses "Managing The Procurement And Use Of Energy From
Renewable Sources." SIN 871-203 addresses "Managing the Procurement and
Use of Natural Gas" which includes gas from both renewable and
non-renewable sources. The latter category would be applicable to
on-site generation resources that use renewably generated methane gas
(such as landfill gas).

There are several features of supply schedules that make them
particularly well suited to serve the needs of those purchasing
electricity in a restructured market:

• Multiple award schedules (MAS) list competing contractors offering
comparable products and services. MAS contracts are awarded to all
companies offering commercial items whose price has been determined to
be fair by the GSA. The use of MAS is considered a competitive
procedure, under FAR 6.102(d)(3).

• Maximum order limitations have been removed, and replaced with maximum
order thresholds, beyond which an agency is required to seek a price
reduction from the contractor.[^17]

• MAS contracts are priced on a most-favored commercial customer basis,
and a price reduction clause requires the contractor to lower the
agency's price in lock step with any corresponding price reductions to
its most-favored commercial customer.

For the latest information on Federal Supply Schedules, go to
[www.gsa.gov](http://www.gsa.gov/) and search for "Energy Services
Schedule." For details on the schedules described above, go to
<http://www.gsaelibrary.gsa.gov/> and search for the special item
numbers listed above.

#### DESC Power Procurement Services

Under the DESC Electricity Program, solicitations are issued as states
are restructured and periodically thereafter (based on the contract
length). When multiple states permitting competition are located within
(completely or partially) the boundaries of a power pool, NERC region or
Independent System Operator, requirements within these states are
solicited simultaneously. While a majority of the requirements contained
in DESC electricity solicitations are DoD accounts, Federal civilian
activities may participate as well (as is the case in the DoD natural
gas program). Whenever DESC issues a solicitation to purchase
electricity, it also \"requests\" offers of green power.

To date, DESC has engaged the market in the following states: Rhode
Island, California, New York, Pennsylvania, Illinois, New Jersey,
Connecticut, Texas, Maine, the District of Columbia, and Maryland.
Renewable power has been offered in Pennsylvania, Illinois, Texas, the
District of Columbia, and Maryland. Awards have been made in Texas and
from the PJM (Pennsylvania, New Jersey, Maryland) exchange. DESC intends
issue new solicitations in states that restructure their electricity
markets in the future.

All procurements are done on a best value basis. Line items are
established for each individual activity, usually for each metered
account. Terms and conditions within a given solicitation can be
tailored to the needs of individual activities through the use of
"flexible aggregation," which can include flexible pricing mechanisms
and contract performance periods. Offerors are not mandated to offer on
every line item of government-created aggregates, but instead have the
opportunity to offer on individual line items within the solicitation,
create and offer on "all-or-none aggregates," or do both. DESC believes
that this approach allows the market to identify if synergies exist by
aggregating line items together into one or more groups. Each offered
price is compared to the Default Service Tariff (DST) of the applicable
utility. An award is made when cost avoidance can be determined for each
line item, unless the requiring activity has a different objective, such
as stable prices in a market where the utility tariff is based on a
market index, or the purchase of green power.

The DESC Electricity Program offers a variety of pricing options,
performance periods and billing options that can be tailored to market
conditions and individual needs. The objective of the program is to
minimize the amount of effort required at the level of the requiring
activity. DESC contract support is cradle to grave, from the
identification of requirements through award and contract
administration.

### Agency Procurement

If an agency does not deem it advantageous to request assistance from
the GSA or DESC, it may contract separately for electric service. In
this case, the purchase must meet the requirements of FAR Part 12 as
described in the section on \"Commercial Items\" above (See Text Box B-6
for an example of a federal purchase of green power in a competitive
market completed by an agency's procurement officers).

### WAPA Green Power Products

The Western Area Power Administration (WAPA) offers a variety of green
power products for Federal agencies. Facilities located in WAPA's
15-state western service territory can purchase renewable electricity
directly from WAPA, even if they are not currently WAPA customers.
Existing customers of WAPA can also supplement their current purchases
with renewable electricity. Finally, regardless of location, Federal
agencies can purchase tradable renewable certificates from WAPA. For
more information about these programs, see the WAPA web site at
<http://www.wapa.gov/powerm/pmrenpro.htm>.

### TVA Green Power Product

The Tennessee Valley Authority now offers a program for Federal agencies
to purchase green power. For more information, see http://....

## Federal Assistance for On-Site Renewable Generation Projects

As mentioned earlier, on-site generation projects tend to be more
complex than power purchases, which is a significant barrier to their
implementation. To help agencies overcome this barrier, and help tap the
renewable resources that are available at Federal facilities, FEMP
offers several programs to assist Federal agencies with on-site
generation projects.

### Renewable Resource Assessment

To help facility managers assess the quality of renewable energy
resources at their location, FEMP is working with resource assessment
specialists to develop renewable resource maps for several different
renewable energy technologies. These maps are available on the FEMP web
site.

The maps show where each renewable technology is cost-effective for
Federal facilities under differing assumptions about electricity prices
and renewable system prices. For example, the maps for solar water
heating indicate that more than 60% of the Federal facilities in the
nation could install a cost-effective solar system right now; the
calculated savings-to-investment ratio is 1 or higher for these
facilities. At electric utility rates of \$0.10/kWh or more, however,
solar water heating systems would be cost-effective for almost any kind
of Federal facility.

### Design Assistance and Training

FEMP can also provide design assistance for renewable energy projects,
especially those designated as Federal Energy Saver Showcases. Design
assistance can include plan and specification review, development of
product specifications, system sizing, and project costing guidelines.
Some services are available on a for-fee basis.

FEMP also offers two renewable-energy training courses that can help you
get started:

-   \"Implementing Renewable Energy Projects" is an overview of the
    technologies, covering costs and other factors to consider in
    selecting a system.

-   "Design Strategies for Low-Energy, Sustainable, Secure Buildings"
    focuses on whole-building designs that integrate daylighting,
    energy-efficient equipment, and passive solar strategies for new
    Federal buildings.

### Funding Assistance

Financing can be a problem when appropriations for new projects are
limited. FEMP announces a Call for Projects once a year, in which
Federal agencies participate in a competitive selection process for
technical assistance on their renewable energy projects. This funding is
not for system purchases, but FEMP does help selected project teams
acquire additional project financing, if needed.

In the annual Distributed Energy Resources (DER) Call for Projects, FEMP
offers funds for system hardware as well as technical assistance. Both
on-grid and off-grid renewable energy systems qualify as DER
technologies.

Agencies can also participate in FEMP's Energy Savings Performance
Contracts (ESPCs) and Utility Energy Services Contracts (UESCs), which
are allowed under the Energy Policy Act of 1992. Through an ESPC, the
contractor pays the up-front costs of an energy efficiency or renewable
energy project and is repaid over the term of the contract from the
agency's guaranteed energy cost savings. FEMP's technology-specific
Super ESPCs help agencies obtain financing for biofuels, geothermal heat
pumps, parabolic-trough solar collectors, and PV systems. Through UESCs,
FEMP helps agencies and utility companies engage in a similar
contracting process to save both energy and dollars.

