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

Utility-Marketer Partnerships: 

An Effective Strategy for 

Marketing Green Power? 

L.A. Bird and E.S. Brown

Technical Report 

NREL/TP-620-39730 

April 2006 
Utility-Marketer Partnerships: 

An Effective Strategy for 

Marketing Green Power? 

L.A. Bird and E.S. Brown

Prepared under Task No. ASG5.1005 

Technical Report 

NREL/TP-620-39730 

April 2006 

National Renewable Energy Laboratory 

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by Midwest Research Institute • Battelle 

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Acknowledgments 

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

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

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

Michaud of The United Illuminating Company; Bryan Garcia of the Connecticut Clean Energy 

Fund; John Hatfield of New York State Electric and Gas (NYSEG) Corporation; Thor Hinckley 

of Portland General Electric; Alex Rate and Marci Grossman of Green Mountain Energy; 

Kathleen Yetman and Michelle Baker of National Grid; Dan Kalafatas and Gabe Petlin of 3 

Phases Energy; Ed Holt of Ed Holt and Associates Inc.; Amy McGinty of Community Energy; 

Steve DeMott of PECO; Lisa Frantzis of Navigant Consulting; and Ron Benioff, Walter Short, 

and Blair Swezey of NREL for their thoughtful reviews of the document. In addition, we thank 

Michelle Kubik of NREL for her editorial support. Finally, the authors appreciate the 

contribution of the many utility, green power marketing, and public utility commission contacts 

that provided information and perspectives for this report: 

Michelle Baker and Kathleen Yetman, National Grid 

David Bates, Florida Power and Light 

Steve DeMott, PECO 

Bryan Garcia, Connecticut Clean Energy Fund 

David Goldberg, Connecticut Department of Public Utility Control 

Marci Grossman, Paul Markovich, Mark Hammer, and Alex Rate, Green Mountain Energy 

John Hatfield, NYSEG 

Thor Hinkley, Portland General Electric 

Dan Kalafatas, Gabe Petlin, and Elaine Horn, 3 Phases Energy 

Bob Maddox, Sterling Planet 

Amy McGinty, Community Energy 

Anne Marie McShea, New Jersey Board of Public Utilities 

Jim Michaud, The United Illuminating Company 

Lisa Schwartz, Oregon Public Utility Commission 

Aprille Soderman, Northeast Utilities 

Erich Stevens, People’s Power and Light 

Bob Stull and Rhonda Rasmussen, PacifiCorp 

Brian Ward and Karl Knapp, City of Palo Alto Utilities 

Additional information on green power markets can be found on DOE’s Green Power Network 

Web site (http://www.eere.energy.gov/greenpower/). 

iii
Table of Contents 

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

Table of Contents........................................................................................................................... iv 

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

Introduction..................................................................................................................................... 3 

Overview of Recent Experience with Utility-Marketer Partnerships....................................... 4 

Considerations in Making the Partnership Decision................................................................. 4 

Issues in Designing and Implementing a Partnership..................................................................... 8 

Case Studies of Utility-Marketer Partnerships ............................................................................. 11 

Voluntary Partnerships............................................................................................................ 11 

Mandatory Partnerships.......................................................................................................... 17 

Comparing the Performance of Partnership Programs ................................................................. 32 

Key Factors for Successful Partnerships....................................................................................... 35 

General Success Factors ......................................................................................................... 35 

Voluntary Programs................................................................................................................ 36 

Mandatory Programs............................................................................................................... 37 

Summary and Conclusions ........................................................................................................... 40 

iv
Executive Summary 

This paper explores whether partnerships between utilities and independent marketers are an 

effective strategy for marketing green power. We present case studies of voluntary and 

mandatory partnerships covering green power program design and implementation in both 

regulated and restructured electricity markets. We also include perspectives (based on 

interviews) from utilities, marketers, and regulators involved in developing and implementing 

these partnerships. From these case studies and interviews, we describe lessons learned about 

developing effective partnerships, including such issues as respective roles in marketing and 

administration, product branding, and contract and incentive structures. 

Based on experience to date, strategic partnerships between utilities and marketers can be an 

effective approach to marketing green power. Partnerships leverage the sales and resource 

procurement experience of marketers and the utility’s reputation and access to customers. 

Further, partnerships can create greater incentives for success because marketers have a vested 

financial interest in maximizing customer participation and green power sales. 

Utilities may benefit from teaming with marketers, if they have limited experience in procuring 

renewable energy supplies, marketing renewable energy or other value-added products, or are 

interested in reducing the risks of offering renewable energy options to their customers. In states 

with competitive electricity markets, partnerships between default suppliers and marketers 

provide greater choices for residential and small commercial customers, who may otherwise be 

hesitant to switch suppliers. 

However, partnerships can fail if either the program or the partnering arrangement is not 

properly designed and implemented. It is important that both parties be adequately compensated 

and actively engaged in the program. Because marketers are typically paid for performance, they 

are most likely to invest their time and energy in programs where the utility is supportive and 

actively works to make the program a success. Partnerships in which both parties are vested in 

the success of the program have been most effective. 

Specific findings include: 

• The single-marketer model is preferred because it eliminates the need for the utility to be 

a neutral party in offering a green power option. This model leads to greater enrollments 

because the utility can be more active in promoting the program, while the marketer has 

greater incentive to invest resources. In addition, the single-marketer approach avoids the 

complexity and marketing challenges of programs involving multiple marketers and 

product choices. Competitive market concerns can be addressed by using a competitive 

procurement process to select suppliers. Where utilities are free to choose a partnership 

approach, there are no clear advantages to a multiple-marketer model. 

• It is important that both parties be fully engaged in the program. Utilities can enhance the 

chances of success by actively promoting the program with the marketer, leveraging 

ongoing marketing activities within the utility, and facilitating access to various utility 

departments, such as the communications, call center, mail house, and billing 

1
departments. Marketers will be most vested where the utility provides program support 

and the contract terms provide performance incentives. 

• The division of risk between the utility and marketer does not appear to be an important 

factor, as long the parties are adequately compensated for their respective risks. Most 

marketers will assume greater risks if given adequate time to recoup start-up costs and 

generate a profit; generally, a contract length of three to five years is preferred. 

• Unless clear advantages to co-branding are identified, it is best to promote the program 

through the utility’s brand for simplicity and to avoid confusing customers. The use of 

multiple brands and logos can create difficulties in preparing marketing materials with 

limited space. Co-branding can also be problematic for programs in which a new 

marketer may be selected periodically. 

• Performance targets are important for evaluating program success and to ensure that the 

parties have similar expectations. In later years, performance metrics can become 

particularly important to ensure that marketing efforts are sustained. 

• Flexibility on the part of both parties is needed to achieve an effective working 

relationship. Marketers often bring new ideas and nontraditional marketing approaches 

that have proven effective for reaching green power customers. Some important 

advantages of the partnership will be lost if the utility is unwilling to try new approaches. 

2
Introduction 

In the mid- to late 1990s, electric utilities began to embrace the idea of offering renewable 

energy options to their customers. Initially, utility interest in offering green power stemmed from 

the threat of retail competition. During the late 1990s, competitive retail markets for green power 

emerged as a number of states rolled out retail access programs, in which independent marketers 

offered green power options to compete with the incumbent utilities. More recently, utilities have 

developed programs to offer customers product choices and to improve their corporate image. 

Over time, a number of challenges have emerged. In competitive markets, many retail green 

power marketers found it difficult to persuade customers to switch suppliers. In particular, they 

found that selling to and serving residential and small commercial customers is very expensive. 

Under the most favorable market conditions, competitive green power marketers have garnered 

about 1% to 2% of retail customers. Similarly, in regulated markets, utility green pricing 

programs, on average, have experienced participation rates of about 1%, while the most 

successful programs have achieved participation rates of from 4% to 15%. 

In recent years, a number of utilities have turned to partnering with independent, third-party 

renewable energy marketers to design and promote their green power programs or to enhance the 

effectiveness of existing programs. And retail marketers have shown increasing interest in 

forging partnerships with utilities to improve their success in competitive markets. The first 

utility-marketer partnerships emerged in 2002 in Oregon, where the state’s two investor-owned 

utilities were required by law to offer renewable energy options in conjunction with independent 

marketers. 

Today, more than 25 utilities either voluntarily team with marketers to offer green power options 

or do so under legal or regulatory requirements. Several states also require default electricity 

suppliers to offer green power options in conjunction with competitive marketers. These 

programs provide access to retail green energy products in restructured markets where none may 

otherwise exist. 

Utility-marketer partnerships have the potential to increase program success. Teaming 

arrangements build on the strengths of the utility, in terms of reputation and access to customers; 

and build on the strengths of the marketer, in terms of expertise in procuring renewable energy 

supplies, designing programs, and marketing green energy products to consumers. In addition, 

partnerships spread the risks of developing and implementing green power programs between 

both the utility and participating marketer. Finally, marketers have a vested financial interest in 

maximizing customer participation and green power sales. 

This paper explores whether partnerships between utilities and independent marketers are an 

effective strategy for marketing green power. We present case studies of voluntary and 

mandatory partnerships covering green power program design and implementation in both 

regulated and restructured electricity markets. We also include perspectives (based on 

interviews) from utilities, marketers, and regulators involved in developing and implementing 

these partnerships. From these case studies and interviews, we describe lessons learned about 

3
developing effective partnerships, including such issues as respective roles in marketing and 

administration, product branding, and contract and incentive structures. 

Overview of Recent Experience with Utility-Marketer Partnerships 

Partnerships between utilities or default suppliers and independent marketers specializing in 

selling green energy have become more common. Today, more than 25 utilities have entered into 

voluntary or mandatory partnerships with third-party marketers to offer green power options to 

their customers. These programs exist both in states that have implemented retail competition 

(Table 1) and those with traditionally regulated electricity markets (Table 2). 

In states with competitive electricity markets, marketers may team with default suppliers to offer 

renewable energy options to customers not being served by competitive suppliers. In most cases, 

these teaming arrangements are required by state law or other agreements to provide renewable 

energy options to residential and small commercial customers, who have had few competitive 

market choices. These programs provide green power marketers with easier access to small 

customers, who are otherwise very expensive to contact, enroll, and service. 

Some mandated partnerships have been designed to involve multiple marketers and encourage 

greater competition in the market. In Oregon, Connecticut, and New Jersey—where programs 

are required by law—regulators have involved various stakeholders in program design and 

implementation in order to balance diverse stakeholder interests. These programs have typically 

involved competitive solicitations to select the market participants. With voluntary partnerships, 

utilities have typically opted to partner with a single marketer. 

Considerations in Making the Partnership Decision 

Utilities offer green power options to their consumers for any number of reasons, including to 

satisfy customers or shareholders who want to promote cleaner technologies; improve the 

utility’s image; develop experience with renewable energy technologies; gain competitive 

advantage; improve the environmental performance of the utility; or, in some cases, meet state 

requirements to offer green pricing options.1

 And market research has found that customers look 

more favorably on utilities that offer a green power option, even if they do not participate in the 

program.

