A national laboratory of the U.S. Department of Energy

Office of Energy Efficiency & Renewable Energy

National Renewable Energy Laboratory 

Innovation for Our Energy Future 

Trends in Utility Green 

Pricing Programs (2005) 

Lori Bird and Elizabeth Brown

Technical Report 

NREL/TP-640-40777 

October 2006 

NREL is operated by Midwest Research Institute ● Battelle Contract No. DE-AC36-99-GO10337 
Trends in Utility Green 

Pricing Programs (2005)

Lori Bird and Elizabeth Brown

Prepared under Task No. ASG6.1003 

Technical Report 

NREL/TP-640-40777 

October 2006 

National Renewable Energy Laboratory

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iii

Acknowledgments 

This work was funded by the U.S. Department of Energy’s (DOE) Office of Energy Efficiency 

and Renewable Energy (EERE). The authors wish to thank Linda Silverman of EERE and the 

EERE renewable energy technology programs for their support of this work. The authors also 

wish to thank Ed Holt of Ed Holt and Associates, Dan Lieberman of the Center for Resource 

Solutions, and Blair Swezey of NREL for their thoughtful review of the document, as well as 

Michelle Kubik of NREL for her editorial support. Finally, the authors thank the many utility 

contacts that provided the information summarized in this report, and Lynne Fenn of NREL and 

Diane Zipper of the Renewable Northwest Project for their assistance in collecting data from 

utilities. Additional information on green power market trends and activities can be found on the 

U.S. DOE’s Green Power Network Web site (http://www.eere.energy.gov/greenpower/). 
TABLE OF CONTENTS 

Acknowledgments..........................................................................................................................iii 

Executive Summary........................................................................................................................ 1 

Introduction..................................................................................................................................... 4 

Data Collection and Methodology.................................................................................................. 4 

Customer Participation.................................................................................................................... 5 

Number of Customers............................................................................................................... 5 

Participation Rates .................................................................................................................... 7 

Retention of Customers............................................................................................................. 9 

Renewable Energy Sales and Supplies ........................................................................................... 9

Green Power Sales and Revenues............................................................................................. 9 

Renewable Energy Resources Supplying Green Pricing Programs........................................ 11 

Green Energy Sales vs. Total Utility Sales............................................................................. 12 

Ownership vs. Purchases of Supplies ..................................................................................... 13 

Product Type................................................................................................................................. 14 

Energy Blocks vs. Percentage of Use ........................................................................................... 15 

Pricing........................................................................................................................................... 16 

Marketing...................................................................................................................................... 18 

Marketing and Administration Spending................................................................................... 18 

Customer Acquisition ................................................................................................................ 20 

Marketing Techniques Employed.............................................................................................. 22 

Program Implementation .............................................................................................................. 24 

Enrollment Options.................................................................................................................... 24 

Enrollment Term........................................................................................................................ 25 

Program Evaluations and Market Research............................................................................... 25 

Customer Value ......................................................................................................................... 26 

Conclusions and Observations...................................................................................................... 28 

References..................................................................................................................................... 30 

Appendix A................................................................................................................................... 32 

Appendix B ................................................................................................................................... 35 

Appendix C ................................................................................................................................... 37 

 iv
LIST OF TABLES 

Table 1: Number of Participants in Utility Green Power Programs (in Regulated and 

Competitive Electricity Markets).................................................................................. 5 

Table 2: Estimated Cumulative Number of Customers Participating in Utility Green 

Pricing Programs (Regulated Electricity Markets Only) .............................................. 6 

Table 3: Number of Customer Participants by Program, 2004-2005.......................................... 7 

Table 4: Customer Participation Rates in Utility Green Pricing Programs ................................ 7 

Table 5: Customer Participation Rates in Utility Green Pricing Programs, 2004-2005 ............. 8 

Table 6: Average Green Pricing Participation Rates by Utility Type......................................... 8 

Table 7: Median Green Pricing Participation Rates by Utility Type .......................................... 8 

Table 8: Fraction of Customers Dropping Out of Green Pricing Programs ............................... 9 

Table 9: Sales of Renewable Energy through Utility Green Power Programs in 

Regulated and Competitive Electricity Markets (million kWh)................................. 10 

Table 10: Annual Sales of Green Energy through Utility Green Pricing Programs 

(Regulated Electricity Markets Only), millions of kWh............................................. 10 

Table 11: Average Purchases of Green Energy Per Green Pricing Customer (kWh/year)......... 10 

Table 12: Renewable Energy Sales through Utility Programs (million kWh)............................ 11 

Table 13: Renewable Energy Sources Supplying Green Pricing Programs, 2005 ..................... 11 

Table 14: Estimated Cumulative Capacity Supplying Utility Green Pricing Programs, 

1999-2004 ................................................................................................................... 12 

Table 15: Green Energy Sales as a Percent of Utility Electricity Sales, 2005............................ 12 

Table 16: Average, Median, and Range Green Energy Sales as a Percent of Utility 

Electricity Sales.......................................................................................................... 13 

Table 17: Residential Monthly Expenditures on Green Power and Annual Program 

Revenues..................................................................................................................... 13

Table 18: Utility Procurement of Renewable Energy Supplies .................................................. 14 

Table 19: REC Purchases by Utilities to Supply Green Pricing Programs ................................ 14 

Table 20: Price Premiums of Utility Green Power Products (¢/kWh)........................................ 16 

Table 21: Green Pricing Premiums by Utility Type, 2003-2005 (¢/kWh) ................................. 17 

Table 22: Green Pricing Premiums by Utility Type, 2005 (¢/kWh)........................................... 17 

Table 23: Utility Expenditures on Marketing in 2005 (Excluding Staff Time).......................... 19 

Table 24: Utility Expenditures on Program Administration in 2005 (Including Staff 

Time)........................................................................................................................... 19 

Table 25: Marketing and Administrative Expenditures as Percentage of Premium, 2005 ......... 20 

Table 26: Explantion of Costs Born by Nonparticipants, 2005 .................................................. 20 

Table 27: Residential Customer-Acquisition Costs by Year ...................................................... 21 

Table 28: Residential Customer-Acquisition Costs by Utility Size............................................ 21 

Table 29: Marketing Techniques Used by Utilities ................................................................... 23 

Table 30: Number of Marketing Techniques Used by Utilities ................................................. 24 

Table 31: Methods of Enrolling in Green Pricing Programs ..................................................... 24 

Table 32: Enrollment Term by Customer Segment .................................................................... 25 

Table 33: Methods of Providing Additional Program Benefits .................................................. 27 

Table B-1: Utilities Offering Green Pricing Programs in Regulated Markets, 2005.................... 35 

Table B-2: Utility/Marketer Green Power Programs in Restructured Electricity Markets, 

2005............................................................................................................................. 36 

 v
Table C-1: Green Pricing Program Renewable Energy Sales (as of December 2005)................. 37 

Table C-2: Total Number of Customer Participants (as of December 2005) ............................... 38 

Table C-3: Customer Participation Rate (as of December 2005) ................................................. 39 

Table C-4: Price Premium Charged for New, Customer-Driven Renewable Power (as of 

December 2005).......................................................................................................... 40 

LIST OF FIGURES 

Figure 1: Utility Green Pricing Program Premiums (Energy-Based Programs Only) ............... 16 

Figure 2: Customer-Acquisition Costs (2005) ........................................................................... 21 

 vi
Executive Summary 

In the early 1990s, only a handful of utilities offered their customers a choice of purchasing 

electricity generated from renewable energy sources. Today, more than 600 utilities—or about 

20% of all utilities nationally—provide their customers a “green power” option. Because some 

utilities offer programs in conjunction with cooperative associations or other publicly owned 

power entities, the number of distinct programs totals more than 130. Through these programs, 

more than 50 million customers have the ability to purchase renewable energy to meet some 

portion or all of their electricity needs—or make contributions to support the development of 

renewable energy resources. Typically, customers pay a premium above standard electricity rates 

for this service. 

This report presents year-end 2005 data on utility green pricing programs, and examines trends 

in consumer response and program implementation over time. The data in this report, which 

were obtained via a questionnaire distributed to utility green pricing program managers, can be 

used by utilities to benchmark the success of their green power programs. It is important to note 

that this report covers only a portion of voluntary markets for renewable energy. It does not 

cover green power sold by independent marketers except for cases in which the marketers work 

in conjunction with utilities or default electricity suppliers.1 

At the end of 2005, green pricing sales were equivalent to more than 740 MW of new renewable 

energy capacity. Thus, green pricing continues to be a viable strategy for supporting the 

development of new renewable energy sources. While utility green power programs continue to 

exhibit strong growth in overall sales, current success can be attributed to a relatively small 

number of programs. 

The following is a summary of key findings from this analysis. 

Consumer Response 

• Despite a year in which electricity costs increased substantially throughout the country, 

sales of renewable energy through utility green power programs continued to exhibit 

strong growth. Collectively, utilities sold nearly 3 billion kilowatt-hours (kWh) of green 

power to more than 450,000 customers in 2005. A relatively small number of programs 

still account for the majority of utility green power sales and customers, with the top 10 

programs accounting for about 70% of sales and 65% of customers, similar to 2004. 

• In restructured electricity markets, both the number of customers and sales of renewable 

energy through utility/marketer programs more than doubled during 2005. This rapid 

growth may be attributed to the early stage of these programs as well as the fact that they 

are promoted by independent companies specializing in renewable energy marketing, 

which have a vested financial interest in their success. 

• In traditionally regulated electricity markets, sales through utility green pricing programs 

increased 33% following annual growth rates in excess of 40% in 2003 and 2004. The 

number of customers purchasing green power increased by 20%, a slower pace than 

sales. 

 

1

 For data on the entire voluntary renewable energy market, see Bird and Swezey (2005a). 

1
• The average participation rate across all green pricing programs increased slightly to 

1.5%. The top 10 utility green pricing programs exhibited participation rates ranging 

from 5% to 14%. 

• The fraction of customers dropping out of green pricing programs fell to a median of 5% 

in 2005 from nearly 9% in 2004, reversing a trend of increasing dropout rates in previous 

years. 

Renewable Energy Supplies

• In 2005, about one-third of utilities owned the renewable energy generation sources used 

to supply a significant portion of the energy sold to their green pricing customers. The 

remainder purchase renewable power or renewable energy certificates (RECs) from third 

parties to supply their programs. 

• The use of RECs continued to climb, with utilities purchasing more than 1 billion kWh of 

RECs to serve green pricing customers in 2005, nearly a 50% increase from 2004. RECs 

represented more than 40% of all green pricing sales in 2005. 

• The bulk of green pricing sales (87%) were sourced from “new”2 renewable energy 

facilities. Wind energy accounted for 76% of sales, followed by biomass (17%), hydro 

(4%), geothermal (3%), and solar (0.2%). 

• Renewable energy sales to green pricing customers represent a capacity equivalent of 

more than 740 MW of new renewable energy sources. 

Pricing and Revenues 

• The average price premium charged for green power through green pricing programs 

continued to decline, falling to 2.36¢/kWh in 2005 from 2.45¢/kWh in 2004. Since 2000, 

the premium has declined at an annual average rate of more than 7%. 

• A number of utilities reduced their green pricing premiums because of higher fossil fuel 

costs or because they were able to enter into more favorable contracts for renewable 

energy supplies. Several other utilities reported that renewable energy was offered at 

rates less than standard electricity service because their green power customers are 

exempt from rate increases resulting from fossil fuel cost changes. 

• Several utilities introduced lower price premiums for bulk purchases by large, 

nonresidential purchasers. 

• In 2005, residential customers paid less than $5 per month, on average, for green power 

through utility programs. This represents a decline from previous years that can be 

primarily attributed to reductions in premiums or programs that protect customers from 

fuel cost increases. 

Marketing 

• As might be expected, utility expenditures on marketing and administration for green 

power programs vary by utility size. Utilities with more than 500,000 customers reported 

a wide range of marketing expenditures, with one-third spending less than $50,000 and 

 

2

 New is defined as renewable resources placed in service or repowered after January 1, 1997, consistent with the 

definition used by the Green-e certification program http://www.green-e.org/what_is/standard/standard.html and 

other programs such as the Environmental Protection Agency’s Green Power Partnership. 