### Facilitated Projects 

FEMP also encourages agencies to facilitate large projects that serve
the needs of Federal agency customers, and count toward the Federal
renewable energy goal. An example is a large renewable energy project on
the tribal land of Native Americans served by the Bureau of Indian
Affairs. Currently, only 2 GWh of facilitated renewable energy projects
are in place in the Federal government, while about 740 GWh are pending.

If your facility is in a western state, you may contact the Bureau of
Land Management (BLM) about opportunities to collaborate on a
facilitated renewable energy project on Federal land. FEMP and BLM
recently identified Federal lands that have the best potential for
renewable energy projects (this study is available from the FEMP web
site). Because these projects are usually much larger than on-site
projects, their contribution to the Federal goal could be significant.

## Key Elements of a Successful Procurement Process

Based on several years of experience with buying green power, certain
lessons for Federal agencies have emerged. Not all of these lessons will
apply to your situation, but they are worth keeping in mind as your
green power purchase proceeds.

### Load aggregation

Combining several facilities into one acquisition can lead to big
purchases, but it is best to target big users with these aggregation
efforts. Trying to aggregate many smaller users can take too much
effort. It is also best to keep the procurement simple.

### Stakeholder involvement

The green power advocate must get buy-in up-front from stakeholders such
as utilities and maintenance personnel, comptrollers, energy managers,
and the chain of command. The stakeholders must be involved in the
decision process and make reasoned, balanced decisions. It is important
to be honest and clear about the project's renewable sources and
benefits. A green power project should not be done because it is a neat
thing to do, but conversely, it should not be rejected simply because it
is different or new.

### Obtain agency electricity consumption data

An agency's electricity consumption data should be part of any RFP, and
is required by GSA when they are assisting in the procurement.

### Bundling for Cost Control

E.O. 13123 specifically encourages the use of savings from energy
efficiency to pay for renewable energy. This approach is made easier by
using ESPCs.

### Vendor relations

Utility green pricing should be seen as a partnership, in which the
utility and the Federal purchaser work together to develop a program
that meets both their needs. For all electricity suppliers, Federal
agencies should consider requesting a customized product, to take
advantage of large purchasing volumes.

## Capture the benefits of the purchase

After successfully completing a green power purchase, a Federal agency
will usually want to publicize their efforts. In addition to the
publicity messages that are available to other institutions, Federal
agencies can spread the word that the agency is working to meet its part
of the Federal renewable energy goal. Agencies with exemplary energy
management programs are eligible for FEMP awards that enhance an
agency's image both within and outside the government.

Federal agencies are required to provide annual reports on their
progress in meeting their energy management goals. FEMP has published
guidelines for counting green power purchases and on-site renewable
energy toward an agency's energy management goals
(http://www.eere.energy.gov/femp/resources/countguide.html).

##  Summary of Renewable Electricity Opportunities for the Federal Government

The benefits of renewable energy are enormous, and as the nation's
largest purchaser of electricity, the Federal government can have a
significant impact on the way that power is produced now and in the
future. Federal agencies have an unprecedented and increasing range of
options for purchasing renewable energy. Moreover, Executive Orders
direct Federal agencies to increase their use of renewable energy. With
increasing emphasis on "best value" purchasing and explicit
consideration of environmental characteristics, contracting officers now
have more authority than ever before to pursue purchases of renewable
energy. Acting in the government's -- and society's -- best interests,
contracting officers can take advantage of the strategies outlined in
this guidebook to help move the United States towards a more sustainable
energy future.

## Federal Resources for Green Power Information

For Federal agencies purchasing green power, assistance is available
from the following Federal agencies and National Labs:

DOE Regional Office FEMP representative:
(http://www.eren.doe.gov/femp/aboutfemp/fempcontacts.html#regional).

FEMP web sites:

Renewable energy:
(http://www.eere.energy.gov/femp/techassist/renewenergy.html)

Design assistance:
(http://www.eren.doe.gov/femp/techassist/designassist.html)

Training:
(http://www.eren.doe.gov/femp/resources/training/femptraining.html)

Financing: (http://www.eren.doe.gov/femp/financealt.html)

For Assistance with Program Resources:

Department of Energy -- Federal Energy Management Program

Anne Sprunt Crawley, 202-586-1505

David McAndrew, 202-586-7722

Defense Energy Support Center

John Nelson, 703-767-8669

For Assistance Issuing Solicitations:

General Services Administration

Lindsey Lee

Team Leader, Public Utilities Program

\(202\) 401-0174

Lindsey.lee@gsa.gov

Western Area Power Administration (supplier to Federal agencies)

<http://www.wapa.gov/powerm/pmrenpro.htm>

<corpcomm@wapa.gov>

\(720\) 962-7079

For Technical Assistance, including market intelligence, market rules
and development of requirements and statements of work, contact:

William Golove, Lawrence Berkeley National Laboratory,
<WHGolove@lbl.gov>, 510-486-5229

Chandra Shah, National Renewable Energy Laboratory,
<chandra_shah@nrel.gov>, 303-384-7557

For more information or assistance in developing a plan to enhance the
security of Federal facilities through renewable energy, contact:

John Thornton

Energy Assurance R&D Coordinator

homelandsecuritycoordinator@nrel.gov

\(303\) 384-6469

Dave Menicucci

Lead of the Defense Energy Support Program

dfmenic@sandia.gov

\(505\) 844-3077

## Federal Case Studies

# Appendix C: EPA Green Power Partnership

## What is the Green Power Partnership?

The U.S. Environmental Protection Agency's Green Power Partnership is a
voluntary program designed to reduce the environmental impact of
electricity generation and use by promoting renewable energy. The
Partnership aims to expand awareness of green power by providing
objective information and public recognition for those making it their
choice for energy supply. Organizations become Partners by committing to
procure an amount of green power that is proportional to their annual
electricity use. In return, EPA provides technical assistance and public
recognition.

## Who can participate?

Green Power Partners are commercial, industrial, and public sector
organizations that pledge to procure an amount of green power
proportional to their annual electricity use. Current participants
include Fortune 500 companies, other large and small businesses,
educational institutions, state and local government, federal agencies,
and non-profit organizations. All current Green Power Partners are
listed below.

Note: A name in *Italics* indicates the organization uses enough green
power to be in the Green Power Leadership Club. A name in ***Bold
Italics*** indicates the organization is a Founding Partner. An asterisk
indicates that the organization has been recognized with a Green Power
Leadership Award.