2

 

Once the utility has decided to offer a renewable energy option, it must consider whether to offer 

the program “in-house” or in partnership with a third-party entity that specializes in green power 

marketing and supply. Such partnerships may offer the following benefits: 

 

1

 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, D.C., September. 

http://www.awea.org/greenpower/greenPricingResourceGuide040726.pdf 2

 Hinckley, Thor. Portland General Electric. “Key Considerations in Green Power Program Administration,” 

presentation at the Tenth National Green Power Marketing Conference, Austin, Texas, October 24, 2005 

http://www.eere.energy.gov/greenpower/conference/gpmconf05_pres.html

4
Table 1. Green Power Options Offered Through Utility-Marketer Partnerships in 

Competitive Electricity Markets 

Utility State Program 

Name Current Partner(s) Start Date Required/ Voluntary 

PacifiCorp* OR 

Blue Sky 

Usage; Blue 

Sky Habitat 

3 Phases Energy March 

2002 

Required by state 

restructuring law 

Portland General 

Electric* OR Green Source; 

Healthy Habitat 

Green Mountain 

Energy 

March 

2002 

Required by state 

restructuring law 

Niagara Mohawk 

(National Grid) NY GreenUp 

Community Energy; 

EnviroGen; Green 

Mountain Energy; 

Sterling Planet 

September 

2002 

Merger settlement 

agreement 

NYSEG NY NewWind 

Energy Community Energy October 

2002 Voluntary 

Massachusetts 

Electric and 

Nantucket Electric 

(National Grid) 

MA GreenUp 

Community Energy; 

Mass Energy; 

Sterling Planet 

September 

2003 Voluntary 

Narragansett 

Electric 

(National Grid) 

RI GreenUp 

Community Energy; 

People’s Power & 

Light; Sterling 

Planet 

March 

2004 Voluntary 

RG&E NY NewWind 

Energy Community Energy April 

2004 Voluntary 

PECO PA PECO Wind Community Energy May 

2004 

Merger settlement 

agreement 

Long Island 

Power Authority NY LIPA Green 

Choice 

Community Energy; 

EnviroGen; Sterling 

Planet 

August 

2004 Voluntary 

Connecticut Light 

& Power CT CT Clean 

Energy Options 

Community Energy; 

Sterling Planet 

April 

2005 

Required by CT 

DPUC 

United Illuminating CT CT Clean 

Energy Options 

Community Energy; 

Sterling Planet 

April 

2005 

Required by CT 

DPUC 

JCP&L NJ CleanPower 

Choice 

Community Energy; 

Green Mountain 

Energy; JerseyAtlantic Wind; 

Sterling Planet 

October 

2005 

Required by NJ 

BPU 

PSEG NJ CleanPower 

Choice 

Community Energy; 

Green Mountain 

Energy; JerseyAtlantic Wind; 

Sterling Planet 

October 

2005 

Required by NJ 

BPU 

Consolidated 

Edison NY N/A Community Energy; Sterling Planet 

November 

2005 

Rate case 

agreement 

* In Oregon, choice of an alternative supplier is not allowed for residential and small commercial customers; instead 

regulated utilities are required to offer their customers a specified choice of products, including renewable energy 

options. 

5
Table 2. Green Power Options Offered Through Utility-Marketer Partnerships in 

Regulated Electricity Markets 

Utility State Program Name Current Partner Start Date Required/ 

Voluntary

City of Tallahassee FL Green for You Sterling Planet December 

2002 Voluntary 

Green Mountain 

Power VT Cool Home NativeEnergy January 2003 Voluntary 

City of Palo Alto 

Utilities CA PaloAltoGreen 3 Phases Energy June 2003 Voluntary 

Emerald People’s 

Utility District OR Green Power Green Mountain Energy 

Summer 

2003 Voluntary 

City of Ashland OR Renewable 

Pioneers 

Bonneville Environmental Foundation November 

2003 Voluntary 

Florida Power & 

Light FL Sunshine Energy Green Mountain Energy 

February 

2004 Voluntary 

AMP-Ohio OH Nature’s Energy Green Mountain 

Energy 

March 

2004 Voluntary 

Silicon Valley 

Power CA Santa Clara 

GreenPower 3 Phases Energy November 

2004 Voluntary 

Keyes Energy 

Services FL GO GREEN Sterling Planet November 2004 Voluntary 

City of Naperville IL Renewable 

Energy Option Community Energy January 

2005 Voluntary 

Roseville Electric CA Green Roseville 3 Phases Energy December 

2005 Voluntary 

• Building on the strengths of both the utility (reputation for service and reliability, brand 

and name recognition, access to and relationships with customers, existing 

communication channels) and the marketer (specialized expertise in green power 

procurement, marketing, and program and product design). 

• Creating greater incentives for success. Marketers survive on the success of programs; 

whereas these programs are a small part of the utility’s overall business and may not be a 

high corporate priority. Most partnerships are structured so that the marketer is paid for 

performance, which is a strong incentive for success; whereas utility staff typically are 

salaried and do not have direct financial incentives for success. 

• Reducing risks associated with offering the program. Marketers are willing to absorb a 

portion or most of the program risk. 

• Sharing the start-up costs with a third party may enable utilities to shorten the period 

until the program covers its costs, strengthening the overall business case for the 

program. 

• Providing access to larger marketing budgets. Marketers typically commit some of their 

own resources to marketing, which can lead to more funds than the utility would be 

6
willing to commit internally. In addition, marketers may be eligible for state marketing 

incentives for which the utility is not. 

• Providing more flexibility in staff availability for marketing campaigns (events, door-todoor sales, etc.) and program implementation. 

• Supplementing in-house capabilities if marketing value-added products is not a core 

utility competency, or if the utility lacks expertise in renewable energy markets or 

marketing. 

• Enhancing the effectiveness of marketing materials and campaigns. Marketers may be 

more creative and nimble. Also, marketers may have experience with marketing 

approaches not typically used by the utility but that have proven effective for attracting 

green power customers. 

• Facilitating the sale of renewable energy certificates (RECs) to residential and small 

commercial customers. The RECs concept is confusing to many consumers. Under a 

teaming arrangement, the utility provides customers with electricity, which creates a 

bundled electricity product. Also, utility involvement in offering a REC-based product 

may increase the customer’s comfort level, because the utility is a known and trusted 

entity. 

• Creating a greater market impact than individual organizations can achieve 

independently. 

On the other hand, partnerships between utilities and third-party marketers may have some 

disadvantages or create challenges, such as: 

• Requiring greater coordination and collaboration with an external entity. For example, 

the two parties may have differing opinions on the best approaches to program 

implementation or the pace of marketing. A marketer may want to use marketing 

approaches or techniques not typically used by the utility, such as telemarketing or doorto-door sales. Final decisions regarding marketing are typically made by the utility. 

• Reducing the profit potential for the utility—particularly in the long run—if revenues are 

shared with the marketer. However, many utilities with in-house programs report that 

these programs rarely make money; and, in many cases, are intentionally structured not to 

do so, but instead are implemented for public relations, environmental, and other benefits. 

• Providing a significant short-term benefit, if the utility has limited experience marketing 

green power or procuring renewable energy supplies. However, the value of the 

partnership may decline over time, if the utility is experienced in marketing value-added 

products. 

• Leading customers to wonder why the utility is not offering the product in-house. 

However, marketing the program exclusively under the utility brand and essentially 

hiding the marketer’s participation can mitigate this concern. 

• Giving customers the impression that the product is more expensive than if it were 

offered by the utility in-house. Again, marketing the program under the utility’s brand 

can mitigate this concern. 

• Implementing new programs that involve lengthy or delayed regulatory approval 

processes. It can be difficult for marketers to invest heavily in start-up activities for new 

programs, if revenues from program participants are delayed. 

7
Issues in Designing and Implementing a Partnership 

There are a variety of issues involved in designing and implementing a green power program in 

partnership with one or more independent marketers. This section provides an overview of these 

issues, such as selecting a marketer and entering into a contract, co-branding, determining the 

product design and supply sources, and determining respective roles for marketing and 

administering the program. 

Selecting a Marketer—The process of selecting a marketer may differ, depending on whether the 

program is mandatory or voluntary, and whether it is offered in a competitive or regulated 

electricity market. Under voluntary partnerships, utilities generally select marketers either 

through a competitive solicitation process (i.e. request for proposals) or through private 

negotiations. By issuing a request for proposals, a utility may receive a greater number of 

responses and encourage competition. On the other hand, private negotiations with individual 

marketers enable the two parties to design the program more collaboratively, with direct 

discussion between the two parties. In this way, the utility may be better able to communicate its 

preferences in the design of the program. 

For default-supplier programs, there is generally interest in a competitive solicitation process 

because these programs are offered in states with retail market competition. Utilities may also 

simply establish criteria for qualifying marketers and allow participation by any marketers that 

meet the criteria. 

Number of Marketers—Most voluntary partnerships involve a single marketer teaming with a 

utility. This has the advantage of simplicity and provides greater incentive for the marketer to be 

fully invested in the program. Involving more than one marketer is likely to create a disincentive 

for each marketer to invest resources in promoting the program, be confusing to customers, and 

make it more difficult to administer the program. 

The use of multiple marketers has typically been limited to default-supplier green power 

programs in competitive electric markets, where the program is being offered to small customers 

in lieu of retail competition. Most of these programs are designed to encourage competition 

between marketers and provide a variety of green power options to consumers. Some programs 

have restricted the number of marketers, in order to minimize customer confusion and to make it 

worthwhile for marketers to participate. In some cases, programs have been left open to any 

qualifying marketer—which is the closest approximation to a competitive market—but this 

approach has a number of disadvantages, in that it 1) provides marketers little incentive to invest 

heavily in marketing, 2) may lead to an unwieldy number of product options that cannot be 

easily described in bill inserts and other marketing materials, and 3) may provide greater risk of 

less-qualified or less-reputable marketers participating in the program. 

Contract Structure and Length—There are a variety of ways to structure contracts between 

utilities and third-party marketers. The contract can be designed so that the utility and marketer 

share the risks and revenues evenly—sharing the initial start-up and marketing costs as well as 

the profits. This has the advantage of vesting both parties in the success of the program, but may 

limit the number of cost-effective marketing approaches, because each party must evaluate the 

8
cost-effectiveness based on a lower fraction of revenues. Alternatively, contracts can be 

structured so that the marketer is compensated with the majority of the revenues and paid on a 

per-customer or per-MWh basis, with a small portion of the revenues used to cover the utility’s 

administrative costs. This places most of the risk on the marketer, but also creates a strong 

incentive for the marketer to enroll customers in the program. 

The willingness of the marketer to assume risk depends partly on the contract length. Marketers 

typically prefer the longest contract length possible—at least three to five years—in order to 

recoup their start-up costs and to make it worthwhile to significantly invest in marketing. It takes 

time and resources to place staff, raise awareness, and enroll customers in the program; 

therefore, it is important that contracts are structured to allow the marketer time to gain sufficient 

momentum in the market. On the other hand, the utility may want to limit the length of the 

contract to keep its options open, encourage competition and continued commitment to the 

program, explore new ideas that other marketers may be able to offer, and limit its risk, if the 

partnership does not work well. It is necessary to balance these conflicting needs, in order to 

achieve an effective partnership. 

The preferred approach to structuring the contract depends partly on the utility’s motivation for 

offering the program and its willingness to assume risk. Regardless of the structure, however, it 

is important for the utility to be actively engaged in facilitating and promoting the program, or it 

is less likely to succeed. 