2
about 55% spending more than $100,000. Only six utilities reported spending more than 

$250,000 on marketing. 

• Utilities reported a median cost of $25 for acquiring new residential customers, down 

from $30 reported in previous years. The top performers3

 reported similar costs. 

• Fewer than half of utilities reported that nonparticipants pay some portion of green 

pricing program costs, down from two-thirds in 2004. The most common reason cited is 

that the utility spreads some of the marketing and administrative costs among all 

ratepayers. 

• On average, utilities used at least five different marketing techniques to publicize their 

green pricing program in 2005, while the top performers used an average of eight. 

• The marketing techniques that utilities ranked as most effective include bangtails,4

community challenges, bill inserts, door-to-door marketing, direct sales (to commercial 

accounts), direct mail, and publicity. As in the past, the techniques that received the 

highest scores for effectiveness from program managers are not necessarily the most 

commonly used. 

Program Implementation 

• Utilities ranked the following as among the most effective enrollment methods: mail-in 

cards, check boxes on the utility bill, and other strategies (enrolling customers through 

account representatives, retail partners, or phone contractors). 

• Fewer than one-third of utilities impose a minimum subscription requirement on their 

green pricing customers, with one year being the most common contract requirement. 

• Just more than half of utilities reported that they had conducted customer research to aid 

in the design or implementation of their green pricing programs; but only one-third of 

utilities reported performing a program evaluation, compared to about 60% of the top 

performers. 

• It is more common for top-performing utilities to provide additional program benefits, 

such as recognizing business customers in local media, recognizing other customers with 

plaques, providing decals for display in store windows, providing discounts or 

promotions at local businesses, protecting customers from fuel cost increases, and 

providing energy efficiency products. The top performers reported providing an average 

of six such benefits to program participants compared to three for all programs. 

 

3

 The top performers are defined as those that were among the top 10 programs for customer participants, green 

power sales, and customer participation rate, according to the NREL rankings (see Appendix C). 4

 Bangtails are advertisements that are attached to mail-in envelopes; they must be ripped off the envelope before it 

can be placed in the mail. 

3
Introduction 

Utilities first began offering consumers a choice of purchasing electricity generated from 

renewable energy sources in the early 1990s. Since then, the number of U.S. utilities offering 

green pricing programs has steadily grown. Today, more than 600 utilities—or about 20% of all 

utilities nationally—offer their customers green power options. Because some of these utilities 

offer programs in conjunction with cooperative associations or other public power entities, the 

number of distinct programs is about 130. Through these programs, more than 50 million 

customers have the ability to purchase renewable energy to meet some portion or all of their 

electricity needs, or make contributions to support the development of renewable energy 

resources. Typically, customers must pay a premium above standard electricity rates for this 

service. 

Since 1999, the National Renewable Energy Laboratory (NREL) has compiled data on utility 

green pricing programs on an annual basis. Initially, the data covered consumer response and 

program-design features, such as participation and retention rates, price premiums, program 

structures, enrollment requirements, and new renewable energy capacity installed to supply 

green pricing programs.5

 Beginning in 2002, NREL added data on marketing and program 

implementation, covering areas such as customer-acquisition costs, marketing strategies and 

budgets, program-evaluation efforts, procurement of supplies, and methods of enrolling and 

providing value to customers. 

In 2004 and 2005, the data collection efforts were expanded to include utility programs 

implemented in conjunction with independent marketers in restructured electricity markets. 

Because of significant differences in the design and implementation of these programs, data on 

programs offered in restructured markets are only included in estimates of total sales and 

customers, except as noted. All other data on pricing, program design, marketing, and 

implementation are for utility programs offered in traditionally regulated electricity markets 

only, which we refer to as “green pricing.” The 2002, 2003, and 2004 data are presented in detail 

in Bird et al. (2004), Bird and Cardinal (2004), and Bird and Brown (2005), respectively. 

This report presents detailed data on utility green pricing programs compiled for year-end 2005, 

and examines trends in consumer response and program implementation since 1999. The data 

provided in this report can also be used by utilities to benchmark the success of their green 

pricing programs. It is important to note that this report covers only a portion of voluntary 

markets for renewable energy. It does not cover green power sold by independent renewable 

energy marketers except for cases in which the marketers work in conjunction with utilities.6

 

Data Collection and Methodology 

The information presented in this report is based on data provided to NREL by utilities operating 

green power programs. In 2005, a questionnaire was distributed via e-mail to 140 green power 

program managers representing 129 individual green power programs (see Appendix A for the 

 

5

 The results are summarized in Swezey and Bird 1999; 2000. 

6

 For data on the entire voluntary renewable energy market, see Bird and Swezey 2005a. 

4
questionnaire and Appendix B for a list of utilities that offer green pricing programs). In a few 

instances, the questionnaire was distributed to several distribution utilities that participate in a 

single green pricing program offered through a generation and transmission cooperative or public 

power supplier. This was done because some power suppliers do not collect data from 

participating distribution utilities or are not able to provide data on marketing and program 

implementation. As in 2004, data were collected from a number of utility programs that are 

offered in conjunction with third-party marketers in states that have implemented retail 

competition. These responses were only included in the estimates of total utility green power 

customers and sales. Responses were received for 99 programs (93 in regulated markets, and 6 in 

competitive markets), yielding an overall active program response rate of 71%. The response 

rate, excluding programs offered in competitive electricity markets, was 70%. Where possible, 

data gaps were filled with information obtained from utility Web sites, follow-up phone calls, 

and published reports (Washington CTED/UTC 2005), as well as data received in previous 

years. 

 

Customer Participation 

Number of Customers 

 

At the end of 2005, more than 450,000 customers were participating in utility green power 

programs nationally, including programs offered in regulated and restructured electricity markets 

(Table 1).7 As in the past, a relatively small number of green power programs account for the 

majority of customers, with just 10 programs accounting for 65% of all participants (Appendix 

C).8 

Table 1: Number of Participants in Utility Green Power Programs (in Regulated and Competitive 

Electricity Markets) 

2004 2005 % Change

Utility Green Pricing Programs in Regulated Markets 331,800 394,700 19%

Utility Programs in Restructured Electricity Markets 29,400 60,800 107%

Total 361,200 455,500 26%

The number of customers participating in utility/marketer programs in restructured electricity 

markets more than doubled during 2005. These programs differ from utility programs offered in 

traditionally regulated electricity markets in that they involve independent marketers working in 

conjunction with the incumbent utilities (or default service providers) to offer renewable energy 

products to retail consumers. Under these programs, customers can purchase green power 

without switching from default or standard offer service. Examples include the Connecticut 

CleanEnergyOptions program and the National Grid GreenUp program. In general, these 

 

7

 NREL obtained consumer response data for about 70% of utility green pricing programs in 2005, including all of 

the major programs. The remaining programs, which are smaller in size, do not have a large impact on overall 

participant numbers. 

8

 NREL issues four different Top 10 lists based on total sales of renewable energy to program participants, total 

number of customer participants, customer participation rates, and the premium charged to support new renewables 

development. These lists can be found at http://www.eere.energy.gov/greenpower/markets/pricing.shtml?page=3. 

5
programs are relatively young, which may partially explain the high growth rates. Furthermore, 

the fact that these programs are primarily promoted by companies specializing in renewable 

energy marketing and financially vested in the success of the programs may also explain their 

rapid growth. 

Table 2 presents the number of customers participating in utility green pricing programs offered 

in traditionally regulated electricity markets since 1999. From 1999 to 2005, the number of 

customer participants increased nearly sixfold, with growth rates during the past several years 

ranging from 16% to 25%. 

Table 2: Estimated Cumulative Number of Customers Participating 

in Utility Green Pricing Programs (Regulated Electricity Markets Only) 

Customer Segment 1999 2000 2001 2002 2003 2004 2005 

Residential n/a* 131,000 166,300 224,500 258,700 323,700 383,400

Nonresidential n/a* 1,700 2,500 3,900 6,500 8,100 11,300

Total 66,900 132,700 168,800 228,400 265,000 331,800 394,700

% Total Annual Growth n/a 98% 27% 35% 16% 25% 19% 

% Residential Growth n/a n/a 27% 35% 15% 25% 18% 

% Nonresidential Growth n/a n/a 47% 56% 67% 25% 40% 

*Information on customer segments was not collected in 1999. 

Table 2 delineates residential and nonresidential customer participation in utility green pricing 

programs over time. The vast majority of participants are residential customers, with 

nonresidential customers accounting for only 3% of all participants. During 2005, the number of 

residential and nonresidential customers grew at different rates, with the nonresidential sector 

growing by 39% and the residential sector by 18%. This finding is consistent with sector-specific 

growth rates in previous years, with the exception of 2004 when both residential and 

nonresidential customers grew by about 25%. This trend of increasing nonresidential purchasers 

is having a significant impact on overall sales volume, as the nonresidential purchasing quantities 

can be quite large as compared to residential purchases. 

Table 3 presents summary statistics on the number of customers participating in green power 

programs, including programs in regulated and competitive electricity markets. The full range of 

utility sizes and program sizes is represented, illustrating that half of available programs in 2005 

had fewer than 1,600 participants, and the top 25% of programs, or 75th percentile (in terms of 

participants) had greater than 4,300 participants. While the average number of customers from 

2004 to 2005 increased, the quartile distribution change illustrates an increased number of 

programs with fewer participants. This may reflect a larger number of programs offered by 

smaller utilities. 

6
Table 3: Number of Customer Participants by Program, 2004-2005 

2004 2005

25th percentile 400 400

50th percentile 1,900 1,600

75th percentile 4,600 4,300

Average of all programs 4,400 4,800

Total Respondents 76 102

In 2005, four programs had sold all of the green power available under the program and were no 

longer actively seeking new customers—this was an increase from two fully subscribed 

programs in 2004. Three of these programs maintain waiting lists. 

Participation Rates 

At the end of 2005, the average rate of participation in utility green pricing programs among 

eligible utility customers was 1.5%, with a median of 1.0% (Table 4 and Table 5), These 

industry-wide rates have shown very little change in recent years. The 10 programs with the 

highest participation rates achieved participation rates of between 5% and 14% in 2005, 

compared to 3% to 6% in 2002 (Appendix C).9

 Although the upper end of the range remains 

above 10%, average participation rates remain well below penetration rates predicted by utility 

market research surveys (Farhar 1999). 

Some possible explanations for the lack of improvement in overall participation rates include: 1) 

a general lack of awareness among customers, 2) lack of sustained marketing efforts on the part 

of some utilities, 3) a discrepancy between what customers report in surveys and what they 

actually do when presented with an option, 4) poor value propositions or product quality, and 5) 

the addition of new programs each year, which are averaged with the performance of more 

established programs (Holt and Holt 2004, Swezey and Bird 2001). 

Table 4: Customer Participation Rates in Utility Green Pricing Programs 

Participation 

Rate 1999 2000 2001 2002 2003 2004 2005 

Average 0.9% 1.2% 1.3% 1.2% 1.2% 1.3% 1.5% 

Median 0.8% 0.7% 0.7% 0.8% 0.9% 1.0% 1.0% 

Top 10 

programs 

2.1%-

4.7%* 

2.6%-

7.3% 

3.0%-

7.0% 

3.0%-

5.8% 

3.9%-

11.1% 

3.8%-

14.5% 

4.6%-

13.6% 

*Data for April 2000

 

9

 From 2000 to 2002, the high end of the range declined because the utility with the highest participation rate 

(Moorhead Public Service) experienced an increase in its overall customer base, while the number of participants in 

its green pricing program remained steady. The program was fully subscribed in 2000, and the utility has not 

attempted to expand it. Likewise, the high end of the range declined from 2004 to 2005, because the number of 

participants in the Lenox Municipal Utilities green power program essentially remained constant, while its customer 

base increased. 

7
Table 5: Customer Participation Rates in Utility Green Pricing Programs, 2004-2005 

Participation Rate 2004 2005 

25th Percentile 0.3% 0.4% 

50th Percentile (Median) 1.0% 1.0% 

75th Percentile 1.4% 1.8% 

Table 6 shows that across all utilities, the average participation rate for green pricing programs 

in 2005 for residential and nonresidential customers was 1.6% and 0.7%, respectively. Median 

participation rates were 1.2% and 0.2%, respectively (Table 7). The lower participation rates 

among nonresidential customers may be explained, in part, by the fact that some programs place 

less emphasis on the nonresidential sector. Also, nonresidential customers as a whole may be 

more price-sensitive and perhaps less willing to pay a premium than residential consumers. 