Fortune 500 Companies

3M / Research Boulevard Facility \*

***Advanced Micro Devices / Austin, TX Facilities***

Ford Motor Company / U.S. Manufacturing Facilities \*

General Motors / Service Parts Operations \*

***Johnson & Johnson / Select Facilities*** \*

Lowe's Home Centers in TVA Service Territory

Nike / U.S. Headquarters

Steelcase / Headquarters \*

Staples

Businesses

##### Affiliated Engineers / Corporate Headquarters 

##### Alterra Coffee Roasters 

Ashforth Pacific

Aspen Skiing Company

##### Austin Grill 

##### Batdorf & Bronson Coffee Roasters 

Better Brands

##### Blake\'s Auto Body of Rohnert Park, CA 

Boise Co-op

Burroughs & Chapin

Cascade Engineering / Michigan Facilities \*

##### Coldwell Banker Colorado Landmark Realtors 

Community Pharmacy Cooperative

##### Corporate Computer Centers 

DDC Engineers

Dimension-IV

##### Ecoprint 

##### Elfon 

Environmental Concepts

Fala DM Group

##### Farr Associates 

***Fetzer Vineyards*** \*

*Global Energy Concepts* \*

##### Green Mountain Coffee Roasters 

##### GreenWave Radio 

Hooper Construction

Interface Fabrics Group / Guilford, Saulter, Newport and East Douglas
facilities

Interface Flooring Systems / Troup County Facilities

The Joinery

***Kinko\'s*** \*

##### Lundberg Family Farms 

##### Merit Electric 

##### Meyer Associates 

Monsanto / Agracetus Campus

Mother Fool\'s Coffeehouse

Mother Nature\'s Diaper Service

Mt. Tam Racquet Club

##### Natsource 

*New Belgium Brewing* \*

##### New Leaf Paper 

##### Norm Thompson Outfitters 

##### Office of James M. Fico, PhD 

Orchids by the Ackers

Outpost Natural Foods Cooperative

##### Pinehurst Builders / Crossman Communities 

##### PowerLight 

##### RedJellyFish 

Renewaire

SBT Designs

##### Schott Applied Power 

Shaw's Supermarkets

##### Shuksan Energy Consulting 

Stoel Rives

Strang

The Joinery

##### Technology Transition Corporation 

##### Transcendentist

##### The Tower Companies 

##### The Trium Group 

Toyota Motor Sales / Headquarters South Campus

##### Uinta Brewing 

##### Vandewalle & Associates 

Waccamaw Land and Timber

##### White Wave 

##### Willapa Logging Company 

*Xantrex Technology* \*

##### Xenergy 

Higher Education

Bucknell University

Carnegie Mellon University \*

Catholic University

Coastal Carolina University

College of the Atlantic

*Connecticut College* \*

#### Pennsylvania State University

*University of Colorado / Student Union, Health and Recreation Centers*
\*

#### University of Pennsylvania 

University of Wisconsin -- Oshkosh / Main Campus

Cities

***City of Chicago, IL*** \*

City of Portland, OR

*City of Santa Monica, CA* \*

District of Columbia / Reeves Center and two public schools

##### Los Angeles World Airports, CA 

##### Village of Mackinaw City, MI 

Counties

Arlington County, VA

Berkeley County Chamber of Commerce, SC

Clark County, WA

***County of Alameda, CA / GSA Facilities***

Lake County Public Building Commission, IL

Lake County Waste Water Treatment, IL

Montgomery County, MD

##### Oroville Region Sewerage Commission, CA 

States

State of Illinois

State of Maryland

***State of New Jersey***

State of Utah / Energy Office

Federal Agencies

NASA / Johnson Space Center

U.S. Air Force / Cannon Air Force Base

U.S. Air Force / Dyess Air Force Base

U.S. Air Force / Ellsworth Air Force Base

U.S. Air Force / Fairchild Air Force Base

U.S. Air Force / Laughlin Air Force Base

U.S. Air Force / Minot Air Force Base

U.S. Air Force / Sheppard Air Force Base

U.S. Army / Walter Reed Army Medical Center, Adelphi Labs, and Fort
McNair

U.S. Department of Agriculture / Headquarters Complex

U.S. Department of Energy / National Renewable Energy Lab, Denver
Regional Office, Golden Field Office \*

*U.S. Department of Energy / Forrestal Headquarters*

U.S. Department of Energy / Germantown, MD Headquarters Facility

U.S. Department of Energy / Pacific Northwest National Laboratory

*U.S. Environmental Protection Agency* \*

U.S. General Service Administration / Binghamton Federal Building

*U.S. General Service Administration / Pirnie Federal Building*

U.S. National Park Service / Independence National Park

U.S. Navy / Region South

NGOs

American Council for Renewable Energy

American Wind Energy Association

Bonneville Environmental Foundation

Center for Resource Solutions

Earth Policy Institute

Energy Center of Wisconsin

Environmental Resources Trust

IBEW Local 332

National Geographic Society

National Hydrogen Association

The Nature Conservancy

Renewable Northwest Project

Schlitz Audubon Nature Center

Solar Electric Power Association

State Environmental Resource Center

Trout Unlimited

Other Organizations

World Bank

## What are the benefits of becoming a Green Power Partner?

In addition to the benefits of buying green power discussed in Chapter X
of this guide, Green Power Partners receive benefits and services from
EPA. These benefits and services include information and support, peer
exchange, and public recognition.

*Technical Information and Support:* EPA will provide Partners with
access to technical information on buying green power, including case
studies and a purchasing toolkit. Partners will also have access to
current market information, sample RFPs, and guidance on product
comparison.

*Network:* EPA will provide Partners with access to a network of green
power providers, green power purchasers, and related local and national
environmental organizations.

*Public Recognition:* Partners will receive national recognition through
awards and press announcements. EPA also works with each Partner to
tailor an individual communications plan. A Partner\'s plan might
include press events, advertisements, and internal company
communications.

*Use of Partnership Logo:* Partners will gain access to a Green Power
Partnership logo that can be used in corporate outreach and media
materials.

Also, by stimulating a network among green power providers and potential
purchasers, the Partnership will help lower transaction costs for
companies, state and local governments, and other organizations
interested in switching to green power.

###### What are the Partner obligations?

Partners pledge to replace a portion of their electricity consumption
with green power within a year of joining the Partnership. The minimum
amount of green power is based on the Partner's annual electricity use,
as shown in the table.

#######  Current Green Power Partnership Minimum Purchase Levels\*

  ---------------------------------- ------------------------------------
  Annual Electricity Usage (kWh)     Green Power Partnership Commitment

  \> 100,000,000                     2%

  \< 100,000,000                     3%

  \< 10,000,000                      6%

  \< 1,000,000                       10%

  \< 100,000                         15%
  ---------------------------------- ------------------------------------

> > \* EPA reserves the right to revise commitment standards
> > periodically to reflect changes in the green power market.

The purchase commitment level may be made on a facility, operating unit,
corporate, state-wide, or national basis.[^18] Baseline annual
electricity use may be revised to reflect energy-efficient measures
taken simultaneously without changing the participant\'s commitment
level.

In addition to the minimum amount, 50% of the minimum requirement must
come from new renewable resources, generally meaning those generators
that began operation on or after January 1, 1997.

EPA asks Partners to do the following:

-   Within one year of signing a Letter of Intent, a Partner should meet
    or exceed the minimum renewable energy goal as outlined by the
    program.

-   Share information about purchase experience.

-   Report information on an annual basis, including participating
    facilities, energy provider, the amount (kWh) and renewable energy
    mix of the green power purchase.

## How does EPA define green power? 

EPA's Green Power Partnership is currently using Green-e definitions for
renewable resources that are eligible to satisfy the Partnership
commitments. These definitions are included in Appendix E, and have been
developed through extensive stakeholder processes for both competitive
and regulated markets, as well as for renewable energy
certificates.[^19] More details on these green power definitions may be
found at [http://www.green-e.org](http://www.green-e.org/). EPA's
definitions for renewable resources may change if a national consensus
for environmentally acceptable renewable power standards emerges.

###### What purchases qualify to meet the Partner commitment?

A Partner\'s commitment may be met through a number of options, as
outlined below and described in more detail elsewhere in this Guide.