Product Design—Considerations in the design of a green power product include: 1) the 

renewable energy supply and whether it comes from existing or new sources, and from sources 

in-state or within some geographic region; 2) whether the product must be certified or verified 

independently; 3) whether the product is sold in kWh increments, as total use, or some fraction 

of a customer’s electricity use, and 4) the price. When partnering with a third party, the utility 

can either specify its preferred product design or leave it to the marketer, who may have more 

experience in product design, naming and pricing, and market messaging, as well as greater 

knowledge of available renewable energy resources. Generally, however, the product design is 

usually accomplished through some collaboration between the utility and the marketer to fit both 

the utility’s and the customers’ needs. 

Programs offered in competitive markets that involve multiple marketers may need to establish 

minimum product requirements to provide a level playing field among competing suppliers. This 

can help avoid a situation in which suppliers compete only on price at the expense of product 

quality. For this reason, some programs have established criteria for the resource mix, resource 

vintage, pricing, and product certification or verification. 

Co-Branding—Under a partnering arrangement, another issue to be addressed is whether the 

product will be marketed under the utility’s brand or co-branded. Including the marketer’s brand 

may appeal to customers who do not have a favorable opinion of the utility or question its 

environmental credentials. On the other hand, there are good reasons to stick with the utility’s 

brand, such as: 1) it is well-recognized by customers, 2) it may be less confusing to customers if 

only one brand and logo are included, 3) it may be easier to implement, particularly on marketing 

materials with limited space, and 4) it can eliminate customers’ concerns about why the utility is 

9
not offering the program in-house or whether it might cost more because a third party is 

involved. 

It is important to establish at the outset of the program how co-branding will be implemented. 

Co-branding can be accomplished by either branding the product under the marketer’s brand or 

including the marketer’s name and logo on promotional materials and formally recognizing its 

role in implementing the program. 

Determining Respective Roles—It is also important to define roles for the utility and marketer at 

the outset. The division of duties will depend on the core capabilities of the parties and the 

reason for retaining the marketer in the first place. Roles are likely to differ to some degree in 

mandatory and voluntary partnerships. 

Typically, third-party marketers provide program supplies and/or marketing services, although 

the utility often plays a role in marketing the program as well. In some cases, marketers develop 

annual or periodic marketing plans, which are subject to the utility’s approval, and take the lead 

in implementing these plans. The third-party marketer often will also fully design the marketing 

collateral. However, the utility may play a role in designing marketing materials and messaging, 

implementing supplemental marketing campaigns, conducting analyses to target customers (or 

sharing data with the marketer for this purpose), and managing the customer contact through 

mailings or facilitating events. Perhaps one of the most important functions of the utility program 

manager is to act as a facilitator among the various groups within the utility (call center, graphic 

arts/communications, billing, etc.) to enable the marketer to be successful. Also, the utility 

program manager may be able to leverage marketing activities already underway at the utility to 

more cost-effectively market the program. 

Generally, marketers play a limited role in program administration because utilities are already 

well-positioned to undertake administrative functions, such as enrolling and billing customers, 

managing call centers, and handling customer communications. Marketers may play a role in 

training call center staff and answering specific enrollment and billing questions. In addition, 

marketers may be involved in other administrative duties, depending on the utility’s needs. In 

default-supplier programs, marketers are typically responsible for customer enrollments, which 

are handled through processes established for the competitive electricity market. 

10
Case Studies of Utility-Marketer Partnerships 

This section provides a number of case studies of utility-marketer partnerships, based on 

interviews with utilities, marketers, and public utility commission (PUC) staff. The case studies 

were selected to represent programs offered in both competitive and traditionally regulated 

electricity markets and to reflect diversity in program variables, such as the size and type of 

utility, the marketing partner selected, geography, program design (e.g., single versus multiple 

marketer approach), and whether the program was voluntary or mandatory. Table 3 summarizes 

the case studies examined. Voluntary partnerships are presented first, followed by partnerships 

required by state law or stipulated as part of merger-settlement agreements. 

Table 3. Overview of Utility-Marketer Partnership Case Studies 

Utility State Utility 

Type Partner Launch Year Market Type Reason for Partnering 

City of Palo Alto 

Utilities CA Municipal 3 Phases Energy 2003 Regulated Voluntary 

NYSEG/RG&E NY Investorowned Community Energy 2002 Competitive Voluntary 

Florida Power and 

Light FL Investorowned 

Green Mountain 

Energy 2004 Regulated Voluntary 

PECO PA Investorowned Community Energy 2004 Competitive Merger 

Settlement 

National Grid 

MA 

NY 

RI 

Investorowned Varies by State* 2002- 

2004 Competitive 

Merger 

Settlement/ 

Voluntary 

United 

Illuminating, CL&P CT Investorowned 

Community Energy, 

Sterling Planet 2005 Competitive State Law 

PacifiCorp OR Investorowned 

3 Phases Energy 

Services 2002 Regulated/ Competitive** State Law 

Portland General 

Electric OR Investorowned 

Green Mountain 

Energy 2002 Regulated/ Competitive** State Law 

* Includes Community Energy, EnviroGen, Green Mountain Energy, Mass Energy, People’s Power and 

Light, and Sterling Planet. 

** In Oregon, residential or small commercial customers do not have direct access to competitive 

suppliers. Instead, the utilities are required to offer these customers options, including renewable energy 

options. 

 

Voluntary Partnerships 

City of Palo Alto Utilities 

In June 2003, the City of Palo Alto Utilities (CPAU) partnered with 3 Phases Energy to modify 

and rebrand its three-year-old green pricing program. The utility sought an external partner to 

market the program, because the utility’s original in-house program, Palo Alto Future Green, 

was not achieving acceptable participation levels and was losing customers. As a result, CPAU 

11
decided to seek a green marketing specialist to assist with a redesign and relaunch of the 

renewable energy program. 

To select a marketer, CPAU issued a request for proposals (RFP), which established some 

product-design guidelines (such as 100% new and emissions-free resources), but left other 

design and marketing aspects to the bidders. CPAU selected 3 Phases Energy to be its partner 

and entered into a five-year agreement that allows the utility to purchase renewable energy 

certificates (RECs) for a fixed megawatt-hour price, with an annual renewal option. Under the 

contract, the MWh price (which includes marketing costs) declines when a certain sales 

threshold is reached. The utility only purchases enough RECs to meet customer subscriptions. In 

this structure, the marketer assumes much of the risk and, thus, is motivated to market the 

program effectively to increase sales. The utility viewed the lower risk as a primary advantage of 

the partnership, which played a role in the utility’s initial motivation for seeking a third-party 

marketer. 

Together, CPAU and 3 Phases launched the PaloAltoGreen Program on June 1, 2003.3

 Under the 

program, the utility’s residential and small commercial customers can purchase renewable 

energy for 100% of their electricity needs at a premium of 1.5¢/kWh above standard electricity 

rates. Medium- and large-business customers can purchase 1-MWh blocks for $15 per block. 

The product is a blend of 97.5% new wind and 2.5% new solar, and is Green-e certified.4 The 

wind energy is procured from the Bonneville Power Administration from wind projects in 

Oregon, Washington, and Wyoming; and the solar energy is supplied from large-scale solar 

installations in northern California.5

 

The product is marketed under the utility brand (PaloAltoGreen) with no mention of the 

marketer. CPAU was not interested in co-branding, because it did not want consumers to 

question why the utility was not administering the program in-house. There were also concerns 

that mention of a third-party marketer would lead customers to believe that the program was 

more expensive to administer. In reality, the success of the program—and the volume of 

renewable energy sold—has lowered administrative costs, compared to the utility’s initial 

offering. In addition, the marketer was comfortable using just the utility brand. 

The utility handles all program administration and customer contact to offer a seamless product 

and protect customer privacy. CPAU manages customer enrollment, sends out mailings, and 

tracks renewable energy sales. It also manages the call center and trains call center staff, with 

assistance from the marketer. A portion of the program revenues are used to cover the utility’s 

costs of program administration. 

Program marketing is primarily the responsibility of 3 Phases, although the utility helps design 

marketing pieces and campaigns. The utility also has final say on all marketing campaigns and 

 

3

 News Release, May 6, 2003, 3 Phases Energy. “City of Palo Utilities Announce Partnership with 3 Phases Energy 

to Launch New Wind and Solar Offering, Palo Alto Green.” http://www.3phases.com/news/news_5_6_03.htm. 4

 Launched in 1997, Green-e is a voluntary certification and verification program that sets standards for renewable 

electricity-based products sold in North America. See http://www.green-e.org/ 5

 City of Palo Alto Utilities, PaloAltoGreen Program http://www.cpau.com/programs/green/generation.html, 

accessed March 13, 2006. 

12
approves a quarterly marketing plan submitted by the marketer. From the utility’s perspective, 

this arrangement has worked well. Program marketing has included bill stuffers, bangtails, a 

“welcome kit,” an e-mail newsletter designed to keep customers informed of the impacts of the 

program, news conferences to publicize large purchases, and community partnerships. 

Occasionally, the marketer has wanted to be more aggressive or use marketing approaches (such 

as door-to-door marketing) that the utility has been unwilling to support, because they do not fit 

within its culture. Nevertheless, the utility program manager noted that, because of the partnering 

arrangement, the program has been given more flexibility internally to be innovative and try 

different tactics (such as yard signs and bangtails) that were not previously used by the utility. 

Going forward, CPAU is considering conducting it own resource procurement, now that it has an 

established base of participants. This would allow the utility to pursue longer-term power 

purchase contracts for its renewable energy supplies, rather than relying on RECs. In this case, 

the utility would need to restructure its contract with the marketer to obtain marketing services 

only. 

Results and Lessons Learned 

The PaloAltoGreen program has well-exceeded its initial goal of 5% customer enrollment over 

five years and, in fact, met that goal in the first six months. In comparison, the utility’s original 

program achieved less than 1% penetration in three years of operation. As of December 2005, 

more than 3,700 customers—or nearly 14% of the utility’s customer base—were enrolled in the 

PaloAltoGreen program and collectively purchased more than 30 million kWh of renewable 

energy annually. The program model is being replicated by other municipal utilities in 

California, such as Silicon Valley Power, with similar success. 

From the utility’s perspective, several factors have contributed to the success of the program. 

First, the partnership enables the utility and the marketer to leverage their individual strengths by 

taking advantage of 3 Phases’ renewable energy marketing and procurement expertise, and 

CPAU’s reputation and access to customers. The program’s structure provides an incentive to the 

marketer to make the program successful, while limiting the utility’s risk. Partnering enabled the 

utility to promote the program in new and innovative ways, beyond those traditionally used by 

the utility’s in-house marketing staff. Finally, the partnership and its early success helped 

generate internal interest in, and support for, the program among various utility departments—

from the mail house to the communications department—which has also helped promote the 

program. 

From the marketer’s perspective, several factors have led to success. The utility program 

manager is enthusiastic and very supportive, and there is widespread support within the utility 

for the program. In addition, the product characteristics are very appealing, containing resources 

preferred by customers (new wind and solar) and carrying Green-e certification. Also, the 

product is sold to customers for 100% of their electricity needs at a relatively low premium of 

1.5¢/kWh. Another success factor is the progressive nature of the community with demographics 

conducive to marketing green power, and a utility that is well-regarded in the community. 