Table 6 reveals slight differences in average participation rates among programs offered by 

investor-owned utilities (IOUs), municipal or public utilities, and cooperatives. Although IOU 

participation rates have increased over time, IOUs still reported the lowest average participation 

rates among all utility types. However, the differences diminish or disappear when the median 

rates are compared. 

Table 6: Average Green Pricing Participation Rates by Utility Type 

Utility 

Type 

Number of 

Responses 

Residential 

Customers 

Average (%) 

Nonresidential 

Customers 

Average (%) 

All Customers 

Average (%) 

’03 ‘04 ‘05 ’03 ‘04 ‘05 ’03 ‘04 ‘05 ’03 ‘04 ‘05 

All Utilities 75 80 89 1.4 1.4 1.6 0.5 0.4 0.7 1.2 1.3 1.5 

Co-ops 13 13 17 1.7 1.7 1.7 0.6 0.6 0.7 1.6 1.5 1.5 

Public 36 38 45 1.5 1.6 1.7 0.5 0.5 0.9 1.3 1.4 1.6 

Investorowned 26 29 27 1.0 1.1 1.3 0.3 0.3 0.3 0.8 1.0 1.2 

Table 7: Median Green Pricing Participation Rates by Utility Type 

Utility 

Type 

Number of 

Responses 

Residential 

Customers 

Median (%) 

Nonresidential 

Customers 

Median (%) 

All Customers 

Median (%) 

’03 ‘04 ‘05 ’03 ‘04 ‘05 ’03 ‘04 ‘05 ’03 ‘04 ‘05 

All Utilities 75 80 89 1.0 1.1 1.2 0.2 0.2 0.2 0.9 1.0 1.0 

Co-ops 13 13 17 1.1 1.2 1.2 0.01 0.1 0.3 1.0 1.0 1.0 

Public 36 38 45 1.1 1.1 1.1 0.2 0.2 0.2 0.2 0.8 1.0 

Investorowned 26 29 27 0.9 1.0 1.2 0.1 0.1 0.1 0.7 0.9 1.0 

8
Retention of Customers 

In 2005, utilities reported that an average of 6.5% and a median 5.1% of customers dropped out 

of green pricing programs, reversing the trend of increasing rates during the past several years 

(Table 8). This finding is somewhat surprising in a year in which customers throughout the 

country faced higher electricity and energy prices. Although the reason for the improvement in 

customer retention is not clear, this finding suggests that customers tend to be “sticky” and 

maintain participation in green power programs, despite other cost increases. 

Historically, utilities that have reported higher-than-average turnover rates among green power 

customers cite high turnover among all utility customers; for example, several of these utilities 

have service territories that include large universities where high customer turnover is recurrent. 

One utility also cited particularly high attrition rates after announcing plans to build a new coalfired power plant, which regional environmental organizations opposed. And a few utilities have 

experienced higher-than-average decreases in enrollment as a result of general rate increases. 

One effective strategy for reducing attrition is retaining customer participants in the program 

when they move within the utility service territory. Also, continuing to communicate the success 

and benefits of the program to consumers may help alleviate problems with attrition. Consumers 

may need to be reminded periodically of the value of the program and the impact that their 

expenditures have had. Finally, offering benefits such as exempting customers from fossil fuel 

cost increases may help retain customers. 

Table 8: Fraction of Customers Dropping Out of Green Pricing Programs 

2002 2003 2004 2005 

Median 2.5% 6.6% 8.8% 5.1% 

Average 4.3% 7.1% 9.8% 6.5% 

Renewable Energy Sales and Supplies 

Green Power Sales and Revenues 

Collectively, utilities sold nearly 3 billion kilowatt-hours (kWh), or about 313 average 

megawatts (aMW), of green power to customers in 2005 (Table 9). Sales of renewable energy 

through utility programs in competitive electricity markets more than doubled during 2005. The 

fact that these programs are implemented in conjunction with competitive marketers specializing 

in renewable energy marketing—and that many are relatively young—may explain the 

significantly higher growth rates. 

The 10 top-performing green pricing programs represented 71% of total sales, with one program 

(Austin Energy) accounting for 16% of all sales (Appendix C). Austin Energy’s sales success 

stems from the fact that it allows customers to lock in the price of green energy at a fixed rate for 

up to 10 years, which has been particularly popular among nonresidential customers. Overall, 

9
nonresidential customers represented about 3% of customers, but represented about one-third of 

total program sales. 

Table 9: Sales of Renewable Energy through Utility Green Power Programs in Regulated and 

Competitive Electricity Markets (million kWh) 

2004 2005 % Change

Utility Green Pricing Programs in Regulated Markets 1,839 2,448 33%

Utility Programs in Competitive Electricity Markets 136 291 114%

Total 1,975 2,738 39%

Table 10 presents sales of renewable energy through utility green pricing programs in regulated 

electricity markets over time. Green pricing program sales to all customer classes grew by 33% 

in 2005, compared to rates in excess of 40% during the past several years. The growth in sales 

can be attributed to the larger number of customers purchasing green power as well as larger 

purchases by nonresidential customers (Table 11). On average, residential customers purchased 

an average of about 4,200 kWh of green power annually in 2005, while nonresidential customers 

purchased nearly 75,000 kWh.10 Average purchases by residential customers have increased 

substantially since 2001 from 2,400 kWh per year to 4,200 kWh per year. This increase is likely 

due to a larger number of programs that require customers to purchase green power for 100% or 

a more substantial fraction of their electricity use, as well as decreases in the price of green 

power. 

Table 10: Annual Sales of Green Energy through Utility Green Pricing Programs (Regulated 

Electricity Markets Only), millions of kWh 

2000 2001 2002 2003 2004 2005

Sales to Residential Customers * 400 661 874 1,295 1,606

Sales to Nonresidential Customers * 173 234 410 544 842

Total Sales to All Customers 454 573 895 1,284 1,839 2,448

% Annual Growth in Total Sales * 26% 56% 43% 43% 33%

% Nonresidential of Total Sales * 30% 26% 32% 30% 34%

*Sales information for customer segments not available for 2000.

Table 11: Average Purchases of Green Energy Per Green Pricing Customer (kWh/year) 

2001 2002 2003 2004 2005

Residential Customers 2,400 2,900 3,400 4,000 4,200

Nonresidential Customers 69,200 60,000 63,100 67,200 74,500

All Customers 3,400 3,900 4,800 5,500 6,200

 

10 Note that estimates of average purchases have been revised for years 2002 to 2004 for those reported in Bird and 

Brown (2004), which were averaged across utility programs. Estimates presented here are calculated based on total 

sales and customer participants. 

10
11

Table 12 presents the summary statistics for the kilowatt-hour sales of renewable energy through 

utility programs in regulated and competitive markets. In 2005, 25% of programs sold more than 

26 million kWh of green power annually, while half sold more than 4 million kWh. The increase 

in the average, and the decrease in the quartile values between 2004 and 2005, indicate an 

increasing number of smaller programs responding. 

Table 12: Renewable Energy Sales through Utility Programs (million kWh) 

2004 2005

25th percentile 0.8 0.7

50th percentile 5.5 4.4

75th percentile 21.5 26.1

Average 25.0 29.1

Total Respondents 74 94

Renewable Energy Resources Supplying Green Pricing Programs 

Most programs use new renewable energy sources to supply their green pricing programs, with 

87% of sales supplied from new renewable energy facilities.11 Of total sales, wind resources 

supplied 76%, followed by biomass including landfill gas (17%), hydro (4%), geothermal (3%), 

and solar (0.2%) (Table 13). Despite the relative contribution to total sales, wind, solar, and 

landfill gas are the renewable resources most commonly used to supply green pricing programs. 

For example, many utilities offer products that include some solar, but the contribution of solar 

to the total green power program resource mix on a generation basis is generally small. 

Renewable energy sold through green pricing programs in 2005 represents an equivalent 

renewable energy capacity of nearly 800 MW, with more than 740 MW of this represented by 

new renewable energy resources.12 Wind energy represents nearly 90% of the total capacity 

supplying green pricing programs. 

Table 13: Renewable Energy Sources Supplying Green Pricing Programs, 2005 

Landfill 

Gas Digesters Wood Geother

-mal Hydro Solar Wind Total 

Sales MWh 323,000 28,000 63,000 72,000 97,000 6,000 1,859,000 2,448,000

% of Total Sales 13.2% 1.2% 2.6% 2.9% 3.9% 0.2% 76.0% 100%

% New 59% 100% 88% 4% 12% 100% 99% 87.3%

Capacity Factor 90% 90% 80% 90% 50% 20% 30% n/a

Total MW 41.0 3.6 9.0 9.1 22.0 3.4 707.4 795.5

MW New RE 24.1 3.6 7.9 0.3 2.6 3.4 701.7 743.7

 

11 New is defined as renewable resources placed in service or repowered after January 1, 1997, consistent with the 

definition used by the Green-e certification program http://www.green-e.org/what_is/standard/standard.html and 

other programs such as the Environmental Protection Agency’s Green Power Partnership. 

12 Capacity factors are derived from EPRI and U.S. DOE Renewable Energy Technology Characterizations, TR109496, December 1997. 
In previous years, capacity estimates were based on renewable energy projects used to serve 

green pricing programs, rather than derived from renewable energy sales.13 Therefore, the 2005 

estimated capacity is not directly comparable to capacity estimates from previous years (see 

Table 14). However, the two approaches yield relatively consistent results. 

Table 14: Estimated Cumulative Capacity Supplying 

Utility Green Pricing Programs, 1999-2004 

1999 2000 2001 2002 2003 2004 

Cumulative MW 68 77 221 279 510 706 

Annual Growth % -- 14% 188% 26% 82% 38% 

While many programs use blends of renewable energy sources, nearly half of all programs 

feature only one energy source. Of those that feature one resource, most feature wind, while a 

handful feature solar or biomass. The remaining programs offer a blend of two or more 

resources.

Green Energy Sales vs. Total Utility Sales 

Green energy sales still represent a small but increasing proportion of a utility company’s overall 

energy sales. Table 15 shows that, on average, sales through green pricing programs represented 

about 0.5% of total utility electricity sales in 2005, with about 0.9% of residential electricity 

sales and 0.2% of nonresidential electricity sales in the same year. These fractions have increased 

steadily during the past few years (Table 16). Half of programs reported green power sales of 

0.2% of total electricity sales or more. The most successful utility programs reported green 

energy sales of about 4% of total retail electricity sales. 

Table 15: Green Energy Sales as a Percent of Utility Electricity Sales, 2005 

Customer 

Class Average 25th Percentile Median 

(50th Percentile) 75th Percentile Range 

Residential 0.89% 0.08% 0.34% 0.84% 0%-13.7% 

Nonresidential 0.23% 0.00% 0.04% 0.20% 0%-4.8% 

All customers 0.48% 0.06% 0.2% 0.49% 0%-4.0% 

 

13 For details on the derivation of these estimates, see Bird and Swezey 2005b. 

12
13

Table 16: Average, Median, and Range Green Energy Sales as a Percent of Utility Electricity Sales 

 

 2003 2004 2005 

Customer 

Class Avg. Med. Range Avg. Med. Range Avg. Med. Range 

Residential 0.30% 0.02% 

0.0%-

3.6% 0.70% 0.40% 

0%-

10.2% 

 

0.89% 0.34% 

0%-

13.7% 

Nonresidential 0.10% 0.00% 

0.0%- 

2.9% 0.20% 0.02% 

0%- 

3.7% 

 

0.23% 0.04% 

0%-

4.8% 

All customers 0.20% 0.04% 

0.0%-

3.2% 0.40% 0.20% 

0%- 

3.2% 

 

0.48% 0.2% 

0%-

4.0% 

On average, residential customers spent about $4.50 per month to purchase or support green 

power through utility programs in 2005, the lowest recorded average expenditures (Table 17). 