-   Renewable electricity products from utilities or marketers

-   Tradable renewable certificates (or green tags) from marketers

-   On-site renewable power generation

-   Any combination of the above

Renewable electricity is often sold as a blended product, which can
contain varying amounts of electricity generated from renewable energy
as well as from other sources. When purchasing a renewable electricity
product that includes both renewable and non-renewable energy, only the
renewable energy portion will count towards meeting the Partner's green
power commitments.

## Must Partners purchase a certified green power product?

Green power certification and accreditation programs help ensure that
customers get what they pay for when they choose green power. At this
time, EPA encourages, but does not require, Partners to purchase a green
power product certified by Green-e. Green-e is a voluntary certification
and verification program developed by the non-profit Center for Resource
Solutions, and is the most commonly used certification for green power.
Green-e maintains the following certification standards:

-   The Green-e Standard establishes the technical criteria that
    electricity products in competitive markets must meet to be eligible
    for certification.

-   The Green Pricing Accreditation Initiative accredits green pricing
    programs operated by regulated electric utilities.

-   The Green-e Tradable Renewable Certificate standard certifies
    certificate products nationwide.

    Additional information concerning Green-e is available at
    [www.green-e.org](http://www.green-e.org/).

###### How do we learn what products are available?

EPA, with the support of the Department of Energy and the National
Renewable Energy Laboratory, maintains a Green Power Locator at the
Green Power Partnership website:
<http://www.epa.gov/greenpower/buyguide/index.html>

###### How do we estimate the environmental benefits of a green power purchase?

EPA maintains the Power Profiler, a tool to estimate the impacts of the
energy that you use. See
<http://www.epa.gov/cleanenergy/powerprofiler.htm>

Based on a zip code, Power Profiler will compare the fuel mix and air
emissions impacts from your regional power grid to the national average.

Power Profiler will also determine the specific air emissions impacts
(nitrogen oxide, sulfur dioxide, and carbon dioxide) associated with
your organization's electricity use.

Power Profiler does not provide information about the environmental
attributes of power generated by your individual electricity supplier.
For company-specific information, you may want to access EPA\'s eGRID
database at <http://www.epa.gov/cleanenergy/egrid.htm>.

For more information on the Green Power Partnership:

Green Power Partnership

U.S. Environmental Protection Agency

1200 Pennsylvania Ave, NW (Mail Code 6202J)

Washington, DC 20460

<http://www.epa.gov/greenpower>/

# Appendix D: Green Power Market Development Group

## Overview

Convened in 2000 by the World Resources Institute (WRI), the Green Power
Market Development Group is a unique commercial and industrial
partnership dedicated to building corporate markets for green power. The
Group is transforming energy markets to enable corporate buyers to
diversify their energy portfolios with green power and reduce their
impact on climate change. The Group seeks to develop 1,000 megawatts of
new, cost-competitive green power by 2010 -- enough energy to power
750,000 homes.

The Group is a partnership between WRI and twelve major commercial and
industrial corporations that are major energy buyers:

-   Alcoa, Inc.

-   Cargill Dow, LLC

-   Delphi Corporation

-   The Dow Chemical Company

-   DuPont

-   General Motors

-   IBM

-   Interface

-   Johnson & Johnson

-   Kinko's

-   Pitney Bowes

-   Staples

These companies represent a variety of economic sectors and have varying
profiles for their energy consumption, needs, and geographic locations
In aggregate, the partners purchase millions of megawatt-hours of energy
every year, and some of them produce a substantial amount of their own
power. Their facilities and offices are located throughout the U.S. and
in many other countries.

The Group is pursuing three types of green power opportunities:

(1) **Green electricity:** Electricity from renewable resources
    including wind, solar photovoltaic, geothermal, biomass, landfill
    gas, and certified low-impact hydro.

(2) **Green thermal energy:** Heat from renewable resources, including
    solar thermal systems and direct use of landfill gas.

(3) **"Clean" energy technologies:** Electricity and heat from fuel
    cells

## Group strategy

The partners leverage their purchasing power and shared knowledge to
stimulate the development of cost-competitive renewable energy
resources. By developing the business case for clean energy and creating
replicable purchasing strategies, the Group is building robust corporate
markets for green power. To achieve this goal, the Group:

-   Conducts market research on green power technologies, products,
    economics, and providers.

-   Engages developers of on-site and grid-connected green power
    projects.

-   Works with power suppliers to design "next generation" green
    electricity products that are attractive to commercial and
    industrial end users.

-   Develops innovative analytical tools to evaluate the financial and
    environmental impacts of green power projects.

-   Shares strategies and lessons learned through the *Corporate Guide
    to Green Power Markets* publication series.

-   Informs decision-makers about policy actions that reduce barriers to
    corporate markets for green power.

## Group progress

The Group has successfully completed over \[XX placeholder XX\]
megawatts of green power projects and purchases as of November 2003.
Examples of Group partner projects include:

-   Dow will use 35 megawatts of fuel cells to generate electricity from
    hydrogen created as a by-product at the company's Freeport, Texas
    operations.

-   General Motors replaced coal and natural gas with landfill gas as a
    fuel for powerhouse boilers at assembly plants in Michigan, Indiana,
    and Louisiana.

-   IBM purchases over 6 million kilowatt-hours per year of green
    electricity from local wind farms to power manufacturing and
    development facilities in Texas and Minnesota.

-   Johnson & Johnson installed over 1.2 megawatts of rooftop solar
    photovoltaic systems at four facilities in California, New Jersey
    and Pennsylvania.

-   Kinko's uses green power at over 20 percent of its branches across
    the U.S.

## Building the business case for green power

The Group has identified several benefits that green power can provide
corporate energy end users:

(1) Reduce energy costs: Some types of renewable projects can save end
    users money relative to conventional energy sources (e.g., natural
    gas).

(2) Provide "peak-shaving" opportunities: Companies can use on-site
    systems such as solar PV to reduce consumption of grid electricity
    during peak periods.

(3) Hedge against fluctuating fossil fuel prices: Using renewable energy
    sources can diversify a company's energy portfolio, thus providing
    some degree of cost stability in the face of market fossil fuel
    price fluctuations.

(4) Decrease corporate emissions of greenhouse gases and pollutants:
    Renewable energy generates emissions reductions which might enable a
    company to meet corporate environmental goals/targets, participate
    in voluntary program targets, and participate in future emissions
    markets.

(5) Strengthen customer relationships: Using renewables can improve
    corporate image and can be attractive to environmentally sensitive
    customer segments (e.g., via marketing).

(6) Improve other stakeholder relations: Using green power can improve
    corporate relations with employees, local communities, and state &
    federal regulators.

## Resources for energy buyers (www.thegreenpowergroup.org)

The Group's website
([www.thegreenpowergroup.org](http://www.thegreenpowergroup.org/))
provides free information and tools to help companies and other
organizations understand and identify various green power opportunities.
Resources that can be accessed include:

-   **On-line green power marketplace.** Find up-to-date information on
    green power technologies, products, markets, developers, and
    suppliers.

> Members of the Green Power Market Development Group analyze all facets
> of the U.S. market for green power as a means to securing
> cost-competitive power for their own individual needs as well as
> stimulating the markets to deliver more competitive green power over
> time. There are a variety of topics that the group delves into in
> great detail, including each of the major renewable resources (wind,
> solar, biomass, landfill gas, geothermal and certified low-impact
> hydro), retail products, and green tags, among others.