13
NYSEG/RG&E 

In 2002, New York State Electric and Gas Corporation (NYSEG) partnered with Community 

Energy Inc. to provide its customers in upstate New York with a green power purchase option. 

This was the first voluntary partnership between a marketer and a utility in the United States. 

The partnership was supported by a five-year grant from the New York State Energy Research 

and Development Authority (NYSERDA), which was designed to encourage entities to offer 

voluntary green power programs in the state’s competitive retail electricity market (NYSERDA 

2001).6

 The program was later expanded to NYSEG’s sister company, Rochester Gas and 

Electric (RG&E), in April 2004. 

The product design was influenced by the terms of the NYSERDA grant. The grant dictated that 

the renewable product be supplied from 20% new renewable energy sources in the initial year 

(increasing by 5% annually), and that 75% of the product be supplied from wind or solar 

resources.7

 NYSERDA also required that the product comply with the state electricity source 

disclosure laws. The final product—based on these guidelines and developed collaboratively by 

NYSEG and Community Energy—is a 100% new wind product marketed under the Community 

Energy brand NewWind Energy. It is sold in 100-kWh monthly increments for $2.50 (or a rate 

premium of 2.5¢/kWh), with a minimum purchase of 200 kWh for residential customers. Price 

discounts are available for large purchases by nonresidential customers. The program is supplied 

from the 30-MW Fenner wind project near Syracuse, New York. Program materials carry the 

NYSEG brand and mention that the program is a partnership with Community Energy, while the 

product carries the Community Energy NewWind Energy brand. 

Both NYSEG and Community Energy share the program risks and revenues. In this way, both 

parties are vested in the success of the program. Both the utility and marketer are involved in the 

marketing and program administration, while Community Energy procures the renewable energy 

supplies. The parties jointly develop an annual marketing plan with NYSEG leading its 

implementation. For example, NYSEG issues semiannual bill inserts, trains call center 

employees, enrolls customers in the program, and coordinates marketing to large commercial and 

industrial customers. 

Because this was the first voluntary partnership between a utility and a marketer, NYSEG 

assumed that it was in a better position to market the program in-house, given its marketing 

capabilities and staff, and access to customers. Going forward, Community Energy plans to play 

a greater role in designing marketing materials, developing messaging, and planning promotional 

events. 

Customer billing has been a particular issue for the program. Although the utility bills customer 

participants, the charge did not appear as a line item on the standard customer electricity bill 

prior to 2006, because the utility had difficulty modifying its billing system to accommodate an 

extra charge. Instead, customers received a separate bill or had the charge applied monthly to 

their credit cards. There is some concern that this may have limited enrollment because 

 

6

 [NYSERDA] New York State Energy Research and Development Authority. 2001. Pon 599-01: Green Marketing 

Support Programs. http://www.nyserda.org/funding/599PON.html 7

 NYSERDA defined “new” product as those renewable resources in service after January 1, 2000. 

14
customers may prefer to receive only one bill or be hesitant to give out their credit card numbers. 

The impact of the billing system issue on enrollment may only become clear once the 

modification is made. Community Energy plans to expand its marketing role, once the upgrade is 

fully implemented. 

Results and Lessons Learned

As of December 2005, more than 5,300 customers were enrolled in the NYSEG and Rochester 

Gas and Electric programs. These customers purchase nearly 45 million kWh annually, with 

more than half of sales to nonresidential customers. The overall customer participation rate of 

0.4% is below the national average for green pricing programs, which is about 1.3%. Once the 

billing system modification is implemented, the program may be poised for growth. 

Although NYSEG and Community Energy did not establish specific performance targets for the 

green power program, the utility views the program as a success. NYSEG attributes the success 

largely to the fact that both parties share the program risks and financial rewards. Therefore, both 

have a vested interest in its success. In addition, teaming with a third-party marketer allowed the 

program to take advantage of the NYSERDA grant, which has helped cover implementation 

costs and reduce program risks. 

Florida Power and Light 

In February 2004, Florida Power and Light (FPL) teamed with Green Mountain Energy 

Company to offer a renewable energy option to the utility’s residential customers. FPL 

voluntarily initiated the program and opted to work with a third party, because it thought that it 

could benefit from having a partner with specific renewable energy marketing and procurement 

expertise. 

The marketer was chosen through a competitive-bid process. Although the RFP specified a 

preference for Florida-based resources, it left much of the product design and pricing to the 

bidders. Development of the final product involved significant collaboration between the utility 

and the marketer. The successful bidder, Green Mountain Energy, provided input on consumer 

preferences for renewable energy resources, while the utility contributed an understanding of 

customer demographics and the demand for locally produced renewable energy. 

Under the Sunshine Energy program, customers can purchase renewable energy in 1,000-kWh 

increments each month at a premium of $9.75 above standard electricity rates. The product is a 

blend of new wind, landfill gas, and biomass resources. In addition, the utility pledges to build 

150 kW of new solar capacity for every 10,000 enrolled customers. 

Green Mountain Energy is responsible for obtaining the renewable energy supplies and for 

implementing the majority of the marketing—and, therefore, assuming much of the program 

risk. The marketer is compensated for each new customer, with a small portion of the revenues 

used to cover the utility’s administrative costs. 

15
The program is promoted exclusively under the utility brand, with no mention of the marketer. 

FPL decided against co-branding for several reasons, including 1) customers were accustomed to 

utility-offered programs, 2) co-branding with a lesser-known third party could result in customer 

confusion, and 3) the utility has an established green brand—it relies heavily on natural gas for 

electricity generation, and its sister company (FPL Energy) is the largest wind developer in the 

United States. 

Green Mountain Energy plans and leads the marketing, including market analysis and targeting, 

product messaging, and development of marketing materials. The marketer also provides scripts 

to the FPL call center, promotes the program at events, and uses other marketing channels such 

as direct mail and telemarketing. The company also enrolls customers in the program, except for 

those who sign up by returning utility bill inserts. 

FPL approves all messaging, marketing materials, and campaigns, and has also developed some 

marketing elements in-house, such as the product name, logo, and other graphics. The utility 

handles many administrative tasks, including processing bill-insert enrollments, communicating 

with customers through the call center and the utility’s Web site, and billing customers—the 

program charge appears as a line item on the customer’s standard utility bill. 

The recent hurricanes have posed a particular challenge to program marketing. Because the 

utility and many homeowners were preoccupied with power outages and recovery activities, the 

utility curtailed program marketing for much of the hurricane season. Although customers could 

still enroll in the program, it was not actively marketed. Despite these limitations, the utility 

included three promotional bill inserts in 2005. 

Results and Lessons Learned

Measuring the program success and developing performance metrics have been a challenge for 

the utility, particularly with the marketing curtailments. Initially, the partners set a goal of 

enrolling 1% of utility customers within the first few years. At the end of 2005―less than two 

years after the program launch—23,000 residential customers had enrolled, representing 0.6% of 

the utility’s residential customers. While the 1% goal has not yet been met, both parties have 

been pleased with the program’s success. Program revenues have exceeded the utility’s 

expectations outlined in its three-year plan, because customer retention has been higher than 

expected. The program grew dramatically during 2005, with the number of participants more 

than doubling and annual purchases of renewable energy reaching 225 million kWh. As a result, 

the program ranked fourth nationally in renewable energy sales and sixth in customer 

participants in 2005.8

From the utility’s perspective, it has benefited substantially from the partnership, because it had 

little in-house experience with obtaining renewable energy supplies and marketing renewable 

energy to end-use customers. The marketer has also added value by using effective marketing 

techniques that the utility would not have used on its own. The primary partnership challenges 

 

8

 “NREL Highlights Leading Utility Green Power Programs.” News release dated March 15, 2006. 

(http://www.eere.energy.gov/greenpower/resources/tables/pdfs/0306_topten_pr.pdf) See also: 

http://www.eere.energy.gov/greenpower/markets/pricing.shtml?page=3

16
have been coordination and obtaining utility approval for marketing activities, which can be 

time-consuming. 

Mandatory Partnerships 

PECO 

As a result of a settlement agreement reached during its corporate merger with Unicom, PECO 

agreed to team with Community Energy to offer a green power option to its retail consumers. 

Despite this requirement, PECO was interested in a marketer partnership to reduce risk and startup costs, and thought it could benefit from Community Energy’s experience and understanding 

of the renewable energy market. By teaming with a third party to share some of the start-up 

expenses, PECO was able to make the program more profitable in the early years, which fit its 

business strategy. 

The partnership details were not specified in the settlement agreement, and the two companies 

worked collaboratively to design the program. To avoid regulatory challenges, the partners 

agreed to propose a program specifically for customers who chose PECO as their electricity 

provider in Pennsylvania’s competitive retail electricity market. PECO notes that this has 

reduced the flexibility of the program, because it limits the utility’s ability to offer price 

discounts to small commercial and industrial customers, and to offer the program to customers 

who switch suppliers. However, the parties were willing to sacrifice some flexibility to gain 

regulatory approval. 

The PECO WIND program was unveiled in May 2004 and gives residential and business 

customers the option of purchasing wind energy in 100-kWh increments each month for an 

additional charge of $2.54—or a rate premium of 2.54¢/kWh. The surcharge is added to the 

participating customer's monthly electricity bill. Price discounts are available for large purchases 

of 2,600 MWh/year or greater. The product pricing was determined by supply contracts and 

consistency with other utility programs at the time, which was considered to be defensible with 

regulators. The product is supplied from a new 64.5-MW wind power facility in Waymart, 

Pennsylvania. 

Although the parties agreed to co-brand the product, the agreement contained no definition on 

this point, creating an implementation challenge. The product is branded as PECO WIND, but 

promotional materials indicate that Community Energy supplies the wind energy. And all 

marketing materials contain three logos—the product logo and the two company logos. From this 

experience, both parties have learned the importance of clearly defining the brand identity and 

the practical implementation of co-branding prior to the launch of the product. 

Community Energy leads the effort to develop marketing materials and design marketing and 

outreach campaigns, although the utility reviews and approves the marketing plans. Event 

marketing and canvassing has been a key element of the program’s successful launch. PECO 

makes space available on four to eight bill inserts a year—which are an important mechanism for 

enrolling customers—and the utility’s large account managers work with the marketer’s account 

managers to sell the product to commercial customers. 

17
Community Energy secured enrollment incentives ($/customer) from the Sustainable 

Development Fund, which has provided another advantage to the partnership. These incentives 

have helped reduce customer-acquisition costs and have encouraged the marketer to spend more 

resources overall on the program. 

The incentives have also enabled Community Energy to test more expensive marketing 

techniques and, thus, overcome one of the key challenges of the shared-revenue partnering 

approach—that marketing is often limited to the most cost-effective channels. Because PECO 

had profitability goals, PECO and Community Energy negotiated a roughly equal split of the 

long-run profits. The utility acknowledges that if it had provided Community Energy with higher 

margins, the marketer could have more readily implemented marketing tactics with higher 

acquisition costs. 