This decline in expenditures is primarily due to a number of programs that reduced the price of 

renewable energy for customer participants. In fact, this decrease in average monthly expenditure 

coincides with an increase in average residential purchase quantities. 

Utility green pricing programs collected an estimated $25 million in green power revenues in 

2005 (Table 17). Although total renewable energy sales grew in 2005, revenues declined 

because a number of programs lowered the premiums charged for their green power products. 

Green pricing program revenues are typically used to pay the above-market costs of renewables, 

as well as the costs of administering and marketing the program—although the treatment of the 

latter differs by utility (see discussion in the Marketing section of Holt and Holt 2004, Swezey 

and Bird 2001). 

Table 17: Residential Monthly Expenditures on Green Power and Annual Program Revenues 

2002 2003 2004 2005 

Average monthly residential expenditures $4.80 $5.50 $5.30 $4.49 

Annual utility revenues from green power $15 million $20 million $32 million $25 million 

Ownership vs. Purchases of Supplies 

About 25% of utilities supply their green pricing programs entirely from their own renewable 

energy generation facilities, compared to 21% in 2004 and 31% in 2003 (Table 18). Another 

59% of utilities either purchase all of their power from an independent power generator or 

purchase renewable energy certificates (RECs) from a marketer or supplier. The remaining 

utilities use a combination of these approaches to supply their green power programs. Generally, 

the data show a movement away from project ownership and an increased reliance on REC 

purchases. Between 2003 and 2005, the fraction of utilities that purchased RECs for all of their 

green pricing program supplies increased from 18% to 32%. In addition, the fraction of utilities 

that owned their own generation for any portion of program supplies dropped. 
Also, about 9% of utilities reported using customer-owned renewable energy sources, such as 

customer-sited solar systems, to supply a portion of their green power program. This question 

was only asked in 2005. 

Table 18: Utility Procurement of Renewable Energy Supplies 

Utilities that Own 

Generation 

Utilities that 

Purchase Power 

Utilities that 

Purchase RECs 

Fraction of Supplies 2003 2004 2005 2003 2004 2005 2003 2004 2005 

For 100% of program power 

supplies 31% 21% 25% 32% 32% 27% 18% 30% 32% 

For at least 50% of program power 

supplies 39% 25% 32% 42% 40% 42% 20% 33% 35% 

For any fraction of program power 

supplies 49% 33% 43% 47% 48% 47% 24% 36% 35% 

Note: Percentages based on 74 responding programs in 2003, 84 programs in 2004, and 80 programs in 2005. 

Collectively, utilities purchased more than 1 billion kWh of RECs to serve green power 

customers in 2005, which represents 42% of all green power sold through utility green pricing 

programs (Table 19). RECs purchases grew by 46% in 2005, down from 69% in 2004, and 

300% in 2003. 

Table 19: REC Purchases by Utilities to Supply Green Pricing Programs 

2002 2003 2004 2005 

REC purchases by utilities for green 

pricing programs (million kWh) 103 419 707 1,030 

REC purchases as percent of total 

green pricing sales 11% 33% 38% 42% 

Data from 2005 also suggest that RECs are being used in wider geographic regions. In 2003, 

about three-quarters of utilities that supplied their programs with RECs were in the Pacific 

Northwest; in 2005, about half of the utilities using RECs were in the Pacific Northwest. Utilities 

that reported purchasing RECs for some portion of their program supplies in 2005 covered 10 

states, including California, Colorado, Florida, Idaho, Montana, New Mexico, Oregon, Utah, 

Vermont, and Washington. 

Product Type 

Most utility green pricing programs are structured so that customers can purchase renewable 

energy to meet some or all of their electricity needs. The green power premium charged in these 

“energy-based” programs is typically expressed in ¢/kWh or $/kWh block. Other programs are 

structured to allow customers to contribute funds that support the development of renewable 

14
energy sources. These so-called “contribution programs” have become less common, and 

currently represent less than 10% of all programs. Finally, a few utilities have offered programs 

through which customers make a monthly payment tied to the amount of renewable energy 

capacity that is supported (“capacity-based programs”). For example, customers might be offered 

the option to pay $6 each month to support 100 watts of solar energy-generating capacity. 

Capacity-based programs are no longer actively marketed and, in some cases, have been phased 

out in favor of energy-based or contribution programs. 

Energy Blocks vs. Percentage of Use 

About two-thirds of energy-based programs are structured so that customers can purchase blocks 

of green power. Block sizes range from 15 kWh (for energy derived exclusively from solar 

systems) to 1,000 kWh (for wind energy or renewable energy blends). The most common block 

size offered to residential customers is 100 kWh. Many utilities offer larger block sizes to 

nonresidential customers, and some offer customers the option of purchasing green power for all 

of their electricity use. 

The remaining programs allow customers to purchase green power for some fraction of their 

electricity needs. Most of these programs allow residential customers to elect to have 25%, 50%, 

or 100% of their electricity supplied from renewable sources, while a few offer fractions as small 

as 10%. Often, commercial and industrial customers can purchase green power for a smaller 

fraction of their electricity use. 

Regarding the question of whether it is better to offer a percent-of-use option or kWh-blocks, 

some marketers have argued that it is difficult to communicate the concept of a kWh-block to 

consumers, because customers do not understand kWh and are not used to thinking about them. 

Some marketers have found that this is a significant barrier to enrolling customers. They argue 

that consumers can more easily understand a product that is presented as a percentage of 

electricity use. On the other hand, selling blocks of renewable energy may provide additional 

flexibility to consumers to enable them to purchase smaller increments (although this could also 

be accomplished by offering a small percent-of-use option). Another potential benefit for 

customers of purchasing blocks is that the green power premium remains fixed for the customer 

each month and does not vary along with electricity consumption. 

A statistical analysis of green pricing data found that utilities that offer larger blocks (at least 200 

kWh) or higher percentages (at least 25%) tend to have greater sales to residential customers, 

with no obvious impact on the overall level of customer participation (Wiser et al. 2004). In 

other words, customers may be willing to purchase higher quantities of renewable energy, if that 

is what is required to participate in the program. However, this effect may not hold for very high 

purchase thresholds. 

15
Pricing 

In 2005, price premiums for energy-based programs ranged from -0.67¢/kWh to 17.6¢/kWh, 

with an average premium of 2.36¢/kWh and a median of 2¢/kWh. Figure 1 displays price 

premiums for individual utility 

programs—solar-based products 

dominate the high end of the price 

range. In 2005, the utility programs 

with the lowest premiums for 

energy derived from new 

renewable sources had premiums 

ranging from -0.67¢/kWh to 

0.91¢/kWh. 

Figure 1: Utility Green Pricing Program Premiums 

(Energy-Based Programs Only) 

-2

0

2

4

6

8

10

12

14

Median = 2.0 ¢/kWh 

17.6 ¢/kWh

In 2005, price premiums continued 

to decline, decreasing about 4% 

from 2004. Since 2000, the average 

price premium has dropped at an 

average annual rate of about 7.5%. 

The median premium remained at 

2.0¢/kWh between 2004 and 2005 

(Table 20). 

Table 20: Price Premiums of Utility Green Power Products 

(¢/kWh) 

1999 2000 2001 2002 2003 2004 2005 

Average Premium 2.15 3.48 2.93 2.82 2.62 2.45 2.36 

Median Premium 2.00 2.50 2.50 2.50 2.00 2.00 2.00 

Range of Premiums 0.4-5.0 (0.5)-20.0 0.9-17.6 0.7-17.6 0.6-17.6 0.33-17.6 (0.67)-17.6 

10 Programs with 

Lowest Premiums* 0.4-2.5** (0.5)-2.5 1.0-1.5 0.7-1.5 0.6-1.3 0.33-1.0 (0.67)-0.91 

Number of Programs 

Represented 24 50 60 80 91 101 104 

*Represents the 10 utility programs with the lowest price premiums for new customer-driven renewable energy. This includes only programs 

that have installed – or announced firm plans to install or purchase power from – new renewable energy sources. In 2001, the discrepancy 

between the low end of the range for all programs and the top 10 programs results from the program with the lowest premium (0.9¢/kWh) 

not being eligible for the top 10, because it was either selling some existing renewables or had not installed any new renewable capacity for 

its program. 

**Data for April 2000.

During 2005, 10 programs modified the price premium charged for green power, with most 

resulting in a premium decrease. Programs with fuel adjustment exemptions had changes in 

premium paid, and several programs made minor adjustments to the structure of their premiums 

that had little impact on the size of the premium paid. 

16
For those utilities that reduced their premiums, most attributed the reduction to the exemption of 

green power customers from fossil fuel charges or their ability to renegotiate power purchase 

contracts at lower rates. Other reasons that have contributed to the decline in premiums over time 

are the availability of state or federal financial incentives, higher than expected capacity factors, 

and natural gas price increases, which have reduced the cost spread between renewable energy 

and gas-fired generation. 

Table 21 presents green pricing premiums by utility type for the past several years, while 

additional data on premiums in 2005 are shown in Table 22. IOUs have the highest average 

price premium at 3.09¢/kWh, while cooperatives and public utilities have lower average 

premiums at 1.90¢/kWh and 2.20¢/kWh, respectively. Some of the differences among utility 

types may result from a greater tendency of IOUs to include program administration and 

marketing costs in the premium, or to seek recovery of program costs over a shorter period of 

time. The higher average premium calculated for investor-owned utilities may also stem from the 

fact that several IOUs offer solar-based programs with relatively high premiums, on the order of 

10¢/kWh or higher. 

Table 21: Green Pricing Premiums by Utility Type, 2003-2005 

(¢/kWh) 

2003 2004 2005 

Type of 

Utility Avg. Med. Range Avg. Med. Range Avg. Med Range

Investorowned 3.36 2.04 0.6-

17.6 3.14 2.00 0.3- 17.6 3.09 1.92 (0.67)-17.6 

Public 2.30 2.00 0.6-

11.6 2.24 2.00 0.5- 11.6 2.20 2.00 (0.45)-11.60 

Co-op 2.34 2.50 0.9- 

3.5 2.00 1.85 0.5- 3.5 1.90 1.90 0.50-3.50 

All Utilities 2.62 2.00 0.6- 

17.6 2.45 2.00 0.3- 17.6 2.36 2.00 (0.67)-17.6 

Table 22: Green Pricing Premiums by Utility Type, 2005 

(¢/kWh) 

Type of Utility Average 25th

Percentile Median 75thPercentile Range 

Investor-owned 3.09 0.98 1.92 3.21 (0.67)-17.6 

Public 2.20 1.50 2.00 2.74 (0.45)-11.60 

Co-op 1.90 1.50 1.90 2.50 0.50-3.50 

All Utilities 2.36 1.40 2.00 2.65 (0.67)-17.6 

17
About 10 programs offer lower green energy premiums to nonresidential customers, offering 

bulk purchase discounts for large green power purchasers.14 In these programs, the premium 

charged to nonresidential customers is generally about 0.5¢/kWh to 2¢/kWh less than the 

residential green energy premium. 

Because most renewable energy facilities do not rely on fuel, some utilities offer fixed-price 

green power products or exempt their green power customers from some fuel-cost charges. A 

number of utilities include this feature as a component of their green pricing product.15 One of 

these utilities also exempts green power customers from the costs associated with making 

environmental improvements at some of its fossil fuel-generating facilities. Exempting 

customers from fossil fuel costs can be a particularly important strategy for enrolling large 

nonresidential customers with larger energy needs, as evidenced by the success of Austin 

Energy, which accounts for nearly 16% of all utility green pricing sales nationwide. 

Marketing 

Marketing and Administration Spending 

As one might expect, spending on marketing and administration for green power programs 

generally varies with size of the utility; however, some large utilities spend relatively little on 

marketing. In 2005, about three-quarters of the utilities serving fewer than 100,000 customers 

spent less than $10,000 annually on marketing (excluding staff time), with the remaining utilities 

potentially spending as much as $50,000. Of midsized utilities ranging from 100,000 to 499,999 

customers, the majority spent $10,000 to $50,000, with just two utilities spending more than 

$250,000, and about one-third spending less than $10,000. Of the large utilities with more than 

500,000 customers, there was a wider range of marketing expenditures reported. One-third of 

large utilities spent less than $50,000 on marketing, while about half spent more than $100,000. 