-   **Green Power Analysis Tool.** Download an innovative green power
    project evaluation tool that analyzes renewable energy projects from
    an integrated financial and environmental perspective.

> As corporate managers evaluate projects, they face a number of
> important questions: How much does green power cost relative to
> traditional energy sources? What does green power offer in terms of
> emissions reductions? How will the relative prices of green power and
> traditional energy sources change under future regulations? The Green
> Power Analysis Tool permits corporate managers to analyze the economic
> and environmental attributes of one or more green power projects.
> Through an easy-to-use interface, users can research green power
> projects of interest and create tables and graphs that analyze green
> power projects either singly or in combination. The tool quantifies
> emissions reductions in CO2, NOx and SO2 and the cost of achieving
> those reductions in dollars per ton.

-   **Corporate Guide to Green Power Markets*.*** Access and subscribe
    to a free quarterly publication series that shares the business case
    for green power, information on renewable technologies, purchasing
    strategies, and case studies. Examples of some of the installments
    in this series are:

> *Introducing Green Power for Corporate Markets: Business Case,
> Challenges, and Steps Forward*: An overview of corporate markets for
> green power, outlining the factors underlying the emergence of green
> power markets in the United States, potential benefits of green power
> for commercial and industrial energy users, challenges facing green
> power, and steps companies can take to address these challenges.
>
> *Opportunities with Landfill Gas*: Discusses landfill gas-to-energy
> (LFGTE) projects for corporate end users, providing an introduction to
> landfill gas as a renewable energy source and presenting both a
> business and environmental case for LFGTE. The guide explains the
> economics of LFGTE projects, outlines important aspects of
> implementation, and identifies policy actions that would facilitate
> the further development of landfill gas as a source of green energy.
>
> *Corporate Greenhouse Gas Emissions Inventories: Accounting for the
> Climate Benefits of Green Power*: Introduces corporate greenhouse gas
> (GHG) emissions inventories as a fundamental first step to enabling
> green power to meet corporate energy and climate goals. The guide
> articulates the business case for developing a GHG inventory and
> includes case studies of the value GHG inventories are providing
> Fortune 500 companies. It also outlines how to develop an inventory
> and provides guidance on how to record the GHG emissions impact from a
> variety of corporate green power projects.
>
> *Green Tags: A Novel Renewable Energy Product for Corporate
> Customers*: Discusses the nature of green tags and how they differ
> from other renewable energy products, and outlines the business case
> for corporate procurement of green tags. The guide shares several
> strategies for purchasing tags based on experiences of the Group and
> other companies. Recommendations to market participants and policy
> makers are included.

-   **Green Power Policy Perspectives.** Learn about public policies
    that can reduce the barriers to building corporate markets for green
    power.

## Additional information

For more information on the Green Power Market Development Group or WRI,
please contact:

http://www.thegreenpowergroup.org

World Resources Institute

10 G Street, NE

Washington, DC 20002

202-729-7600

http://www.wri.org

Jennifer Layke, Director of Business Engagement, tel: (202) 729-7657,
jennifer@wri.org

Craig Hanson, Senior Associate, tel: (202) 729-7624, chanson@wri.org

Andrew Aulisi, Senior Associate, tel: (202) 729-7748, aaulisi@wri.org

***About the World Resources Institute and the Sustainable Enterprise
Program***

The World Resources Institute (WRI) is an environmental think tank that
goes beyond research to create practical ways to protect the Earth and
improve people's lives. The mission of the Institute is to move human
society to live in ways that protect Earth's environment for current and
future generations. For over a decade, WRI's Sustainable Enterprise
Program has harnessed the power of business to create profitable
solutions to environment and development challenges. WRI is the only
organization that brings together corporations, entrepreneurs,
investors, and business schools to accelerate change in business
practices. The program improves people's lives and the environment by
helping business leaders and new markets thrive.

# Appendix E: Center for Resource Solutions Green-e Certification Criteria

[[\[Reviewers -- CRS is still developing this appendix; it will be
circulated for review as soon as available.\]]{.underline}]{.mark}

#  Appendix F: Resources For Further Research

### Introduction

More information about developing a strategic energy management plan can
be found on the ENERGY STAR web site (<http://www.energystar.gov/>,
follow the links to "Business Improvement." then "Energy Management
Strategy").

For information on electricity restructuring around the country, see
FEMP's restructuring web page at
[[http://pnnl-utilityrestructuring.pnl.gov/]{.underline}](http://www.femp-restructuring.org/).

More information about the current state of green power markets can be
found in: Bird, Lori and Blair Swezey. 2003. "Estimates of Renewable
Energy Developed to Serve Green Power Markets in the United States."
National Renewable Energy Laboratory, Golden, CO. February.
<http://www.eere.energy.gov/greenpower/new_gp_cap.shtml>.

### Benefits of Green Power

Public support for renewable energy:

Farhar, Barbara C. and Ashley H. Houston. 1996. *Willingness to Pay for
Electricity from Renewable Energy*. National Renewable Energy
Laboratory. Golden, CO. September.

Job creation:

National Wind Coordinating Committee, The Effect of Wind Energy
Development

on State and Local Economies, Wind Energy Issue Brief No. 5, January
1997. Visit the NWCC at
[http://www.nationalwind.org](http://www.nationalwind.org/).

### Environmental Attributes

Environmental impacts of conventional and renewable energy sources:

Serchuck, Adam. 2000. *The Environmental Imperative for Renewable
Energy: An Update*. College Park, MD: Renewable Energy Policy Project
(REPP), University of Maryland. April.
(<http://www.repp.org/repp_pubs/articles/envImp/envImp.pdf>).

Emissions credits:

Wooley, David R. 2000. *A Guide to the Clean Air Act for the Renewable
Energy Community*. College Park, MD: Renewable Energy Policy Project
(REPP), University of Maryland. Issue Brief No. 15. February.
(<http://www.repp.org/repp_pubs/articles/issuebr15/caaRen.pdf>)

Greenhouse Gas Registry/Environmental Accounting:

See Green Power Market Development Group Installment 3. Corporate
Greenhouse Gas Emissions Inventories: Accounting for the Climate
Benefits of Green Power
([http://www.thegreenpowergroup.org/publications.html).]{.underline}

### Tradable Renewable Certificates

Hamrin, Jan, and Meredith Wingate. 2003. *Regulator\'s Handbook on
Tradable Renewable Certificates*. San Francisco, CA: Center for Resource
Solutions. May.
(http://www.resource-solutions.org/RegulatorHandbook.htm).

### Utility Green Pricing Programs

Lieberman, Dan. 2002. *Green Pricing at Public Utilities: A How-to Guide
Based on Lessons Learned to Date*. Center for Resource Solutions and
Public Renewables Partnership. October. Available from World Wide Web:
(<http://www.resource-solutions.org/PRP.htm>).

### Green Power Product Lists

-   The Green Power Network maintains lists of products offered in each
    state
    ([www.eere.energy.gov/greenpower/](http://www.eere.energy.gov/greenpower/)).

-   Green-e maintains a list of certified products offered in each state
    (http://www.green-e.org/your_e_choices/pyp.html).