PECO undertook the expense of upgrading its billing system to include the green pricing charge 

as a line item on the standard electricity bill. The utility also provides the marketer with its 

customer lists, which, from the marketer’s perspective, is an important contributor to the 

program’s success. Community Energy plays a significant role in program administration, taking 

responsibility for adding and dropping customers, processing enrollments, and handling 

telephone and Web inquiries about the program. 

Results and Lessons Learned 

The partnership set modest goals for both profitability and volume sales. Although the 

commercial-sector goal was not met, the residential-sector goal was substantially exceeded. 

PECO reports that more than 22,000 customers (or 1.5% of its customer base) had enrolled in the 

program at the end of 2005, collectively purchasing about 45 million kWh during the year. The 

program was ranked seventh nationally in the number of participating customers.9

From the utility’s perspective, the partnership has been mutually beneficial. In addition to its 

renewable energy market expertise and credibility, Community Energy brought marketing 

dollars and access to enrollment incentives, which resulted in a larger marketing budget than 

PECO would have been able to secure on its own. In addition, teaming with a marketer was 

important politically for gaining regulatory approval to offer a program. For its part, the utility 

has contributed its name recognition, credibility, and access to customers, as well as in-house 

expertise from marketing other products, such as the ability to conduct sophisticated marketsegmentation analysis. 

The marketer has benefited through sharing the marketing risk, gaining greater access to the 

utility’s customers (particularly residential and small commercial customers), and the ability to 

leverage the utility’s positive reputation and existing customer communication channels. As an 

independent marketer, Community Energy has found it particularly challenging to reach small 

customers cost-effectively in the competitive retail market without working with a utility. 

 

9

 Ibid. 

18
PECO recommends a “partnering” approach to any utility with limited knowledge of green 

energy markets, or who is not prepared to market value-added products. The utility also 

recognizes the significant initial benefits that a marketer can bring to understanding the green 

power marketplace. However, PECO thinks that the value of the partnership has diminished 

somewhat over time, as the utility has acquired market knowledge and gained experience in 

product marketing and program implementation. And the utility gave up some of the long-term 

profitability in exchange for risk reduction and short-term profitability. On balance, the utility 

has found the early partnership benefits of market experience, accelerated profitability, and 

reduced risk to be well worth the trade-off of sharing long-run profits with the marketer. 

National Grid 

As a result of a merger settlement agreement, National Grid began offering a renewable energy 

program to customers in the former Niagara Mohawk service territory in upstate New York in 

September 2002. Sometimes referred to as the “open access” model of utility-marketer 

partnerships, the GreenUp program allows any marketer to offer customers one or more green 

power options at an additional cost to the basic electric service. The utility provides the avenue 

to reach customers. While required in New York, National Grid voluntarily expanded the 

GreenUp program to its distribution utilities in Massachusetts (formerly Massachusetts Electric 

and Nantucket Electric) in September 2003 and Rhode Island (formerly Narragansett Electric) in 

March 2004, to stimulate competition in these retail electricity markets and provide additional 

service options to residential and small commercial customers.10

The basic goal of establishing the GreenUp program was presented in the merger petition of 

Niagara Mohawk and National Grid, but the settlement agreement did not include specifics, and 

instead directed the parties to create more detailed guidelines for implementation.11 As a result, 

the parties—which included environmental groups, consumer advocates, and several green 

energy suppliers and marketers—participated in a six-month public process to develop a more 

detailed program design. The final guidelines address marketer participation, customerenrollment procedures, utility marketing and environmental disclosure requirements, and the 

utility-marketer interface. 

In New York, participating marketers must pay for the utility billing system upgrades needed to 

incorporate the GreenUp charge on the utility bill. While this requires an up-front investment 

from the green energy marketer, the resulting access to the utility’s billing system provides a 

ready avenue to potential customers. In Rhode Island and Massachusetts, National Grid absorbed 

the cost of the necessary billing system modifications. 

Although National Grid does not require marketer certification, each marketer must follow state 

protocols for electricity market participation. In Massachusetts and Rhode Island, retail 

marketers must obtain an electricity broker’s license; while, in New York, the marketers must be 

registered. 

 

10 The program was not expanded to the company’s New Hampshire territory because the limited number of 

National Grid customers in that market (45,000) made program investment economically unattractive for marketers. 11 State of New York Public Service Commission, Opinion No. 01-06, Case 01-M-0075, Opinion and Order 

Authorizing Merger and Rate Plan, Niagara Mohawk and National Grid, December 3, 2001. 

19
Product details, such as pricing and resource mix, are defined by the marketers. However, 

suppliers are required to disclose the product content and resource mix in accordance with state 

fuel-mix disclosure policies. In New York, marketers are also required to match supply with 

sales on a six-month basis. Third-party certification is not required, but some marketers have 

offered certified products.12

As of February 2006, four marketers were offering green power options in National Grid’s New 

York service territory, with prices ranging from 1¢/kWh to 2.5¢/kWh above basic service rates. 

National Grid customers in Rhode Island and Massachusetts also each have access to four green 

power suppliers with product prices ranging from 1.5¢/kWh to 2.4¢/kWh for 100% renewable 

energy use (Tables 4-6).13 Most products are renewable energy blends, containing wind, 

biomass, small hydro, or solar. 

While National Grid promotes the overall program, it does not promote specific options or 

suppliers but instead refers customers to the participating marketers for additional product 

information. In Massachusetts, the utility provides customer lists to the marketer but is barred 

from doing this in New York or Rhode Island. 

Participating suppliers are responsible for marketing their own products and can use the 

GreenUp program logo on their promotional materials, subject to utility review and approval. 

National Grid helps market the program through a GreenUp Web page, by educating its 

customer-service representatives, and by issuing bill inserts that describe the program options. 

The utility also includes a postage-paid enrollment card for its customers. 

In New York, National Grid was required to issue and pay for an annual GreenUp bill insert for 

the first three years (through 2004) as a condition of the merger-settlement agreement. In 2005 

and going forward, the utility will continue to issue an annual bill insert, but the expense will be 

shouldered by participating marketers, similar to Rhode Island and Massachusetts. Generally, the 

marketers think that a single bill insert is insufficient to market the program. In Rhode Island, 

National Grid has agreed to issue two bill inserts per year after initially agreeing to only one. 

Because the program is open to multiple suppliers, creating the bill inserts has been a challenge 

for all of the parties. With limited print space, it is difficult to include enough information on the 

available product choices. It is also difficult to get consensus on how to present the information. 

The initial design and implementation required coordination of different opinions about the 

messaging, layout, and overall design. With subsequent bill inserts, the process has become less 

onerous, but the issue of providing adequate product information to customers has remained. The 

utility has worked to address these concerns by providing additional space on the bill inserts. 

In those cases where the marketers pay the cost of the bill insert, the total number of marketers 

participating can impact the cost-effectiveness of the bill insert as an enrollment tool. In Rhode 

Island, one marketer recently decided to not participate in the bill insert, citing cost concerns. 

 

12 For example, some products are certified by either Green-e (www.green-e.org) or Environmental Resources Trust 

(ERT) (http://www.ert.net/). 13 A fourth supplier, Clear Sky Power, was recently added to the Massachusetts and Rhode Island Green-up

programs but product information was not available to be included in this report. 

20
While this resulted in higher costs for the two remaining marketers, one noted that the greater 

market share compensated for the additional cost. 

Customers can enroll in the program by returning the mail-in cards included with the utility bill 

inserts or by contacting marketers directly. To process enrollments, the marketers provide the 

utility with each customer’s account number and product preference. The utility then confirms 

the enrollments, adds the charge to each customer’s electricity bill, and tracks the amount of 

power purchased through the program. The marketers deliver RECs to the utility through the 

New England (NEPOOL) GIS tracking system. 

Support from state system benefit funds has helped provide overall marketing support for the 

GreenUp program. In Rhode Island and Massachusetts, a third-party promoter (SmartPower) has 

conducted advertising campaigns and promoted the program with municipalities. And 

NYSERDA and the Rhode Island Renewable Energy Fund have provided significant incentives 

for marketers to enroll customers, which has helped reduce customer-acquisition costs. 

Results and Lessons Learned

Although specific performance goals or targets were not established, the program has exceeded 

the utility’s expectations. As of the end of December 2005, there were nearly 21,000 customers 

participating in the program in all three states, with about 12,500 in New York (0.7% of eligible 

customers), 4,900 in Massachusetts (0.4%), and 3,600 in Rhode Island (0.8%). Collectively, 

customer participants purchased more than 130 million kWh in 2005, making it one of the largest 

utility green power programs nationwide—the program ranked among the Top 10 programs for 

sales and customer participants in both 2004 and 2005, but participation rates are below the 

national average. 

While the multi-supplier “open-access” design of the GreenUp program closely approximates a 

competitive market environment by offering customers multiple product choices and enabling a 

range of suppliers to participate, it also poses a number of implementation challenges. It has been 

a challenge to achieve consensus among the suppliers on how best to present product information 

on collaborative marketing materials. Further, presenting too many product options can be 

confusing to customers. 

The open-access design also provides a more limited incentive for marketers to invest in the 

program, particularly with a large number of supplier participants. Most of the marketers have 

limited their individual marketing and relied heavily on the utility-bill inserts. Some marketers 

believe that it is equitable for the utility to share the marketing costs because the utility receives 

public relations benefits from the program’s existence, even if it doesn’t share in the direct 

profits. On the other hand, the utility and some regulators have raised concerns about imposing 

program costs on nonparticipants. Finally, both the utility and the marketers agree that program 

implementation would be easier with fewer suppliers, but this would limit customer choices. 

21
Table 4. New York GreenUp Options 

Utility Partner Product Name Product Content Product 

Price 

Generation 

Location Certification 

NewWind 

Energy 

and Water

60% New Wind 

40% Small Hydro 1.3¢/kWh New York ---- Community 

Energy NewWind 

Energy 100% New Wind 2.5¢/kWh New York ---- 

Sterling Planet Sterling Green 

40% New Wind 

30% Small Hydro 

30% Bioenergy 

1.5¢/kWh New York ERT 

Green Mountain 

Energy Pollution Free 50% New Wind 50% Small Hydro 1.5¢/kWh New York Green-e 

EnviroGen Think Green! 75% Biomass 

25% Small Hydro 1.0¢/kWh New York ---- 

Table 5. Selected Massachusetts GreenUp Options 

Utility Partner Product Name Product Content Product 

Price 

Generation 

Location Certification 

Community 

Energy 

NewWind 

Energy and 

Water 

70% Small Hydro 

30% New Wind 2.0¢/kWh Northeast ---- 

Sterling Planet Sterling 

Premium 

50% Small Hydro 

30% Bioenergy 

15% New Wind 

 5% New Solar 

1.5¢/kWh New 

England ERT 

Mass Energy 

Consumers 

Alliance 

New England 

GreenStart 

75% Small Hydro 

19% New Biomass 

 5% New Wind 

 1% New Solar 

2.4¢/kWh New 

England ---- 

Table 6. Selected Rhode Island GreenUp Options 

Utility Partner Product Name Product Content Product 

Price 

Generation 

Location Certification 

Community 

Energy 

NewWind 

Energy and 

Water 

60% Small Hydro 

40% New Wind 1.5¢/kWh Northeast ---- 

People’s Power 

& Light 

New England 

GreenStart RI 

70% Small Hydro 

29% New Wind 

 1% New Solar 

1.5¢/kWh New 

England 

---- 

Sterling Planet Sterling 

Supreme 

40% Small Hydro 

25% New Solar 

25% Bioenergy 

10% Wind 

1.98¢/kWh New 

England ERT 

22
Connecticut: CL&P and UI

In June 2003, the Connecticut legislature amended the state’s Electric Restructuring Act to, 

among other things, require the state’s two electric distribution companies—Connecticut Light 

and Power (CL&P) and The United Illuminating Company (UI)—to offer their customers green 

power options.14 The legislation called for the options to be developed and implemented by 

third-party companies selected through a competitive bidding process, and enabled the 

Connecticut Department of Public Utility Control (DPUC) to determine the program terms and 

conditions. Shortly thereafter, the DPUC initiated a docket to develop the program.15

The DPUC established several working groups of interested parties to develop consensus 

documents on program design and structure. The working groups focused on marketing and 

operations, treatment of renewable energy certificates (RECs), and the design of legal contracts 

and solicitations. On October 24, 2004, the DPUC issued a final decision regarding the structure 

for the “Alternative Transitional Standard Offer” (ATSO) program (later renamed 

CTCleanEnergyOptions), based on the consensus of the working groups. The DPUC instructed 

the distribution utilities to select at least two green power suppliers for the program, subject to 

the commission’s approval. 