The top performers16 represent a higher percentage of the higher marketing expenditures 

(Table 23). 

With respect to program-administration spending, the data reflect the same general trends as with 

marketing expenditures (Table 24). Of the small utilities serving fewer than 100,000 customers, 

about 90% spent less than $10,000 on administration (including staff time), with the remainder 

spending up to $100,000. Of the midsized utilities ranging from 100,000 to 499,999 customers, 

most spent $10,000 to $50,000 on program administration, with about 10% spending more than 

$100,000. The largest utilities serving more than 500,000 customers reported a wide range of 

expenditures on administration, similar to the marketing data. More than half of the large utilities 

spent more than $100,000 on administration, while about a third spent less than $50,000. 

 

14 The utilities include: Continental Cooperative Services/Soyland, Midstate Electric Cooperative, North Carolina 

utilities participating in NC Green Power Program, PacifiCorp, Portland General Electric, Puget Sound Energy, Salt 

River Project, We Energies, and Wisconsin Public Power Inc. 

15 The utilities include: Austin Energy, Alliant Energy, Clallum County PUD, Edmond Electric, Eugene Water and 

Electric Board, Green Mountain Power, Holy Cross Energy, Madison Gas & Electric, OG&E Electric Services, We 

Energies, and Xcel Energy. 

16 The top performers are defined as those that were among the top 10 programs for customer participants, green 

power sales, and customer participation rate, according to the NREL rankings (see Appendix C). 

18
Table 23: Utility Expenditures on Marketing in 2005 (Excluding Staff Time) 

Number of Responses Number of Utility 

Customers Less than 

$10,000 

$10,000-

$50,000 

$50,000-

$100,000 

$100,000-

$250,000 

$250,000-

$500,000 

Total 

Responses 

1-99,999 35 6 0 0 0 41 

100,000-499,999 7 13 0 0 2 22 

500,000-999,999 2 1 2 2 2 9 

1,000,000+ 2 1 0 4 2 9 

Total Respondents 46 21 2 6 6 81 

Top Performers/ 

% All Respondents 2/4% 3/14% 1/50% 4/67% 3/50% 13/16% 

Table 24: Utility Expenditures on Program Administration in 2005 (Including Staff Time) 

Number of Responses 

Number of Utility 

Customers 

Less 

than 

$10,000 

$10,000-

$49,999 

$50,000-

$99,999 

$100,000-

$249,000 

$250,000-

$499,999 

$500,000 – 

$750,000 

Total 

1-99,999 36 4 1 0 0 0 41 

100,000-499,999 3 10 4 2 0 0 19 

500,000-999,999 3 2 2 1 0 1 9 

1,000,000+ 2 1 1 5 1 0 10 

Total 

Respondents 44 17 8 8 1 1 79 

Top Performers/ 

% Total 

Respondents 

3/7% 3/18% 1/13% 5/63% 0/0% 1/100% 13/16% 

In 2005, utilities reported that a median of 2% (average of 15%) of the total green power 

premium was spent on marketing and program administration (Table 25),17 while the topperforming programs reported spending a median of 23% and an average of 29%. A number of 

utilities, primarily public utilities and cooperatives, reported that no portion of the premium was 

used for marketing and administration. For some utilities, this is because they use overall utility 

marketing dollars to advertise the program and do not include these costs in the program 

premium, whereas others are not actively promoting their programs. The decline in the fraction 

of the premium attributed to marketing costs may reflect a slowdown in marketing activities by 

some utilities. 

 

17 In 2002, utilities reported spending a median of 15% (average of 20%) of their program budgets on marketing. It 

is not possible to compare responses for 2002 and 2003/2004, because the questions differed. 

19
Table 25: Marketing and Administrative Expenditures as Percentage of Premium, 2005 

2003 2004 2005 

Average 17% 20% 15% 

Median 5% 9% 2% 

No. of Responses 36 60 59 

Thirty-eight programs (54%) indicated that program participants cover all costs associated with 

the green pricing program. Of the remaining 32 programs in which nonparticipants cover some 

costs, most program managers explained that some marketing and administrative costs were not 

attributed to the program (i.e., spread among all ratepayers). The other most commonly cited 

reasons were that the green pricing program received grants or other contributions, and that the 

utility spread the cost of unsold renewable energy among all ratepayers (Table 26). Results were 

similar in 2003 and 2004. 

Table 26: Explanation of Costs Born by Nonparticipants, 2005 

Number of 

Responses

Some marketing and administrative costs shared by all ratepayers (or 

not attributed to the green pricing program) 23 

The program receives grants, public goods funds, subsidies, or other 

contributions 3 

The utility spreads the cost of unsold renewable energy among all 

ratepayers 1 

70 programs responded, and 33 programs provided explanations; not all explanations are accounted for in 

this table. 

Customer Acquisition 

One measure of the cost of marketing a green pricing program is customer-acquisition cost—the 

marketing expenditures divided by the number of new customers that enroll in the program. For 

2005, utilities providing data reported median and average residential customer-acquisition costs 

for green pricing programs of $25 and $43, respectively (Table 27).18 However, the responses 

varied widely, ranging from $0 to more than $300 (Figure 2). The top-performing programs 

reported median and average residential customer-acquisition costs of $27 and $31, respectively. 

 

18 Only about half of the utilities provided this information. The relative lack of responses may be resultant of some 

utilities not tracking customer-acquisition costs. 

20
Table 27: Residential Customer-Acquisition Costs by Year 

2002 2003 2004 2005 2004 Top 

Performers 

2005 Top 

Performers 

Average $44 $36 $42 $43 $48 $31 

Median $30 $31 $30 $25 $40 $27 

No. of Respondents 25 22 43 45 18 10 

$0

$50

$100

$150

$200

$250

$300

$350

$400

Median = $25

Figure 2: Customer-Acquisition Costs, 2005 

Table 28: Residential Customer-Acquisition Costs by Utility Size 

2003 2004 2005 Size of 

Utility Avg. Median No. 

Resp. Avg. Median Num. Resp. Avg. Median No. Resp. 

1-99,999 

Customers $10 $5 7 $12 $4 12 $27 $14 21 

100,000-

499,999 

Customers 

$46 $40 7 $56 $35 13 $97 $41 9 

500,000-

999,999 

Customers 

$44 $38 4 $60 $55 9 $40 $28 7 

1,000,000 

Customers $57 $46 4 $41 $36 9 $29 $30 8 

All 

Utilities $36 $31 22 $42 $30 43 $43 $25 45 

Customer-acquisition costs differed considerably depending on the size of the utility (Table 28), 

with utilities serving more than 100,000 customers reporting higher customer-acquisition costs 

than smaller utilities. Some of the variability may be due to the types of costs that the utilities 

21
included in the calculation. For example, some utilities do not attribute all of the costs of 

marketing and administration to the program, which would lead to lower per-customer costs. 

Also, large utilities may have the resources to track expenditures more closely. And small 

utilities tend to rely on bill inserts and are less creative in targeted marketing. 

Marketing Techniques Employed 

The 2005 questionnaire asked respondents to indicate the various marketing techniques applied 

to their green pricing programs (Table 29). As in previous years, advertising programs through 

utility newsletters, bill inserts, events, news articles (publicity), and Web marketing were among 

the top marketing strategies used.19, 20 A smaller fraction of utilities reported using television and 

partnering with environmental organizations. 

In 2004 and 2005, utilities were also asked to rank the effectiveness of the various marketing 

techniques listed in the questionnaire. Marketing techniques that received average rankings 

above 3 out of a possible 5 included: bangtails, community challenges, bill inserts, door-to-door 

marketing, direct sales (to commercial accounts), direct mail, and publicity. Interestingly, the 

techniques with the highest effectiveness ranking were not necessarily the most commonly used. 

In 2005, programs employed an average of five of the marketing strategies listed in the 

questionnaire, while the top performers reported an average of eight. About a third of utilities 

reported using three or fewer marketing techniques (Table 30). 

 

19 In 2003, the “events” category was not listed as a specific option in the survey, but was listed under the “other” 

category by some respondents. The 2002 and 2004 surveys both included “events” as a category, and can therefore 

be compared with each other. 

20 Lieberman (2002) reviewed marketing data for public utilities with similar findings, except that direct mail was 

ranked higher. 

22
Table 29: Marketing Techniques Used by Utilities 

Percent of Utilities Using 

Technique 

Percent Top 

Performers Using 

Technique** 

Average Usefulness 

Rank^ 

2004 2005 

2002 2003 2004 2005 2003 2004 2005 All Top All Top 

Utility 

newsletter 70% 81% 78% 74% 87% 73% 81% 2.9 2.9 2.9 2.8 

Bill inserts 61% 83% 74% 66% 87% 73% 75% 3.2 3.4 3.5 3.7 

Events 80% 24%* 74% 60% 40% 73% 81% 2.6 2.7 2.5 2.5 

Publicity 63% 64% 56% 57% 67% 69% 63% 3.4 3.1 3.1 3.1 

Web 

marketing^ n/a n/a 56% 54% n/a 73% 63% 3.3 3.4 2.7 3.2 

Newspaper 

ads 43% 53% 36% 42% 60% 46% 50% 2.5 2.1 2.2 2.4 

Direct sales^ n/a n/a 38% 36% n/a 50% 63% 3.5 3.8 3.4 3.5 

Direct mail 55% 48% 35% 34% 67% 62% 63% 3.7 3.7 3.2 3.7 

Radio ads 37% 45% 22% 27% 53% 19% 25% 2.5 1.2 2.4 2.3 

Bangtails n/a n/a n/a 16% n/a n/a 38% n/a n/a 3.9 4.5 

Partner with 

environmental 

groups^^ n/a n/a 26% 16% n/a 54% 38% 2.7 2.8 2.9 2.7 

Retail 

partners^ n/a n/a 11% 13% n/a 23% 31% 2.9 3.0 2.5 2.2 

Television ads 20% 22% 15% 10% 13% 31% 31% 2.3 1.8 1.5 1.8 

Billboards 7% 7% 8% 7% 7% 12% 13% 3.2 2.0 1.7 1.5 

Community 

challenges^ n/a n/a 7% 5% n/a 19% 13% 2.5 2.4 3.8 3.5 

Kiosks^ n/a n/a 7% 5% n/a 4% 0 3.2 2.0 1.1 0 

Other 32% 41% 19% 5% 60% 46% 6% 3.9 4.1 1.8 2.7 

Telemarketing 8% 14% 6% 4% 20% 12% 19% 3.2 4.3 2.8 3.7 

Door -todoor^^^ n/a n/a n/a 2% n/a n/a 6% n/a n/a 3.3 5 

*Note: “Events” was listed as a specific option in the 2002, 2004, 2005 questionnaire; while, in 2003, respondents were able to

write it in under “Other.” 

**Top performers are defined as utilities that make the Top 10 lists for participants, sales, or participation rate. In 2004 and 2005, 

26 and 16 top programs responded to this question, respectively. 

^ Ranking system is 1-5 with 5 being the most useful marketing technique. Ranking system only included in 2004. 

^^New category in 2004 

^^^New category in 2005 

60 programs provided responses to the question in 2002, 58 responded in 2003, 88 in 2004, and 91 in 2005. 

23
Compared to all programs, the top performers more commonly used many of the techniques 

listed, including direct mail, direct sales, partnerships with environmental organizations, 

bangtails, television ads, retail partnerships, and telemarketing. One potential reason for 

differences in marketing strategies used by top performers may be related to the marketing 

budgets. The top performers represent a significant majority of the programs that spend the most 

on marketing (see Table 23). 

Table 30: Number of Marketing Techniques Used by Utilities 

Number of 

Techniques Used by 

Utilities

2003 2004 2005 

0-1 7% 6% 13% 

2-3 26% 20% 20% 

4-6 45% 34% 33% 

7-9 21% 22% 22% 

10-13 n/a 18% 12% 

Note: There were 58 responses to this question in 2003, 88 in 2004, 

and 91 in 2005. Percentages may not add to 100% due to rounding. 

Program Implementation 

Enrollment Options 

Utilities reported that the most common methods for enrolling customers in green pricing 

programs included using the utility’s Web site, phoning through the utility’s call center, 

returning mail-in cards, and signing up during special events (Table 31). Web site enrollment 

options have become more common since 2002, perhaps because utilities have improved their 

Web sites or increased their Web presence. 