### On-Site Renewable Generation

For more information about on-site renewable generation (and other types
of distributed energy resources), see:

-   FEMP. 2002. *Using Distributed Energy Resources: A How-To Guide for
    Federal Facility Managers*. Washington, DC: U.S. Department of
    Energy, Federal Energy Management Program. DOE/GO-102002-1520. May.
    (http://www.eere.energy.gov/femp/techassist/pubs.html)

```{=html}
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```
-   Massachusetts DOER. 2001. *Renewable Energy & Distributed Generation
    Guidebook: A Developer's Guide to Regulations, Policies and Programs
    that Affect Renewable Energy and Distributed Generation Facilities
    in Massachusetts*. The Massachusetts Division of Energy Resources.
    April. (<http://www.state.ma.us/doer/pub_info/guidebook.pdf>)

-   California Energy Commission

> (<http://www.energy.ca.gov/renewables/index.html>).

State incentives for renewable energy:

-   The Database of State Incentives for Renewable Energy includes
    information about capital cost incentives as well as net metering
    laws ([http://www.dsireusa.org](http://www.dsireusa.org/)).

-   Clean Energy States Alliance (http://www.cleanenergystates.org/).

-   The American Wind Energy Association lists state incentives for
    small wind installations
    ([http://www.awea.org](http://www.awea.org/), follow links to "Small
    Wind Systems" then "State by State Information").

-   Bolinger, Mark, Ryan Wiser, Lew Milford, Michael Stoddard, and Kevin
    Porter. 2001. *Clean Energy Funds: An Overview of State Support for
    Renewable Energy*. Berkeley, CA: Lawrence Berkeley National
    Laboratory. LBNL-47705. April.
    (<http://eetd.lbl.gov/ea/EMS/reports/47705.pdf>)

For more information about interconnection with the utility grid, see:

-   California Rule 21--standards for interconnection of distributed
    energy resources
    (http://www.energy.ca.gov/distgen/interconnection/california_requirements.html).

-   Standards Board of the Institute for Electrical and Electronics
    Engineers, Inc. (IEEE) Standard 1547, "Standard for Interconnecting
    Distributed Resources with Electric Power Systems"
    (http://grouper.ieee.org/groups/scc21/dr_shared/).

-   FEMP Interconnection and Permitting Guide
    (<http://www.eere.energy.gov/femp/techassist/inter_permit_guide.html>).

-   C. Larsen, B. Brooks, T. Starrs, *Connecting to the Grid: A Guide to
    PV Interconnection Issues*. Third Edition. Interstate Renewable
    Energy Council, 2000. (<http://www.irecusa.org/pdf/guide.pdf>).

For more information about measurement and verification of system
performance, see:

FEMP M&V guide (need URL).

For more information about PV systems, see:

-   Solar Energy Industries Association

> ([http://www.seia.org](http://www.seia.org/)).

-   California Energy Commission, *Buying a Photovoltaic Solar Electric
    System: A Consumer Guide*. April 2000.
    (<http://www.energy.ca.gov/reports/500-99-008.PDF>).

-   California Energy Commission, *A Guide to Photovoltaic (PV) System
    Design and Installation*. June 2001.
    (<http://www.energy.ca.gov/reports/2001-09-04_500-01-020.PDF>).

American Wind Energy Association

[http://www.awea.org](http://www.awea.org/)

Interstate Renewable Energy Council

[http://www.irecusa.org](http://www.irecusa.org/)

On-site renewable generation financial analysis tools:

There are a number of tools available to help you evaluate on-site
generation applications. Before using any of them, you should examine
them closely to determine if they are appropriate for your needs.

-   RETscreen International
    ([http://retscreen.gc.ca/ang/menu.html]{.underline})

> Developed by Natural Resources Canada\'s CANMET Energy Diversification
>
> Research Laboratory (CEDRL), RETScreen allows users to assess the
> economics of various renewable energy installations, utilizing a
> comprehensive set of variables. For example, in analyzing the
> feasibility of a potential photovoltaic (PV) site, the software will
> tell you the average daily radiation for the plane of your PV array.
> Its default data for a financial analysis includes everything from the
> cost of equipment from a variety of suppliers to the cost of obtaining
> permits. For any given project, users can substitute their actual data
> for the default data to draw more accurate conclusions. RETScreen
> covers all phases of project development: preliminary feasibility
> studies, market studies, policy analysis, information dissemination,
> project management, project lender due-diligence, and sales of
> products or services.

-   QuickScreen
    ([http://www.pacificenergy.com/quickscn.htm]{.underline}) [this link
    is no longer active---trying to determine where it may be
    available.]{.mark}

> Developed by Pacific Energy Group in conjunction with the National
> Renewable Energy Laboratory (NREL) and the Photovoltaic Design
> Assistance, QuickScreen has a simple, quick interface, but it only
> evaluates grid-tied photovoltaics. It is useful to compare potential
> sites for cost-effectiveness. It generates capacity factor for PV in
> any U.S. region, load match factor (matching load profiles with rated
> capacity), and break-even price for PV installations based on avoided
> energy costs.

-   RETFinance ([http://analysis.nrel.gov/retfinance]{.underline})

> Developed by the Energy Analysis Team at NREL, RETFinance simulates a
> 30-year nominal dollar cash flow for renewable projects, including
> earnings, debt payments, levelized cost-of-electricity, after-tax
> internal rate of return, and debt service coverage ratio (net
> operating income divided by total debt service). As with RETScreen
> International, user can save scenarios and share them with colleagues.
> NREL also has a Web site devoted to user communications,
> http://nrel.communityzero.com/retfinance.

-   Clean Power Estimator
    ([http://www.clean-power.com/software.htm]{.underline})

> Developed by Clean Power Research, based in Napa, California, the
> Clean Power Estimator offers a quick cost-benefit analysis for
> photovoltaics, solar thermal, wind, and energy efficiency for systems
> owned by both residential and commercial end users. It looks at end
> user\'s location and a variety of factors in financing: system cost,
> incentives, tax benefits, and loan rate structures. Unlike the other
> software, it is not free but licensed by entities like the California
> Energy Commission for California customers and BP Solar. If your
> facility is located in California, go to:
> [http://www.consumerenergycenter.org/renewable/estimator/default.htm]{.underline}

-   Federal Renewable Energy Screening Application (FRESA)

> [http://www.eren.doe.gov/femp/techassist/softwaretools/softwaretools.html#fresa]{.underline}
>
> FRESA was developed by the U.S. Department of Energy\'s Office of
> Energy Efficiency and Renewable Energy, and is primarily useful to
> discover and compare opportunities for renewables and conservation at
> Federal facilities. It dovetails with the Federal Energy Management
> Program\'s Audit format.

-   Hybrid Optimization Model for Electric Renewables (HOMER)
    ([http://www.nrel.gov/international/tools/homer/homer.html]{.underline})

> Developed by NREL, HOMER compares the cost-effectiveness of off-grid
> renewables to grid extensions or stand-alone generators. It is
> designed to help the user determine the optimal power system to serve
> designated loads. The system that it recommends will be a hybrid of
> wind, PV, diesel generator, and battery storage. It does not provide
> its own default data on solar and wind resources, or on the
> performance and cost of various components.

-   Real Options Analysis Center
    ([http://www.nrel.gov/realoptions]{.underline}/)

> Developed by NREL, the Real Options Analysis Center features two
> online models for valuation of renewable energy R&D and valuation of
> distributed generation assets.

-   FATE-2P (The Financial Analysis Tool for Electric Energy Project)
    ([http://www.nrel.gov/international/tools/fate-2p.html]{.underline})

> Developed by NREL, FATE2-P is a power plant project finance model for
> calculating cost of energy or internal rate of return for alternative
> energy projects.

### Greenhouse Gas Inventories and Registries

Green Power Market Development Group's Corporate Greenhouse Gas
Emissions Inventories: Accounting for the Climate Benefits of Green
Power

(http://www.thegreenpowergroup.org/Installment3.pdf).