Eligible resources were defined to include Connecticut Class I and Class II renewable resources 

(as defined for the state’s renewable portfolio standard)16 or Green-e certified resources. 

Although Green-e certification is not required, the product offerings must meet Green-e labeling 

and content disclosure guidelines, including product content and emissions impacts. The DPUC 

established a price cap for product offerings and allowed the use of RECs. Any RECs sourced 

from outside NEPOOL must be Green-e certified or accompanied by electricity wheeled into 

NEPOOL. 

The utilities evaluated proposals using criteria established by the working groups, with final 

selection subject to DPUC approval. Proposals were evaluated on the following factors: 

renewable energy supply and marketing experience, financial performance, price and resource 

mix, the number of service options proposed, and the marketing plan. Community Energy and 

Sterling Planet were selected as the suppliers for the initial three-year period, with both offering 

renewable energy blends for 50% and 100% of the customer’s electricity use (Table 7). The 

CTCleanEnergyOptions program was launched on April 1, 2005. 

 

14 Connecticut Public Act 03-135, “An Act Concerning Revisions to the Electric Restructuring Legislation.”

http://www.cga.ct.gov/2003/act/Pa/2003PA-00135-R00SB-00733-PA.htm 15 DPUC, Docket No. 03-07-16, Investigation of Alternative Transitional Standard Offer Services for United 

Illuminating and CL&P Customers. 

16 Class I resources are defined as solar power, wind power, fuel cell, methane gas (landfill), ocean thermal, wave or 

tidal, run-of-river hydropower facilities (new and less than 5 MW), biomass (that does not result in depletion of 

resources, and low emission advanced renewable energy conversion technologies as well as electricity generated 

from any of these. Class II resources are defined as biomass and hydropower facilities (not qualifying under Class I) 

and producing minimal pollution. 

23
Table 7. Products Offered Through the CTCleanEnergyOptions Program 

Supplier/(Product) Product Content Product Price 

 50% Option 0.55¢/kWh Community Energy 

(NewWind Energy) 100% Option 

50% Wind 

50% Landfill Gas 1.10¢/kWh 

 50% Option 0.575¢/kWh Sterling Planet 

(Sterling Select) 100% Option 

34% Landfill Gas 

33% Wind 

33% Small Hydro 1.15¢/kWh 

The competitive suppliers lead the marketing effort, with assistance required from the utilities. 

The utilities must design (with input from stakeholders) and issue bill inserts twice annually (in 

the spring and fall) and provide the marketers with access to the program name and logo. 

The utilities also provide program information on their Web sites and provide scripts for callcenter staff to handle program inquiries. At their discretion, the utilities can promote the program 

to their employees or retail customers, in concert with conservation and demand-side 

management programs and other utility-sponsored events. The two utilities have yet to pursue 

these optional activities, although the program is less than a year old. 

The utilities are also responsible for enrolling customers via the Electronic Data Interchange 

(EDI) standards that were adopted for enrollment of alternate generation-supplied customers; this 

method was also selected for the renewable energy program to minimize costs. The utilities 

accept the bill inserts returned with customer bill payments and forward these inserts to the 

suppliers. The costs incurred by the utility to administer and market the program, including 

issuing the bill inserts, are recoverable through customer rates. The direct product cost is 

reflected as a line item on the regular utility bill of participating customers. 

The marketers are responsible for all other program marketing, and for following the marketing 

plans submitted under the solicitation. They must also submit quarterly updates to the DPUC on 

the progress and effectiveness of the marketing campaign. While the utilities handle the bill 

insert enrollments, the marketers enroll those customers who respond by phone or through the 

Web site. The marketers send the enrollment information (including each customer’s account 

number) to the utilities, who verify that the customer is eligible and credit-worthy. 

For event sign-ups, the marketers can obtain a “wet signature” from customers, indicating 

enrollment interest. In these cases, the utilities have assisted the marketers by providing the 

account identifier necessary to process the EDI enrollment transaction. However, the provision 

of this assistance is not a requirement of the program and can be terminated if it becomes too 

time-consuming. This assistance has been very important for the marketers, who report typically 

losing 20% to 50% of customers who enroll at events if they must later contact the customer to 

obtain an account number. It also makes the program appear more integrated to customers, who 

expect the marketers to be able to access account information for a program offered in 

conjunction with the utility. 

24
The CTCleanEnergyOptions program is also marketed by an independent nonprofit marketer, 

Smartpower, with support provided from the Connecticut Clean Energy Fund. SmartPower 

promotes the program through television and radio advertisements, Web sites,17 and working 

with community groups. Recently, SmartPower launched a “20% by 2010” campaign to 

encourage municipalities, faith communities, educational institutions, and businesses to purchase 

renewable energy for 20% of their electricity needs. The Connecticut Clean Energy Fund 

provides incentives to participating municipalities through the Connecticut Clean Energy 

Communities Program. Under the program, communities can receive free solar photovoltaic 

systems for community buildings by achieving specific participation goals.18 These programs 

have been effective in raising program awareness, generating local news coverage, and 

increasing enrollments. 

To coordinate marketing and implementation, the Connecticut Clean Energy Fund hosts monthly 

meetings of the program collaborators, including the utilities, marketers, DPUC, and 

SmartPower, to discuss implementation issues. All of the parties have found the meetings to be 

useful for resolving issues and for coordinating marketing efforts and messaging. 

Results and Lessons Learned

Although in place for less than a year, the program has met its initial performance targets. The 

DPUC established enrollment goals of 2,000 customers per supplier in the first year, 3,000 per 

supplier after 18 months, and 4,000 per supplier within two years. The DPUC reports that more 

than 6,000 customers were participating in the program at the end of 2005, which represents an 

overall participation rate of 0.4% of eligible customers. 

Generally, the utilities, marketers, and DPUC have been pleased with the program design and the 

decision to select two marketers through a competitive solicitation. The program has been 

relatively easy to implement, and coordination among the parties has been manageable, given the 

limited number of parties involved. The parties also agree that the program structure adequately 

addresses competitive market issues. And because the program is meeting its performance 

targets, the collaborators generally consider it a success. 

However, the program has faced a considerable challenge from the use of RECs. Because the 

marketers procure only RECs (and not electricity) to supply the program, program customers are 

subject to the fuel-cost increases associated with the electricity they receive from the utility. 

Although this is a common supply structure for default-supplier programs, green power 

customers have expressed confusion and concern as their electricity rates have gone up in recent 

months. Some customers do not understand why they are subject to rate increases resulting from 

higher fossil-fuel prices, when they are supporting renewable energy to meet their own electricity 

 

17 See the CTCleanEnergyOptions Web site at http://www.ctcleanenergyoptions.com. 18 Communities must commit to the “20% by 2010” campaign through a local town resolution and sign up 

customers to the CTCleanEnergyOptions program. To be eligible for PV systems, they must achieve any one of 

three thresholds: (1) 100 or more customer sign-ups, (2) a commercial customer that signs-up to purchase at least 

1 million kWh, or (3) a residential customer participation rate of 10% or more. 

25
needs. This has been a significant public relations issue for the program, and the utilities, 

marketers, and PUC are working to collectively address it. 

Regarding product design, marketers have raised the concern that they are locked into the 

resource mix and product price (the price can go down but not up) for the period of the contract, 

which may prove to be a challenge over time. However, consistency in the product mix and price 

are beneficial to participating consumers. 

Other unique aspects of the program that have been deemed beneficial are the monthly meetings 

of the collaborators, which have allowed the parties to coordinate activities and resolve issues; 

and the use of “wet signatures,” which has enabled marketers to more easily enroll customers 

through events.

Oregon: PacifiCorp and PGE 

In 1999, the Oregon State Legislature adopted legislation to restructure the state’s electricity 

market. The law required the state’s two investor-owned utilities— PacifiCorp (which operates 

as Pacific Power in Oregon) and Portland General Electric (PGE)—to offer a green power rate 

option to their residential and small commercial customers.19 Lawmakers sought to limit direct 

competitive market access to large commercial and industrial consumers but still provide retail 

product choices to smaller electricity customers. These alternative products were to be provided 

by the incumbent utilities. 

The Oregon Public Utility Commission (OPUC) established a stakeholder group to advise it on 

program structure and implementation. The Portfolio Options Committee (POC) is comprised of 

the utilities, nonprofits, community representatives, and other interested parties. In early 2001, 

the OPUC approved three renewable energy options: (1) a renewable resources block product, 

which allowed customers to buy one or more blocks of renewable power each month; (2) a 

blended renewable energy product containing a minimum of 50% renewable energy with at least 

15% coming from new renewable sources;20 and (3) an “environmental mitigation product,” 

which allowed customers purchasing the blended product to contribute an additional amount to 

be directed toward restoration of threatened or endangered fish species. Minimum productcontent standards, such as for new renewable energy content, were also established.21

With the advent of retail competition in 2002, the two utilities were required to solicit a single 

green energy marketer to supply and market the “renewable usage” and “habitat” programs for 

an initial 24-month period.22 The utilities were allowed to market the “block” products as 

separate utility products. Both utilities selected Green Mountain Energy Company as their 

marketing partner. 

 

19 Oregon Legislative Assembly, Senate Bill 1149, June 1999. 

http://www.puc.state.or.us/PUC/electric_restruc/billsum/sb1149.pdf 20 The remaining product content had to meet regional system average emissions as well as the state's siting standard 

for carbon dioxide emissions. 

21 The standards were based on the Renew 2000 green power product certification program for the Pacific 

Northwest, which has since merged with the Green-e program. 22 See Oregon Public Utility Commission, Direct Access Regulation: 

http://arcweb.sos.state.or.us/rules/OARS_800/OAR_860/860_038.html

26
The utilities also opted to co-brand the products. The “renewable usage” product, marketed 

under the brand “Green Mountain Energy Electricity,” was a blend of new wind (15%) and 

existing geothermal sources (85%). The “habitat” product, dubbed “Green Mountain Energy 

Salmon Friendly Plan,” offered the same renewable energy blend with the additional 

contribution dedicated to the Pacific Salmon Watershed Fund (Table 8). 