Table 31: Methods of Enrolling in Green Pricing Programs 

% Using Method 

2002 2003 2004 2005 

2005 Top 

Performers 

% Using 

Method 

Average 

Rank 

1 to 5, 

5=highest 

Utility Web site 74% 83% 80% 85% 94% 2.5 

Phone (utility 

call center) 92% 87% 84% 84% 94% 2.8 

Returning 

mail-in card 90% 85% 83% 81% 100% 3.9 

Enroll at 

special events 90% 85% 73% 75% 75% 2.1 

Other 23% 31% 48% 24% 38% 3.3 

Check-box on 

utility bill 8% 12% 15% 13% 13% 3.1 

Note: The number of respondents was 62 in 2002, 59 in 2003, 88 in 2004, and 91 in 2005. 

Sixteen top performers responded to this question. 

24
Only about 13% of utilities allowed customers to enroll by checking a box on their utility bills, 

but those that did ranked it high in effectiveness. Other methods that were ranked as relatively 

effective, with scores greater than 3 out of 5, included “other” methods (which respondents were 

asked to list) and mail-in cards. Some of the enrollment options listed under “other” included bill 

inserts, direct sales through account representatives (both residential and commercial), phone 

marketing by a contractor, and enrolling customers through retail partners or at the utility itself. 

On average, utilities offered three of the six enrollment options listed in the questionnaire. The 

top-performing programs were more likely to use most of the techniques listed. 

 

Enrollment Term 

Roughly one-quarter to one-third of utilities require residential and nonresidential customers to 

subscribe to green pricing programs for a minimum period of time (Table 32). One year is the 

most common minimum enrollment period, with requirements ranging from 2 months to 10 

years. In some cases, utilities require nonresidential customers to enroll for longer periods of 

time than residential customers. Only four residential and six nonresidential programs had 

enrollment terms of more than one year in length. 

Table 32: Enrollment Term by Customer Segment 

Residential Nonresidential 

Percent of utilities with a minimum enrollment term* 26% 32% 

Most common enrollment term 1 year 1 year 

Range of enrollment requirements 2 months to 10 

years 

2 months to 10 

years 

*81 residential and 77 nonresidential programs responded to this question. 

Program Evaluations and Market Research 

Fifty-three utilities (58%) reported that they had conducted customer research to aid the design 

of their green pricing program or to develop a marketing plan. Of the 53 utilities, eight did so in 

2005 and 27 did so in multiple years including 2005. The types of research ranged from 

consumer surveys conducted by phone, mail, in person (focus groups), or the Web (25 utilities 

reported); customer profiling and demographics (3); research to test the effectiveness of 

marketing messages or strategies (3); and research to determine customer satisfaction (1). Of the 

responding top-performing programs (16), 100% reported conducting market research. 

In terms of program evaluation, 29 respondents (32%) indicated that they had performed a 

program evaluation in 2005 or earlier. Fourteen of the programs reported evaluating their 

programs continually, annually, or biannually. Utilities listed that they evaluated factors such as: 

25
messaging, market channel effectiveness, advertising effectiveness, campaign effectiveness, and 

acquisition costs, as well as program participation or success in meeting program goals. Of the 

top-performing programs, 59% reported conducting one or more program evaluation, compared 

to 32% of all programs. 

Customer Value 

Response to utility green pricing programs can be influenced by additional values offered to both 

residential and nonresidential customers (Wiser et al. 2004). For example, customers may be 

more willing to participate in a program if their participation is recognized or rewarded, or if 

they receive other products and services, such as compact fluorescent lightbulbs or store 

discounts. 

Table 33 indicates the percentage of utilities that provide additional benefits to customers, based 

on a list of options included in the 2002-2005 questionnaires. Of the 11 options listed, 

respondents indicated that their utilities offered an average of three additional benefits to their 

green pricing customers. As in previous years, the most common added benefits in 2005 were 1) 

to inform customers about the status of the program through newsletters that provide periodic 

program updates, 2) to provide decals that can be displayed in windows, 3) to recognize 

participants with plaques or other items, and 4) to recognize business customers through ads in 

local media. The fraction of utilities offering 1) tours to renewable energy facilities and 2) 

installing renewable energy systems on schools or offering renewable energy education 

programs have trended downward during the past recorded years. A relatively small fraction of 

utilities offer compact fluorescent lightbulbs or energy efficiency products, discounts or 

promotions at local businesses, protection from fuel cost increases, or exemption from 

environmental fees (e.g., fees designated for installing emission-control equipment at fossil fuel 

plants). 

As in previous years, the top-performing programs were more likely to offer many of the benefits 

listed in Table 33. For example, 69% of the top performers recognized business participants 

through ads in local media or with plaques or other items, compared to about 46% of all 

programs. The top performers were also more likely to provide decals for display in store 

windows, discounts, or promotions at local businesses; to protect customers from fuel cost 

increases; and provide energy efficiency products. Overall, top performers reported providing an 

average of six of the benefits listed, compared to an average of three for all programs. 

26
Table 33: Methods of Providing Additional Program Benefits 

% Using Method 

2002 2003 2004 2005 

Top Performers 

2005, % Using 

Method* 

Newsletters that provide 

program updates 62% 64% 61% 62% 88% 

Decals for display in store 

windows 59% 56% 49% 54% 81% 

Recognition of business 

customers in program ads or 

local media 

44% 51% 49% 46% 69% 

Plaques or other items for 

recognition 40% 49% 51% 44% 63% 

Installations on 

schools/renewable energy 

education programs 

30% 25% 19% 30% 38% 

Tours to renewable energy 

project sites 35% 29% 23% 25% 31% 

Other 5% 12% 16% 16% 6% 

Compact fluorescents or 

efficiency products 22% 12% 15% 15% 25% 

Discounts or promotions at 

local businesses 8% 12% 12% 15% 44% 

Protection from fuel-cost 

increases 11% 10% 9% 15% 44% 

Exemption from 

environmental fees 2% 2% 1% 2% 12% 

Note: 63 programs answered this question in 2002, 59 programs in 2003, 89 programs in 2004, and 91 in 2005. 

*Top performers are defined as utilities ranked among the top 10 for participants, sales, or participation rate. Of 

the top performers in 2005, 16 responded to this question. 

 

27
Conclusions and Observations 

At the end of 2005, more than 600 utilities—including many small municipal and cooperative 

utilities—offered green pricing programs to more than 50 million customers nationally. About 

20% of all utilities nationwide now offer a green pricing option. 

Collectively, utilities sold nearly 3 billion kilowatt-hours (kWh) of green power to more than 

450,000 customers in 2005. In traditionally regulated electricity markets, sales of renewable 

energy through utility green pricing programs grew by 33% to about 2.5 billion kWh in 2005, 

following annual growth in excess of 40% in 2003 and 2004. The increase resulted from both an 

increase in customer participants as well as larger purchases by nonresidential customers. 

However, green pricing sales still represent a very small fraction of total utility electricity sales, 

with an average below 1%—although some utilities have achieved sales penetration rates of as 

much as 4%. 

For utility/marketer programs offered in restructured electricity markets, the number of 

customers and renewable energy sales more than doubled during 2005. These high growth rates 

may be explained, in part, by the relative infancy of most competitive market programs and the 

fact that these programs are implemented in conjunction with companies that specialize in 

renewable energy marketing, which have a vested financial interest in program success. 

The number of customers participating in utility green pricing programs increased by about 20% 

in 2005, a slower pace than sales. The number of nonresidential participants increased at nearly 

twice the rate of residential customers, in contrast to 2004 when growth rates were similar. 

Programs that offer fuel price-protection benefits or those that offer volume discounts or lower 

premiums for large nonresidential purchasers contributed significantly to growth in 

nonresidential participants during 2005, suggesting that these are important program benefits for 

nonresidential consumers. 

Customer attrition rates fell to a median of 5% in 2005, reversing a recent trend of increasing 

dropout rates. This finding is somewhat surprising in a year in which customers throughout the 

country faced higher electricity and energy prices. Although the reason for the overall 

improvement in customer retention is not clear, it suggests that green power customers are 

“sticky” and tend to maintain participation in green power programs, despite cost increases. 

As in previous years, a relatively small number of utility green power programs continue to 

dominate sales and participation figures. The top 10 programs accounted for about 70% of green 

energy sales and 65% of customer participants, consistent with figures from 2004. As in the past, 

one utility program (Austin Energy) accounted for nearly 20% of all green pricing sales. This 

utility offers a fixed-price product that protects participating customers from nonrenewable fuelcost increases for up to 10 years. This value-added strategy has proven to be extremely popular 

among nonresidential customers. 

Average participation rates in green pricing programs have remained relatively flat over time, 

climbing slightly to 1.5% in 2005. Participation rates among the 10 most successful programs 

have been substantially higher, ranging from between about 5% and 14% in 2005 with most 

28
clustered from 5% to 6%. This suggests that high participation rates are possible with dedicated 

marketing and outreach campaigns, or in programs that offer superior value propositions. 

However, these rates still remain well below the 50% to 70% of customers who indicate they are 

willing to pay a premium for green power in market research surveys (Farhar 1999). 

The price premiums charged for green power continued on a downward trend. The average 

premium has fallen from 2.93¢/kWh in 2001 to 2.36¢/kWh in 2005; the median premium 

remained constant at 2¢/kWh. Several programs that exempt participants from fossil fuel cost 

changes offered green power at rates below standard electricity prices during 2005. In addition, a 

number of programs were able to reduce the price premium because of fossil fuel-charge 

exemptions or by renegotiating power purchase contracts at lower rates. Also, several utilities 

introduced programs that offer volume discounts or lower premiums for large, nonresidential 

purchasers. 

Utilities reported a median cost of $25 for acquiring new residential customers, down from the 

approximately $30 reported in previous years. Marketing expenditures generally vary with utility 

size, but there is wide variation in expenditures among the largest utilities. On average, the topperforming programs spend a greater portion of program revenues on marketing and represent 

most of the top marketing spenders. Thus, the level of marketing expenditures appears to be 

important to program success. 

The top performers generally use a larger number of marketing techniques than other utilities. 

Compared to all programs, the top performers more commonly used direct mail, direct sales, 

partnerships with environmental organizations, bangtails, television ads, retail partnerships, and 

telemarketing. Consistent with findings from previous years, the techniques that received high 

effectiveness scores are not necessarily the most commonly used. In general, utilities may benefit 

from diversifying their marketing activities to include some of the more effective strategies. 

At the end of 2005, green pricing programs were supporting the equivalent of more than 740 

MW of new renewable energy capacity. Thus, green pricing continues to be a viable strategy for 

supporting new renewable energy sources. Nevertheless, current success can still be attributed to 

a relatively small number of programs. Continued industry growth will depend largely on the 

introduction of new programs and whether the success of the top-performing programs can be 

duplicated by other utilities. 

29
References 

Bird, L. and E. Brown, 2005. Trends in Utility Green Pricing Programs (2004). Golden, CO: 

National Renewable Energy Laboratory, NREL/TP-620-38800. October. 

http://www.eere.energy.gov/greenpower/resources/pdfs/38800.pdf 

Bird, L. and K. Cardinal, 2004. Trends in Utility Green Pricing Programs (2003). Golden, CO: 

National Renewable Energy Laboratory. NREL/TP-620-36833, September. 

http://www.eere.energy.gov/greenpower/pdfs/36833.pdf 

Bird, L. and B. Swezey, 2005a. Green Power Marketing in the United States: A Status Report 

(Eighth Edition), NREL/TP-620-38994. Golden, CO: National Renewable Energy Laboratory, 

October. http://www.eere.energy.gov/greenpower/resources/pdfs/38994.pdf 

Bird, L. and B. Swezey, 2005b. Estimates of New Renewable Energy Capacity Serving U.S. 