# Appendix G: Complications in Defining Green Power

While there is currently no single standard definition of the phrase
"green power", there is general agreement that the term refers to
electricity products that include significant proportions of electricity
generated from energy resources that are both renewable and
environmentally preferable.

Differences in defining the phrase arise primarily from the differing
assessments of the environmental impacts of harnessing specific
resources and of the relative significance of each impact. While burning
municipal solid waste (MSW) is not considered green by some
organizations concerned about the resulting (toxic) air emissions and
the effect on incentives to reduce waste and to recycle, others consider
MSW to be "green" because it converts ever-replenished waste into energy
and eases the burden at landfills. Hydropower is clearly a renewable
resource, but its perceived "greenness" depends on differing levels of
concern about impacts on local habitats, river ecology, and fish
populations. Because of the importance of hydropower resources in the
current national generation mix, the debate over its "greenness" has
been rather heated. The Green-e guidelines have addressed this issue by
adopting a standard for "low impact" hydropower. Finally, although not a
renewable generation technology in a scientific sense, fuel cells using
natural gas as fuel are explicitly included in certain state renewable
resource programs. Other emerging technologies may also be included in
such programs in the future.

Rather than any specific resource being clearly both renewable and
environmentally preferable and, therefore, clearly "green," there is
instead a continuum of "brown" to "green" along which all energy
resources fall. For more information about the environmental impact of
renewable energy resources, see Appendix F (Resources for Further
Research).

Perhaps even more difficult than assessing the "greenness" of an energy
*resource* is determining the "greenness" of an electricity product made
up of several different energy sources. A product containing 20% wind
power may actually be quite polluting if the remaining 80% comes from a
dirty coal plant. As is the case with specific energy resources, a
continuum from brown to green power *products* exists as well. In
purchasing renewable power, some organizations decide to place limits on
the proportion of power derived from "less green" sources (e.g., no more
than 50% of power from MSW) in the power products they purchase.

In an effort to head off questionable marketing practices, Attorney
Generals in various states have also examined the question of what
constitutes green power. Their efforts have mainly focused on defining
what types of claims marketers can make about their products without
being deceptive and in violation of state consumer protection laws. For
more information about consumer protections concerning green power
advertising claims, see the *Environmental Marketing Guidelines for
Electricity* by the National Association of Attorneys General, dated
December 1999.

# Glossary

This glossary provides definitions of a number of important terms
associated with power generation technologies and their environmental
impacts, including definitions of specific pollutants, technologies, and
the key terms related to the electric power marketplace.

Acid Rain

Acid rain is a broad term used to describe several ways that acidic
compounds fall out of the atmosphere, causing a variety of ground-level
environmental effects. These effects include damage to forests and
soils, fish and other living things, and human health. Acid rain also
reduces how clearly we can see through the air, an effect called
visibility reduction. Sulfur dioxide and nitrogen oxides are the primary
causes of acid rain. In the United States, about two-thirds of all
sulfur dioxide and one-quarter of all nitrogen oxides come from electric
power generation that relies on burning fossil fuels like coal.

Annual Consumption

Annual consumption refers to the amount of electricity used by a
consumer in one year and is typically measured in kilowatt-hours (kWh).
This information can be acquired from your electricity bill or by
contacting your energy provider.

Carbon Dioxide

Burning fossil fuels releases carbon that has been stored underground
for millions of years into the atmosphere. The carbon in these fossil
fuels is transformed into carbon dioxide, the predominant gas
contributing to the greenhouse effect, during the combustion process.

Coal

Coal is formed from plant and animal matter that has been subjected to
geologic heat and pressure, transformed over millions of years into hard
black solids. Because coal is a readily available resource in the United
States, coal power plants provide about half of the nation's
electricity. However, coal-fired power plants generally cause more
pollution per unit of electricity than any other fuel. Most coal plants
are required to have several pollution control devices to reduce the
amount of pollutants that are released into the air from burning the
coal.

Commercial Energy Customer

A commercial energy customer refers to non-industrial customers
occupying retail space or office buildings.

Conventional Power

Conventional power is produced from non-renewable fuels such as coal,
oil, nuclear and gas, also known as traditional power.

Energy Efficiency

Energy efficiency refers to products or systems using less energy to do
the same or better job than conventional products or systems. Energy
efficiency saves energy, saves money on utility bills, and helps protect
the environment by reducing the amount of electricity (and associated
environmental impacts) that needs to be generated.

Fossil Fuels

Fossil fuels are the nation\'s principal source of electricity. The
popularity of these fuels is largely due to their low costs. Fossil
fuels come in three major forms --- coal, oil, and natural gas. All
three were formed many hundreds of millions of years ago before the time
of the dinosaurs. Because fossil fuels are a finite resource and cannot
be replenished once they are extracted and burned, they are not
considered renewable.

Greenhouse Effect

The greenhouse effect is produced as greenhouse gases allow incoming
solar radiation to pass through the Earth\'s atmosphere, preventing part
of the outgoing infrared radiation from the Earth\'s surface and lower
atmosphere from escaping into outer space.

Green Power

Electricity that is generated from renewable energy sources is often
referred to as "green power." This term implies reduced environmental
impact from electricity generation. Green power products can include
electricity generated exclusively from renewable resources or, more
frequently, electricity produced from a combination of fossil and
renewable resources. According to Green-e, green power is an electricity
product that meets the criteria of the Green-e Standard, thus being
eligible for Green-e certification.

Green Power Marketers

The term "green power marketers" usually refers to energy providers
operating in states that permit retail competition in the electricity
markets.

Green Power Purchasing

Green power can be purchased nationwide from several sources. Green
power marketers offer green power products to consumers in deregulated
markets --- such as New Jersey, Pennsylvania, and New England. In states
that do not allow retail competition in the electricity markets, many
utilities offer renewable energy products through green pricing
programs. In addition, all customers nationwide have the opportunity to
buy renewable energy and stimulate the development of renewable
generation sources through renewable energy certificates. Finally,
customers can choose to install on-site renewable generation, such as
solar panels.

Green Pricing

Green pricing refers to a utility service that allows customers of
traditional utilities support a greater level of utility investment in
renewable energy by paying a premium on their electric bill to cover any
above-market costs of acquiring renewable energy resources. To find out
if your utility offers a green pricing program, refer to the table of
green pricing programs at the green power network web-site at:
[http://www.eren.doe.gov/greenpower/home.shtml]{.underline}

Ground-level Ozone

Ground-level ozone is formed by a chemical reaction between volatile
organic compounds and oxides of nitrogen in the presence of sunlight.