Table 8. Products Offered in Phase 1 of Oregon Portfolio Program (2002–2003) 

 

Utility Product Price Product Content 

Fixed Renewable 2.95¢/kWh 100% New Wind 

Renewable Usage* 0.78¢/kWh 85% Geothermal 

PacifiCorp 15% New Wind 

Habitat* 

0.78¢/kWh + $2.50 per 

month for salmon 

restoration 

 85% Geothermal 

 15% New Wind 

Fixed Renewable 3.50¢/kWh 100% New Wind 

Renewable Usage* 0.80¢/kWh 85% Geothermal 

 15% New Wind Portland General 

Electric 

Habitat* 

0.80¢/kWh + $2.50 per 

month for salmon 

restoration 

 85% Geothermal 

 15% New Wind 

* Product marketed in partnership with Green Mountain Energy Company. 

As the program progressed, a number of issues and challenges arose that required attention, 

including: 1) the relatively short contract length between the utilities and the supplier; 2) the 

potential to confuse or alienate customers with changes in the product content, price, or 

branding; and 3) the disincentives for marketers to expend significant marketing resources in the 

final contract year. 

With respect to contract length, the utilities and marketer found that the two-year contract period 

was too short a period for the marketer to recover its marketing investments. In addition, it 

challenged the ability of the parties to develop a broad working relationship and for the marketer 

to learn the intricacies of the program and the marketing territory. To address these concerns, the 

OPUC extended the contract period from two to three years for the second program solicitation. 

In 2005, the OPUC also granted the utilities the option of extending the marketing contract for 

up to three years before issuing another competitive solicitation. Both the utilities and marketers 

supported this change. 

To help address the issue of product quality and consistency, the OPUC increased the new 

renewable energy content requirement for the blended product to 30%, because the initial 

product offerings had exceeded the minimum requirements, and all stakeholders wanted to 

27
ensure continuous improvement. Also, local resources were now given preference in the 

selection process.23 

The two utilities also sought to address these challenges individually, with each taking different 

approaches. For the second-round solicitation, PacifiCorp made several RFP modifications to 

encourage product consistency, including setting a price target. PacifiCorp was able to secure 

two products from a new partner, 3 Phases Energy Services, with 100% new renewable energy 

content at the same price as the Phase 1 product offerings. By improving the product content—

while keeping the price constant—the parties avoided a backlash from customers, who might 

otherwise have been dissatisfied with a product change. The two parties also agreed to promote 

the products under the utility’s “Blue Sky” brand, which is used for PacifiCorp’s green power 

block product, thereby eliminating concerns about introducing a new brand. Finally, PacifiCorp 

modified the contract by tying required marketing expenditures to MWh sales to encourage 

continued marketing of the program throughout the contract period. The initial contract simply 

specified a set dollar amount to be spent on marketing over the contract period. 

Instead of issuing a second competitive solicitation, PGE incorporated a number of changes in its 

contract with Green Mountain Energy. The two parties agreed to market the products under the 

utility’s brand, with new product names of “Green Source” and “Healthy Habitat.” In addition, 

they improved the products by increasing the new wind energy content to 50%, while 

maintaining the same product price. Finally, PGE modified the contract to encourage marketing 

through the end of the contract period, by including performance incentives and by specifying a 

marketing expenditure amount in the last year of the contract. The two parties also agreed to a 

series of annual reviews followed by rolling contract extensions, and are currently negotiating a 

contract extension through the end of 2008. Table 9 shows the changes in the Phase 2 products. 

The respective program roles of the utilities and marketers have evolved somewhat over time; 

but, generally, the utilities handle the program administration—including processing enrollments, 

tracking customers, managing customer contact, and conducting market research—while the 

marketers lead the marketing activities. The utility collaborates with its marketer partner on the 

marketing campaigns for all three green power options, including the utility’s independent 

offering. The utilities work with the marketers to establish joint business objectives and develop 

marketing materials, and approve all marketing materials and messaging to ensure that they 

conform to company standards. And the marketers lead promotional interactions with the public, 

such as presentations, events, and community-based marketing efforts. 

The POC stakeholder group plays a continuing role in guiding and coordinating marketing 

efforts by the utilities, marketers, and external stakeholders (such as environmental 

organizations) who help promote the program to local businesses and communities. The POC 

meetings provide an arena for the parties to plan and coordinate marketing activities and discuss 

strategies for expanding the program. The POC also makes recommendations for modifying the 

program requirements as issues arise. 

 

23 Public Utility Commission of Oregon, Order 03-208, April 9, 2003, Portfolio Advisory Committee, 

Recommendations for Renewable Portfolio Options, 

http://www.puc.state.or.us/PUC/electric_restruc/advcomm/03mtngs/03_208.pdf. 

28
Table 9. Products Offered in Phase 2 of Oregon Portfolio Program (2004–2006) 

 

Utility Product Price Product Content 

Blue Sky Block 1.95¢/kWh 100% New Wind 

Blue Sky Usage* 0.78¢/kWh 

 61% New Wind 

 38% Biomass 

 1% Solar PacifiCorp 

Blue Sky Habitat* 

0.78¢/kWh + $2.50 per 

month for salmon 

restoration 

 61% New Wind 

 38% Biomass 

 1% Solar 

Clean Wind 1.75¢/kWh 100% New Wind 

Green Source* 0.80¢/kWh 

 50% New Wind 

 25% Geothermal 

 25% Small Hydro 

Portland General 

Electric 

Healthy Habitat* 

0.80¢/kWh + $2.50 per 

month for salmon 

restoration 

 50% New Wind 

 25% Geothermal 

 25% Small Hydro 

* PacifiCorp product marketed in partnership with 3 Phases Energy Services. 

** PGE product marketed in partnership with Green Mountain Energy Company. 

Results and Lessons Learned

The Oregon model is unique in using a single-marketer approach to provide multiple product 

options to customers, as a substitute for full retail access to competitive suppliers. Based on 

several years of program experience, the utilities, regulators, and marketers have all been pleased 

with this approach, and there is general consensus that the competitive solicitation adequately 

addresses competitive market issues. According to the utilities, the use of a single marketer is 

advantageous, because it is much easier to manage the partnership and customer impacts when 

there are not multiple parties involved. In addition, by working with a single marketer, the utility 

is able to develop a true partnership and working relationship through which the program can be 

promoted collaboratively. 

The Oregon programs have been successful as measured by a number of factors. Both programs 

have consistently ranked among the top 10 nationally in terms of customer participants and 

renewable energy sales (Table 10). While both programs ranked high prior to the partnership 

program, they experienced a surge in enrollments in 2002 (roughly a threefold increase), when 

the third-party marketer model was introduced—and the programs have continued to grow 

substantially over time. 

Further, both utilities indicate that the programs have met or exceeded goals and metrics. 

PacifiCorp thinks that while partnering has had a positive impact on the program’s success, the 

program would have been successful without the introduction of a third-party marketer. 

According to the utilities, the primary advantages of partnering include gaining additional 

resources to promote the program, as well as access to new ideas that enable the utility to “think 

29
Table 10. Sales and Customers in PacifiCorp and PGE Programs (2000–2005) 

2000# 2001 2002 2003 2004 2005 

PacifiCorp*

 Participants 2,700 7,300 20,028 23,351 36,125 42,269 

 Green Power Sales+ n/a n/a 55,615 132,169 191,838 234,164 

Portland General Electric 

 Participants 3,900 5,700 19,623 26,893 33,491 40,570 

 Green Power Sales+ n/a n/a 57,989 188,646 262,143 339,577 

* Figures include PacifiCorp’s Blue Sky wind energy option, which is available to customers outside of Oregon. #

 Data for November 2000. 

+

 Megawatt-hours 

outside the box.” In addition, partners can add flexibility, because they are not bound by the 

corporate constraints of the utility—and they can access special staff marketing expertise. 

The Oregon program also offers some unique lessons in undertaking a second competitive 

marketer solicitation and addressing the challenges associated with transitioning (or the potential 

to transition) to a new supplier. The primary lessons from this experience pertain to co-branding, 

maintaining consistency in product content and price, the contract length, and creating incentives 

for marketers to invest in the final year of the contract. 

One of the key program benefits for the utility is the relationship between increased customer 

satisfaction and program participation. Both utilities found that the public relations benefits 

associated with the renewable energy program were diluted with more than one brand in use; by 

introducing a second brand into the mix, the utilities were losing some of the direct value of the 

program. Also, there was some evidence that the second brand caused confusion among 

consumers. And research suggested that customers preferred to purchase renewable energy from 

a known and trusted entity, such as the utility. Finally, introducing a new brand with every 

competitive solicitation had the potential to exacerbate consumer confusion and increase 

program costs, especially if marketing materials had to be discarded when the brand changed. 

The contract length was initially set at two years by state regulators, which posed a number of 

challenges for both the utilities and marketers. First, it takes time for a marketer to understand 

the utility’s policies, practices, and culture—as well as the marketing territory—and for the two 

parties to develop a good working relationship. Second, the two-year contract was not adequate 

for the marketers to recoup their investments and did not encourage marketers to make the 

necessary investments in program marketing. Therefore, the utilities, marketers, and other 

stakeholders supported extending the contracts to three years to enable the program to be more 

effectively marketed. 

30
Another challenge was maintaining marketing expenditures near the end of the contract period. 

Without incentives, the marketers had little reason to continue marketing the program because of 

the risk of losing the contract in a competitive rebid. To prevent gaps in program marketing, the 

utilities modified their contracts to provide incentives or specific requirements to continue the 

marketing effort in the final year of the contract. 

 

31
Comparing the Performance of Partnership Programs 

To gauge the relative success of partnership programs, we can compare customer participation 

and sales data for these programs with data for utility green power programs nationwide. It is 

important to note that the sample of utility-marketer partnerships is relatively small (14 of 86 

utility programs for which data exists, or 16%) and that partnership programs did not emerge 

until 2002. In fact, of the 14 utility-marketer programs, four were launched in 2004 and two were 

launched in early 2005. 

With the data limitations in mind, partnership programs are outperforming other utility green 

power programs nationally in terms of average customer participation and renewable energy 

sales rates. Based on preliminary data for year-end 2005, average customer participation rates for 

utility-marketer programs were twice those of other utility green power programs (2.6% versus 

1.2%, respectively). Further, the average green power sales rate (green power sales as percentage 

of each utility’s total electric sales) was 0.73% for partnership programs, compared to 0.38% for 

other utilities (Table 11).24 Table 12 summarizes participation and sales data for the utilitymarketer partnership programs that were included in the case studies. 

Table 11. Comparison of Partnership and Non-Partnership Programs 

(Customer Participation and Green Power Sales Rates, 2005) 

Number of 

Programs 

Average 

Participation Rate** 

Average Green Power 

Sales Rate*** 

Partnership Programs 14 2.56% 0.727% 

All Programs Minus 

Partnerships* 72 1.24% 0.377% 

All Green Power Programs* 86 1.45% 0.447% 

* Preliminary data for 2005. Not all data has been verified. 