Green Power Markets (2004). Golden, CO: National Renewable Energy Laboratory, May. 

http://www.eere.energy.gov/greenpower/resources/tables/new_gp_cap.shtml

Bird, L. and B. Swezey, 2004. Green Power Marketing in the United States: A Status Report 

(Seventh Edition), NREL/TP-620-36823. Golden, CO: National Renewable Energy Laboratory, 

September. http://www.eere.energy.gov/greenpower/pdfs/36823.pdf 

Bird, L., B. Swezey, and J. Aabakken, 2004. Utility Green Pricing Programs: Design, 

Implementation, and Consumer Response. Report prepared by National Renewable Energy 

Laboratory, Golden Colorado, February. NREL/TP-620-35618. 

http://www.eere.energy.gov/greenpower/resources/pdfs/nrel_35618.pdf 

Farhar, B., 1999. Willingness to Pay for Electricity from Renewable Resources: A Review of 

Utility Market Research, NREL/TP-550-26148. Golden, CO: National Renewable Energy 

Laboratory, July. http://www.eere.energy.gov/greenpower/farhar_26148.html

Holt, E.A., and M. Holt, 2004. Green Pricing Resource Guide (2nd Edition), Ed Holt & 

Associates, Inc., Harpswell, Maine. Prepared for the American Wind Energy Association, 

Washington DC, September.

http://www.awea.org/greenpower/greenPricingResourceGuide040726.pdf 

Lieberman, D., 2002. Green Pricing at Public Utilities: A How-To Guide Based on Lessons 

Learned to Date, Prepared for the Public Renewables Partnership by the Center for Resource 

Solutions, San Francisco, California, October. 

Swezey, B. and L. Bird, 2001. Utility Green Pricing Programs: What Defines Success?

NREL/TP-620-29831. Golden, CO: National Renewable Energy Laboratory, August. 

http://www.eere.energy.gov/greenpower/29831.pdf 

30
Swezey, B. and L. Bird, 2000. Green Power Marketing in the United States: A Status Report 

(Fifth Edition), NREL/TP-620-28738. Golden, CO: National Renewable Energy Laboratory, 

August. http://www.eere.energy.gov/greenpower/pdf/28738.pdf

Swezey, B. and L. Bird, 1999. Information Brief on Green Power Marketing (Fourth Edition), 

NREL/TP-620-26901. Golden, CO: National Renewable Energy Laboratory, August. 

http://www.nrel.gov/analysis/emaa/brief_4.html 

Washington Department of Community, Trade and Economic Development (CTED) and 

Utilities Transportation Commission (UTC), 2005. Green Power Programs in Washington: 2005 

Report to the Legislature. Olympia, WA, December. 

http://qa.cted.wa.gov/_CTED/documents/ID_2641_Publications.pdf 

Wiser, R., S. Olson, L. Bird and B. Swezey, 2004. Utility Green Pricing Programs: A Statistical 

Analysis of Program Effectiveness, LBNL-54437. Berkeley, CA: Lawrence Berkeley National 

Laboratory, February. http://www.eere.energy.gov/greenpower/resources/pdfs/lbnl_54437.pdf

31
Appendix A 

Utility Green Power Program Questionnaire (2005 Data) 

Instructions – Please fill out a different form for each green power program offered. Please enter data for calendar 

year 2005. 

Confidentiality – Individual utility responses to this survey regarding customers, sales, and marketing information 

will be held confidential. Data are used to prepare NREL’s list of top ten utility green power programs and to 

provide aggregate industry data to the U.S. DOE and the general public. 

1. Program and Contact Information 

a. Utility Name 

b. Name of Green Power Program 

c. Name of Respondent 

d. Phone and e-mail of Respondent 

e. Year Program Launched 

f. States in which Program is Offered 

g. Name of Third-party Marketer, if any 

h. Certifying Organization, if Certified 

2. Participation. In the table below, please provide participation data as of December 31, 2005. If data are provided 

for a different time period, please indicate. 

a. Total number of residential green power participants 

b. Total number of non-residential green power participants 

c. Number of new residential green power participants in 2005 (do not subtract dropouts) 

d. Number of new non-residential green power participants in 2005 (do not subtract dropouts) 

e. Total number of residential customers (or members) eligible to participate 

f. Total number of non-residential customers (or members) eligible to participate 

g. Is the program currently open to new customers? Yes/No 

h. Number of customers on waiting list 

i. Number of participants who have dropped out of the program this year 

j. Minimum period of time residential customers must participate (e.g., 1 year) 

k. Minimum period of time non-residential customers must participate (e.g., 2 years) 

3. Programs Offered Through Distribution Utilities. For programs that are offered through multiple distribution 

cooperatives or municipal utilities, please list the number of distribution utilities that offer the program and utilities 

that have achieved participation rates of 4% or higher. Please add more space, if necessary. 

Number of Distribution Utilities That Offer Program Utilities with >4% Participation Participation 

Rate 

4. Pricing. Please indicate the price premium as of the end of 2005. 

Sector Price 

Premium 

(¢/kWh)

Are Participants Exempt 

from Fuel Charge? Y/N If 

yes, what was fuel charge in 

Dec 2005? (¢/kWh)

Change in 

Premium in 

2005? Y/N*

Block Size, if 

applicable 

(kWh) 

Minimum 

Purchase 

(e.g. 25% or 

kWh) 

a. Residential 

b. Non-Residential 

*If there was a change in the price premium during 2005 or if you anticipate a price premium change in 2006, please 

explain. 

5. Renewable Energy Sales for 2005. In the table below, please indicate the total annual sales of green power to 

customers during 2005. If sales are reported for a different period other than January through December 2005, please 

indicate. 

32
Green power sales for 2005 TOTAL 2005 Sales ( kWh) 

a. Green power sales to residential customers 

b. Green power sales to non-residential customers 

c. Total retail electricity sales to eligible residential customers 

d. Total retail electricity sales to eligible non-residential customers 

6. Renewable Energy Mandates. Does your utility count the green power sold to customers through your green 

pricing program toward compliance with a state-imposed renewable portfolio standard? Yes / No 

7. Sales by Renewable Resource. In the table below, list the percentage of sales supplied by each of the following 

renewable resources in 2005. Also, please indicate the percentage of sales supplied by new renewable energy 

sources, if different. 

Resource Percent of Sales Supplied 

by Resource Type 

Percent of Sales Supplied 

by New* Resources 

Biomass: Landfill Gas % % 

Biomass: Biogas % % 

Biomass: Wood or Other % % 

Geothermal % % 

Hydroelectric % % 

Solar % % 

Wind % % 

**New resources defined as those in service or repowered after January 1, 1997. 

8. Renewable Energy Supplies. Of the renewable energy used to supply your program, what percentage came from 

the following? 

Renewable projects owned or partially-owned by your utility % 

Renewable energy purchases from other suppliers/producers % 

Renewable energy produced by utility customers (e.g. PV) % 

Renewable certificate purchases % 

Total 100 % 

9. Renewable Energy Projects Supplying Program. In the table below, please indicate the type and amount of 

renewable resources used to supply participants in your green pricing program during 2005. 

Name(s) of Renewable 

Energy Project Used to 

Supply Program 

Resource 

Type (e.g.,. 

Wind, PV) 

Nameplate 

Capacity Installed (kW) 

Year 

Installed 

2005 Energy or REC 

Purchases (kWh/yr) 

10. Planned Renewable Energy Supplies. In the table below, please indicate any planned renewable energy 

projects that will be used to supply participants in your green pricing program. 

Name(s) of Planned Renewable Energy 

Projects to Supply Program in Future 

Resource Type 

(e.g.,. Wind, PV) 

Nameplate Capacity 

Planned (kW) 

Year 

Planned 

11. Program Research. Have you performed (in 2005 or earlier) market research to aid in the design of your green 

power program or have you performed a program evaluation? 

Research Category Did you Perform? 

Y/N

In what year(s) was 

research performed? 

Type of Research or Evaluation Performed 

a. Market Research 

b. Program Evaluation 

33
12. Customer Enrollment. In which ways can customers sign up for your program? (check all that apply) Also, 

please rate the effectiveness of each method on a scale of 1 to 5, with 5 being the most effective. 

Check 

(x) 

Effectiveness Rating

(1-5 scale, 5 =most effective)

Utility Web site 

By returning a mail-in card/bangtail 

Checking a box on their electric bill 

Sign up at special events 

By phone through the utility call center 

Other? (specify) 

13: Value-Added Products. What other value-added products or services do you provide to customers that enroll in 

your green power program? (check all that apply) 

Compact fluorescents or efficiency products Decals for display in store windows 

Recognition of business customers in program ads or local media Education programs/school installations 

Discounts or promotions at local businesses Plaques, certificates or other recognition 

Newsletters that provide program updates Protection from fuel cost increases 

Tours to renewable energy project sites Exemption from environmental fees 

Welcome Kit/Thank you letter Other (List): 

14. Marketing and Administration Spending. Please indicate below how much you spend annually on marketing 

and administration of your green power program. (check the appropriate boxes below) 

Marketing Costs 

(excluding staff time) 

Administrative Costs 

(including staff time) 

Less than $10,000 

$10,000-$49,999 

$50,000-$99,999 

$100,000-$249,999 

$250,000-$499,999 

$500,000 -$749,999 

$750,000-$999,999 

$1,000,000 or more 

15. Distribution of Costs. 

What percentage of your green power premium was attributable to marketing and administrative costs in 2005? % 

Are all program costs borne by program participants? Circle one. Y / N 

 If no, please explain 

On average, how much did you spend in 2005 to sign up each residential customer ($/customer)? $ 

16. Marketing Strategies. In the table below, please indicate which marketing strategies you used for your green 

power program in 2005. (check all that apply) Also, please rate the cost-effectiveness of those strategies utilized 

based on a scale of 1 to 5, with 5 being the most cost-effective. 

Check (x) Rating (1-5) Check (x) Rating (1-5) 

Bill inserts Publicity/feature stories (non-paid) 

Television Events/Presenting to groups 

Telemarketing Community challenges 

Direct mail Partner with environmental orgs. 

Radio Retail partners (co-branding) 

Billboards Web-based marketing 

Utility newsletter Direct sales to commercial accts. 

Bangtails Door-to-door residential 

Newspaper/other print ads Kiosks 

Other (please list): 