Ozone concentrations can reach unhealthful levels when the weather is
hot and sunny with little or no wind. High concentrations of ozone near
ground level are harmful to people, animals, crops, and other materials.

Industrial Air Pollution

This term refers to the emissions of the following pollutants: sulfur
oxides, nitrogen oxides, mercury, and carbon dioxide. These air
emissions contribute to such environmental concerns as urban smog; acid
deposition; excessive nutrient loads to important bodies of water such
as the Chesapeake Bay; haze in national parks and wilderness areas; and
global climate change.

Kilowatt-hour (kWh):

A basic unit for measuring energy. Typically, the amount you pay for
energy is based on the number of kilowatt-hours you use per month.

Hydroelectric Power

The process of generating electricity by harnessing the power of moving
water is called hydroelectricity. Hydroelectric power (hydropower) is
generated by forcing water that is flowing downstream, often from behind
a dam, through a hydraulic turbine that is connected to a generator. The
water exits the turbine and is returned to the stream or riverbed.

Mercury

Mercury is a toxic heavy metal that is a byproduct of the combustion of
fossil fuels, especially coal. It can accumulate in the environment and
is highly toxic to humans and animals if inhaled or swallowed. Exposure
can permanently damage the brain, kidneys, and fetuses.

Natural Gas

Natural gas is a fossil fuel formed when layers of buried plants and
animals decompose over a long period of time. The energy that the plants
and animals originally obtained from the sun is stored in the natural
gas. The primary component of natural gas is methane, a potent
greenhouse gas. Natural gas is a nonrenewable resource because it cannot
be replenished on a human time frame.

Nitrogen Oxides

Nitrogen oxides are a byproduct of the combustion of fossil fuels. They
include various nitrogen compounds like nitrogen dioxide and nitric
oxide. These compounds play an important role in the atmospheric
reactions that create ground-level ozone and acid rain. The two major
sources of nitrogen oxides are transportation vehicles and stationary
combustion sources, such as electric utility and industrial boilers.

Nuclear Energy

Nuclear energy originates from the splitting of uranium atoms in a
process called fission. At the power plant, the fission process is used
to generate heat for producing steam, which is used by a turbine to
generate electricity. Because nuclear power plants do not burn fuel,
they do not emit air pollutant emissions. However, all of the nuclear
power plants in the United States collectively produce about 2,000
metric tons per year of radioactive waste.

Oil

Oil, a liquid fossil fuel, is formed from layers of buried plants and
animals that have been subjected to geologic heat and pressure over a
long period of time. The energy that the plants and animals originally
obtained from the sun is stored in the oil in the form of carbon. In
addition to carbon, oil contains elements such as nitrogen, sulfur,
mercury, lead, and arsenic. Oil is a nonrenewable resource because it
cannot be replenished on a human time frame.

Particulate Matter

Particulate matter (PM) is a byproduct of the combustion of fossil
fuels. PM includes dust, dirt, soot, smoke, and liquid droplets directly
emitted into the air by sources such as factories, power plants, cars,
construction activity, fires, and natural windblown dust. Particles
formed in the atmosphere by condensation or the transformation of
emitted gases such as sulfur dioxide and volatile organic compounds
(VOCs) are also considered particulate matter.

Power Marketer

An entity that buys and sells power generated by others.

Renewable Energy

The term renewable energy generally refers to electricity supplied from
renewable energy sources, such as wind and solar power, geothermal,
hydropower, and various forms of biomass. These energy sources are
considered renewable sources because they are continuously replenished
on the earth.

Renewable Portfolio Standard

The renewables portfolio standard (RPS) is a requirement that a minimum
percentage of each electricity generator\'s or supplier\'s resource
portfolio come from renewable energy.

Retail Competition

In states with retail competition, consumers have the opportunity to
choose their energy provider and purchase products based on the price or
on the source of power supplied to their home or business.

Small Hydro

In addition to very large hydro plants in the West, the United States
has many smaller hydro plants. Like large plants, small-scale
hydroelectric systems capture the energy in flowing water and convert it
to electricity. Although the potential for small hydroelectric systems
depends on the availability of suitable water flow, these systems can
provide cheap, clean, reliable electricity where the resource exists.

Sulfur Dioxide

High concentrations of sulfur dioxide affect breathing and may aggravate
existing respiratory and cardiovascular disease. Sensitive populations
include asthmatics, individuals with bronchitis or emphysema, children,
and the elderly. Sulfur dioxide is also a primary contributor to acid
rain, which causes acidification of lakes and streams and can damage
trees, crops, historic buildings, and statues. In addition, sulfur
compounds in the air contribute to visibility impairment in large parts
of the country. This is especially noticeable in national parks. Sulfur
dioxide is released primarily from burning fuels that contain sulfur
(such as coal, oil, and diesel fuel). Stationary sources such as coal-
and oil-fired power plants, steel mills, refineries, pulp and paper
mills, and nonferrous smelters are the largest releasers.

Tradable Renewable Energy Certificates

Tradable renewable energy certificates (also known as green tags)

represent the environmental attributes of power generated from renewable
electric plants. Several organizations offer certificates separate from
electricity service (i.e., customers do not need to switch from their
current electricity supplier to purchase these certificates). For a list
of providers, see:
[http://www.eren.doe.gov/greenpower/certificates.shtml]{.underline}

Utility

A utility is a municipal or private business that provides electricity
to the public and is subject to governmental regulation.

[^1]: New renewable energy would include any renewable energy acquired
    by the Federal Government after 1990
    (http://www.eere.energy.gov/femp/resources/renewableguide.html).

[^2]: Including on-site renewable power and heat generation, the Federal
    government has achieved close to 50% of its 2005 renewable energy
    goal (as of February 2003).

[^3]: Farhar, Barbara C. and Ashley H. Houston. 1996. *Willingness to
    Pay for Electricity from Renewable Energy*. National Renewable
    Energy Laboratory. Golden, CO. September.

[^4]: Executive Order 13123, Section 204.

[^5]: E.O. 13123, Sections 404(a) and 404(c)(1).

[^6]: E.O. 13101, Sections 201.

[^7]: See FAR part 1.102(a).

[^8]: In addition to environmental and energy efficiency considerations,
    other factors determining best value include special features that
    are not provided by a comparable supply or service, trade-in
    considerations, probable life relative to comparable items, warranty
    considerations, maintenance availability, and past performance. See
    FAR Part 8.404(b)(2).

[^9]: See FAR Part 2.101.

[^10]: See FAR Part 11.002(d).

[^11]: How clearly an agency specifies its requirements during the
    solicitation process is a major determinant of the relative
    importance of cost in determining best value. In general, as
    requirements become more clearly defined, the importance of price
    relative to other considerations increases. See FAR Part 15.101.

[^12]: See FAR subpart 2.101 for complete definition.

[^13]: See FAR part 12.

[^14]: See, for example, the Automated Power Exchange (APX) at
    [www.apx.com](http://www.apx.com/).

[^15]: Personal communication with Virgil Ostrander, December 14, 1999.

[^16]: See FAR 1.102(d).

[^17]: See FAR 8.404(3)

[^18]: If an organization decides to join with just one of its
    facilities, the Partnership benefits, including recognition, will
    extend only to that facility.

[^19]: In states where local stakeholders and Green-e\'s governance
    boards have not adopted standards for eligible renewable resources,
    Green-e describes a minimum standard acceptable to the program\'s
    governing boards.