34
Appendix B 

Table B-1: Utilities Offering Green Pricing Programs in Regulated Markets, 2005

Investor-Owned Utilities 

Alabama Power Company 

Alliant Energy 

Arizona Public Service 

Avista Utilities 

Central Vermont Public Service 

Dominion NC Power 

Duke Power 

El Paso Electric 

Florida Power & Light Company 

Green Mountain Power 

Gulf Power 

Hawaiian Electric 

Idaho Power Company 

Indianapolis Power & Light Company 

Madison Gas & Electric 

MidAmerican Energy 

Minnesota Power 

Northwestern Energy 

OG&E Electric Services 

Otter Tail Power Company 

PacifiCorp* 

Portland General Electric 

Progress Energy 

PSI Energy/Cinergy 

Public Service of New Mexico 

Puget Sound Energy 

Tampa Electric Company 

Tucson Electric Power Company 

UniSource Energy Services 

Upper Peninsula Power Company 

We Energies 

Wisconsin Public Service Corporation 

Xcel Energy 

Electric Cooperatives

Basin Electric Power Cooperative* 

Boone Electric Cooperative 

Continental Cooperative Services/Soyland 

Corn Belt Power Cooperatives 

Dairyland Power Cooperative* 

Deseret Power 

East Kentucky Power Cooperative* 

Farmers Electric Cooperative 

Georgia Electric Membership Corporation* 

Golden Valley Electric Association 

Great River Energy* 

Holy Cross Energy 

Hoosier Energy* 

Lower Valley Energy 

Midstate Electric Cooperative 

Minnkota Power Cooperative* 

Orcas Power & Light Cooperative 

Oregon Trail Electric Cooperative 

PNGC Power* 

Park Electric Cooperative 

Peninsula Light Company 

Southern Montana Electric G&T Cooperative 

Tri-State Generation and Transmission Assoc.* 

Vigilante Electric Cooperative 

Wabash Valley Power Association* 

Western Farmers Electric Cooperative 

Yampa Valley Electric Association

Federal

Tennessee Valley Authority* 

Municipals/Other Public Utilities

City of Alameda 

AMP Ohio 

Anaheim Public Utilities 

City of Ashland 

Austin Energy 

Benton County PUD 

City of Bowling Green 

Burbank Water and Power 

Cedar Falls Utilities 

Chelan County PUD 

Clallum County PUD 

Clark Public Utilities 

Colorado Springs Utilities 

Columbia River PUD 

Concord Municipal Light Plant 

Cowlitz PUD 

ElectriCities 

Emerald People’s Utility District 

Eugene Water & Electric Board 

Gainsville Regional Utilities 

Grant County PUD 

Grays Harbor PUD 

Iowa Association of Municipal Utilities* 

Keys Energy Services 

Lansing Board of Water and Light 

Lewis County PUD 

Lincoln Electric System 

Los Alamos Department of Public Utilities 

Los Angeles Department of Water and Power 

Mason County PUD No. 3 

Missouri River Energy Services* 

Moorhead Public Service 

Muscatine Power and Water 

City of Naperville 

City of New Smyrna Beach 

Oklahoma Municipal Power Authority 

Omaha Public Power District 

Pacific County PUD #2 

Pasadena Water & Power 

City of Palo Alto Utilities 

Platte River Power Authority* 

Roseville Electric 

Sacramento Municipal Utility District 

City of St. Charles 

City of St. George Energy Services Department 

Salt River Project 

City Public Service of San Antonio 

Santee Cooper* 

Seattle City Light 

Silicon Valley Power 

Snohomish County PUD 

Southern Minnesota Municipal Power Agency* 

City Utilities of Springfield 

Tacoma Power 

City of Tallahassee 

Traverse City Light & Power 

Waverly Light & Power 

Wisconsin Public Power Inc.* 

*denotes program offered through multiple utilities or 

distribution cooperatives

35
Table B-2: Utility/Marketer Green Power Programs in Restructured Electricity Markets, 2005 

Consumers Energy 

Connecticut Light & Power 

JP&L 

Long Island Power Authority 

National Grid (Massachusetts Electric, Nantucket 

 Electric, Narragansett Electric, Niagara Mohawk) 

NYSEG 

Rochester Gas and Electric 

PECO Energy 

PSE&G 

United Illuminating

36
Appendix C 

Table C-1: Green Pricing Program Renewable Energy Sales 

(as of December 2005) 

Rank Utility Resources Used 

Sales 

(kWh/year) 

Sales 

(aMW)a

1 Austin Energy Wind, landfill gas 435,140,739 49.7 

2 Portland General Electricb Existing geothermal and 

hydro, wind 339,577,170 38.8 

3 PacifiCorpcd Wind, biomass, solar 234,163,591 26.7 

4 Florida Power & Light Biomass, wind, solar 224,574,530 25.6 

5 Sacramento Municipal Utility Districte Wind, landfill gas, 

small hydro, solar 195,081,504 22.3 

6 Xcel Energyef Wind 147,674,000 16.9 

7 National Gridghi Biomass, wind, 

small hydro, solar 127,872,457 14.6 

8 Basin Electric Power Cooperative Wind 113,957,000 13.0 

9 Puget Sound Energy Wind, solar, biogas 71,341,000 8.1 

10 OG&E Electric Services Wind 63,591,526 7.3 

a

An “average megawatt” (aMW) is a measure of continuous capacity equivalent (i.e., operating at a 100% capacity factor). 

b Some products marketed in partnership with Green Mountain Energy Company. 

c

 Includes Pacific Power and Utah Power. 

d

 Some Oregon products marketed in partnership with 3 Phases Energy Services. 

e

Product is Green-e certified (www.green-e.org). For Xcel Energy, only the Public Service Company of Colorado product is green-e 

certified. f Includes Northern States Power, Public Service Company of Colorado, and Southwestern Public Service. 

g

 Includes Niagara Mohawk, Massachusetts Electric, Narragansett Electric, and Nantucket Electric. 

h

 Marketed in partnership with Community Energy, EnviroGen, Green Mountain Energy Company, Mass Energy, People’s Power & Light, 

and Sterling Planet. i Some products are certified by Green-e (www.green-e.org) or Environmental Resources Trust http://www.ert.net. 

37
Table C-2: Total Number of Customer Participants 

(as of December 2005) 

Rank Utility Program(s) Participants 

1 Xcel Energya Windsourceb

Renewable Energy Trust 49,354 

2 PacifiCorpcd

Blue Sky Block 

Blue Sky Usage 

Blue Sky Habitat 

42,269

3 Portland General Electrice

Clean Wind 

Green Source 

Healthy Habitat 

40,570 

4 Sacramento Municipal Utility District Greenergyb 31,229 

5 Los Angeles Department of Water & Power Green Power for a Green LA 24,380

6 Florida Power & Lightf Sunshine Energy 23,066 

7 PECOg PECO WIND 22,164 

8 National Gridhi GreenUpj 20,986 

9 Puget Sound Energy Green Power Program 15,500 

10 We Energies Energy for Tomorrowb

12,458 

10 Alliant Energyk Second Natureb

12,426 

a Includes Northern States Power, Public Service Company of Colorado, and Southwestern Public Service. 

b

Product is Green-e certified (www.green-e.org). For Xcel Energy, only the Public Service Company of Colorado product is Green-e

certified. For Alliant Energy, Iowa and Minnesota products are Green-e certified. c

 Includes Pacific Power and Utah Power. 

d

 Some Oregon products marketed in partnership with 3 Phases Energy Services. 

e

 Some products marketed in partnership with Green Mountain Energy Company. 

f

 Marketed in partnership with Green Mountain Energy Company. 

g

 Marketed in partnership with Community Energy, Inc. 

h

 Includes Niagara Mohawk, Massachusetts Electric, Narragansett Electric, and Nantucket Electric. 

i

 Marketed in partnership with Community Energy, EnviroGen, Green Mountain Energy Company, Mass Energy, People’s Power & Light, 

and Sterling Planet. 

j

Some products are certified by Green-e (www.green-e.org) or Environmental Resources Trust http://www.ert.net. k

 Includes Interstate Power and Light and Wisconsin Power and Light. 

38
Table C-3: Customer Participation Rate 

(as of December 2005) 

Rank Utility 

Customer 

Participation 

Rate Program(s) 

Program 

Start 

Year 

1 City of Palo Alto Utilitiesa 13.6% Palo Alto Greenb 2003 

2 Lenox Municipal Utilitiesc 12.6% Green City Energy 2003 

3 Montezuma Municipal Light & Powerc 6.3% Green City Energy 2003 

4 Holy Cross Energy 6.0% Wind Power Pioneer 

Local Renewable Energy Pool 

1998 

2002 

5 Sacramento Municipal Utility District 5.5% Greenergyb 1997 

6 Portland General Electricd 5.3% 

Clean Wind 

Green Source 

Healthy Habitat

2002 

7 City of Fairbankc 4.9% Green City Energy 2003 

8 Silicon Valley Powera 4.8% Santa Clara Green Power 2004 

9 Moorhead Public Service 4.7% Capture the Wind 1998 

10 Central Electric Cooperativee 4.6% Green Power 1999 

a

 Marketed in partnership with 3 Phases Energy Services 

b Product is Green-e certified (www.green-e.org). c

 Program offered in association with the Iowa Association of Municipal Utilities. 

d

 Some products marketed in partnership with Green Mountain Energy Company.

e

Power supplied by PNGC Power. 

39
Table C-4: Price Premium Charged for New, Customer-Driven Renewable Powera 

(as of December 2005) 

Rank Utility Resources Used 

Premium 

(¢/kWh) 

1 Xcel Energybc Wind -0.67 

2 Edmond Electricbd Wind -0.45 

3 OG&E Electric Servicesb Wind -0.25 

4 Avista Utilities Wind 0.33 

5 Western Farmers Electric Cooperative Wind 0.50 

6 Austin Energyb Wind, landfill gas 0.70 

6 Clallam County Public Utility Districtb Landfill gas 0.70 

8 PacifiCorpe Wind, biomass, solar 0.78 

9 Wabash Valley Power Associationf Landfill gas 0.90 

10 Eugene Water and Electric Boardb Wind 0.91 

a

 Includes only programs that have installed or announced firm plans to install or purchase power from 100% new renewable resources. b

 Premium is variable; customers in these programs are exempt or otherwise protected from changes in utility fuel charges. c

 Public Service Company of Colorado only. Product is Green-e certified (www.green-e.org). 

d

 Power supplied by Oklahoma Municipal Power Authority. 

e Pacific Power Blue Sky Usage product; only available in Oregon. Product marketed in partnership with 3 Phases Energy Services. f The premium charged by participating member distribution utilities varies from 0.9¢/kWh to 1.0¢/kWh. 

40
F1147-E(12/2004) 

REPORT DOCUMENTATION PAGE Form Approved 

OMB No. 0704-0188

The public reporting burden for this collection of information is estimated to average 1 hour per response, including the time for reviewing instructions, searching existing data sources, 

gathering and maintaining the data needed, and completing and reviewing the collection of information. Send comments regarding this burden estimate or any other aspect of this 

collection of information, including suggestions for reducing the burden, to Department of Defense, Executive Services and Communications Directorate (0704-0188). Respondents 

should be aware that notwithstanding any other provision of law, no person shall be subject to any penalty for failing to comply with a collection of information if it does not display a 

currently valid OMB control number. 

PLEASE DO NOT RETURN YOUR FORM TO THE ABOVE ORGANIZATION.

1. REPORT DATE (DD-MM-YYYY)

October 2006 

2. REPORT TYPE

Technical Report 

3. DATES COVERED (From - To)

 

5a. CONTRACT NUMBER

DE-AC36-99-GO10337 

5b. GRANT NUMBER

4. TITLE AND SUBTITLE

Trends in Utility Green Pricing Programs (2005) 

5c. PROGRAM ELEMENT NUMBER

5d. PROJECT NUMBER

NREL/TP-640-40777 

5e. TASK NUMBER

ASG6.1003 

6. AUTHOR(S)

Lori Bird and Elizabeth Brown 

5f. WORK UNIT NUMBER

7. PERFORMING ORGANIZATION NAME(S) AND ADDRESS(ES)

National Renewable Energy Laboratory 

1617 Cole Blvd. 

Golden, CO 80401-3393 

8. PERFORMING ORGANIZATION 

REPORT NUMBER

NREL/TP-640-40777 

10. SPONSOR/MONITOR'S ACRONYM(S)

NREL 

9. SPONSORING/MONITORING AGENCY NAME(S) AND ADDRESS(ES)

11. SPONSORING/MONITORING 

AGENCY REPORT NUMBER

12. DISTRIBUTION AVAILABILITY STATEMENT

National Technical Information Service 

U.S. Department of Commerce 

5285 Port Royal Road 

Springfield, VA 22161 

13. SUPPLEMENTARY NOTES

14. ABSTRACT (Maximum 200 Words)

In the early 1990s, only a handful of utilities offered their customers a choice of purchasing electricity generated from 

renewable energy sources. Today, more than 600 utilities—or about 20% of all utilities nationally—provide their 

customers a “green power” option. Because some utilities offer programs in conjunction with cooperative 

associations or other publicly owned power entities, the number of distinct programs totals more than 130. Through 

these programs, more than 50 million customers have the ability to purchase renewable energy to meet some portion 

or all of their electricity needs—or make contributions to support the development of renewable energy resources. 

Typically, customers pay a premium above standard electricity rates for this service. This report presents year-end 

2005 data on utility green pricing programs, and examines trends in consumer response and program 

implementation over time. The data in this report, which were obtained via a questionnaire distributed to utility green 

pricing program managers, can be used by utilities to benchmark the success of their green power programs. 

15. SUBJECT TERMS

Green power; green pricing; utilities; electricity customers; renewable energy supplies; renewable energy certificates; 

RECs; green power products; customer-acquisition costs; marketing costs; Lori Bird; Elizabeth Brown 

16. SECURITY CLASSIFICATION OF: 19a. NAME OF RESPONSIBLE PERSON 

a. REPORT 

Unclassified 

b. ABSTRACT 

Unclassified

c. THIS PAGE 

Unclassified

17. LIMITATION 

OF ABSTRACT

UL 

18. NUMBER 

OF PAGES 

19b. TELEPHONE NUMBER (Include area code)

Standard Form 298 (Rev. 8/98) 

Prescribed by ANSI Std. Z39.18