** Average participation rate is the percentage of total eligible utility customers participating in the green 

power program, averaged across programs. 

*** Average sales rate is the percentage of total eligible utility electricity sales represented by green power 

program sales, averaged across programs. 

In addition, utility-marketer partnerships represented a relatively large fraction of total green 

power participants (31%) and green power sales (35%) in 2005, which indicates that these 

programs are having an important impact on green power market development (Table 13). 

However, most partnership programs involve very large utilities. In fact, partnership programs 

accounted for 31% of customers eligible to participate in green power programs and 22% of 

eligible retail electric sales in 2005. Thus, the fraction of participants in partnership programs is 

proportional to the relative fraction of eligible customers from these programs, whereas 

renewable energy sales are proportionally higher than eligible retail electric sales. 

 

24 The average participation rate for utility-marketer partnership programs is 1.7% if the City of Palo Alto, which 

reported a participation rate of 13.6% in 2005, is excluded. 

32
Table 12. Performance of Case Study Utility-Marketer Partnership Programs, 2005 

Utility/Partner Launch 

Year 

Customer 

Participants 

Participation

Rate 

Green Power 

Sales 

(millions of kWh) 

Green Power 

% of Total 

Power Sales 

City of Palo Alto Utilities/ 

3 Phases Energy 2003 3,738 13.6% 30.6 3.19% 

NYSEG and RG&E/ 

Community Energy 2002 5,301 0.4% 44.6 0.28% 

Florida Power and Light/ 

Green Mountain Energy 2004 23,066 0.6% 224.6 0.42% 

PECO/ 

Community Energy 2004 22,164 1.5% 45.4 0.13% 

National Grid/ 

Multiple Marketers* 

2002- 

2003 17,414 0.5% 112.0 0.21% 

CL&P and UI/ 

Community Energy, Sterling 

Planet 

2005 6,013 0.4% 20.0** 0.07% 

PacifiCorp/ 

3 Phases Energy*** 2002 15,545 2.9% 136.3 2.07% 

Portland General Electric/ 

Green Mountain Energy**** 2002 32,051 4.2% 261.9 1.42% 

* Includes: Community Energy, EnviroGen, Green Mountain Energy, Mass Energy, People’s Power and Light, and 

Sterling Planet. 

** Estimate based on average customer use. 

*** Data only for Pacific Power products marketed in conjunction with 3 Phases in Oregon (Blue Sky Usage and Blue 

Sky Habitat). 

**** Data only for PGE products marketed in conjunction with Green Mountain Energy (Green Source and Healthy 

Habitat). 

Partnership programs are also exhibiting more rapid growth than other programs overall. During 

2005, the number of customer participants in utility-marketer partnership programs increased by 

63%, while renewable energy sales grew by 53% (Table 13). In comparison, preliminary data 

show that the number of participants in all utility green power programs nationally increased by 

about 20% during 2005, while renewable energy sales grew by 36%. The more-rapid growth 

among partnership programs may be due, in part, to being more recently introduced than 

established programs; but may also be a result of the performance-based incentive structure of 

most partnership programs. 

Finally, utility-marketer partnership programs rank high nationally in a number of important 

categories. In 2004, three partnership programs ranked among the top 10 green power programs 

nationally, with respect to renewable energy sales and customer participants, and two programs 

in terms of customers participation rate. In 2005, four partnership programs ranked among the 

top 10 in sales, five for customer participants, and three for participation rate (Table 14). The 

increasing presence of these programs in the “Top 10” national rankings further suggests that 

partnering can be an effective means for implementing a successful green power program. 

33
Table 13. Comparison of Partnership and Non-Partnership Programs 

(Total Participants and Green Power Sales, 2004–2005) 

 2004 2005* Increase 

Partnership Green Power Programs 

Participants 83,000 135,000 63% 

Green Power Sales 618,000 944,000 53% 

All Utility Green Power Programs 

Participants 362,000 435,000 20% 

Green Power Sales 1,975,000 2,694,000 36% 

Partner Programs as % of All Utility Green Power Programs 

Participants 23% 31% ---- 

Sales 31% 35% ---- 

*Preliminary data for 2005. Not all data has been verified. 

Table 14. Utility-Marketer Partnership National Rankings, 2005 

Criteria Rank Utility/Partner(s) 

Green Power 

Sales 

2 

3 

4 

7 

Portland General Electric/ Green Mountain Energy 

Pacificorp/3 Phases Energy 

Florida Power & Light/Green Mountain Energy 

National Grid/Various* 

Customer 

Participants 

2 

3 

6 

7 

8 

Pacificorp/3 Phases Energy 

Portland General Electric/Green Mountain Energy 

Florida Power & Light/Green Mountain Energy 

PECO/Community Energy 

National Grid/Various* 

Customer 

Participation 

Rate 

1 

6 

8 

City of Palo Alto Utilities/3 Phases Energy 

Portland General Electric/Green Mountain Energy 

Silicon Valley Power/3 Phases Energy 

* Program offered in conjunction with Community Energy, EnviroGen, Green Mountain Energy, 

Mass Energy, People's Power & Light, and Sterling Planet. 

http://www.eere.energy.gov/greenpower/markets/pricing.shtml?page=3

34
Key Factors for Successful Partnerships 

While utility-marketer partnerships have proven successful in many cases, they do not ensure the 

success of a green power program. Any program can fail if not properly designed and 

implemented, or if management commitment is lacking. However, third-party marketers bring 

specific renewable energy procurement and marketing expertise that may be lacking in the 

utility. Further, partnerships can leverage the unique strengths of both the utility and marketer, 

and create greater incentives for program success. 

The success of partnership programs also depends on how the partnership itself is structured, 

including the respective partner roles, the contract terms, and other implementation details. 

Based on interviews with utilities, marketers, and regulators, as well as the case studies 

presented, we have identified a number of factors that are critical to success. While some factors 

depend on whether the partnership is voluntary or mandatory, others are broadly applicable. We 

present the general factors first, followed by specific factors relevant to voluntary and mandatory 

(primarily default-supplier programs) partnerships. 

General Success Factors 

• Active Participation by Both Parties—It is important to have both parties fully engaged in the 

program. Utilities must actively promote the program in conjunction with the marketer(s). 

Utilities can leverage ongoing activities (e.g., existing marketing activities), and facilitate 

marketer access to various utility departments. In addition, the partnership must be designed 

to create sufficient incentives for the marketer to be fully vested. Marketers are more likely to 

invest resources in the program, if the utility also invests resources and provides program 

support. 

• Contract Terms/Delineation of Risk—The division of risk between the utility and marketer 

does not appear to be important, as long as the parties are adequately compensated for their 

respective risks. Program risks include start-up costs such as the initial investment in 

marketing and program launch, modifying the billing system, establishing systems to handle 

customer inquiries, creating a program Web site, and procuring renewable energy supplies. 

Typically, program revenues are generated on a per-MWh sales basis and divided according 

to the respective program investments. Utilities reap significant public relations benefits from 

offering a green power program, which should be considered when determining the contract 

terms and division of labor and revenues. 

Partnerships have been successful, both in cases where the risks and start-up costs are shared 

fairly evenly between the utility and the marketer, and where the marketer assumes the 

majority of the risk. The willingness of the marketer to assume greater risk depends largely 

on the length of the contract. In Oregon, the parties found that the initial two-year contract 

cycle was too short to allow marketers time to form a working relationship with the utility, 

understand the program and marketing service territory, and recoup marketing investments. 

Most marketers prefer contract periods of at least three to five years to provide adequate time 

to recoup start-up costs and generate a profit. Contracts longer than five years provide greater 

35
flexibility and enable the marketer to invest more marketing dollars and undertake a wider 

array of marketing techniques, including some that are more expensive. However, from the 

utility’s perspective, long-term contracts may have some disadvantages by locking in a 

partner and losing the ability to re-compete the contract or address performance issues. If a 

long-term contract is used, the utility should incorporate conditions to ensure that the 

marketer continues to invest in the program, such as setting minimum marketing standards 

and annual performance targets. 

• Transitioning Suppliers/Re-competing Contracts—Transitional issues arise when a utility 

switches marketers. If the switch causes significant changes in product design or price, 

customers can become confused. Thus, it is important to establish product quality and price 

standards to ensure consistency or continued improvement, in the event that new marketers 

are retained. Co-branding can also be problematic if marketers change over time. Finally, it is 

important to structure contracts to ensure that marketing continues in the final year, if the 

current marketer is not retained. 

• Performance Targets—It is helpful to establish annual or periodic performance targets—such 

as number of customers enrolled and MWh sales—to evaluate program performance and to 

ensure that the parties have similar expectations. Although it may be difficult to determine 

appropriate metrics for the early years, these can be adjusted periodically to reflect market 

conditions and past performance. In later years, performance metrics are particularly 

important to ensure that marketing efforts are sustained. 

• Green Power Billing—One important value that the utility brings to the partnership is 

existing mechanisms to bill and communicate with customers. It is most efficient and costeffective to use these systems for program implementation. The green power charge should 

appear on the customer’s regular utility bill. If customers receive a separate bill, the program 

appears disconnected from the utility, and the benefits of the credibility that the utility has 

with its customers may be lost. Customers may also question the legitimacy of the program. 

Finally, customers view it as a hassle to receive more than one bill, which can discourage 

participation. 

Voluntary Programs 

• Utility Champion/Integrating Program Within the Utility—Voluntary utility-marketer 

programs are more likely to succeed if there is an internal champion at the utility. A 

dedicated and enthusiastic program manager is important for facilitating access to internal 

resources and convincing internal staff to support the program. Marketers need support from, 

and access to, a variety of utility resources and departments, such as the call center, mail 

house, the billing department, and corporate communications. Marketers will invest time and 

energy in programs where the utility is actively supportive, because this is where they will 

likely receive the greatest financial returns. 

• Leveraging Other Utility Marketing Activities—Another key role of the utility is determining 

how to leverage its ongoing marketing efforts to promote the green power program. 

Leveraging existing activities (events, sponsorships, marketing for related programs, etc.) can 

36
be very cost-effective and free up the marketer’s resources for supplemental activities, 

essentially increasing the overall program marketing budget. 

• Number of Marketers—For voluntary programs, the single-marketer approach is preferred, 

because it enables the parties to work together closely and form a true partnership. It also 

provides greater incentive for the marketer to be engaged in the program, and avoids the 

complexities of involving multiple marketers. If the utility’s primary partnering motive is to 

improve program success, there is no benefit in adding multiple marketers. 

• Co-branding—Unless clear advantages to co-branding are identified, promoting the program 

through the utility’s brand is the preferred approach because it is simpler to implement and 

avoids confusing customers. The use of multiple brands and logos can create difficulties in 

preparing marketing materials with limited space. One utility found that consumer response 

to its program increased substantially after switching from co-branding to the single utility 

brand. Co-branding can also be problematic for programs in which a new marketer may be 

selected periodically. 

• Flexibility—Both the utility and the marketer need to be flexible to achieve an effective 

working relationship. Marketers often bring new ideas and approaches that are not 

traditionally used by utilities, but are effective for reaching green power customers. If the 

utility is unwilling to try new approaches, then some advantages of the partnership may be 

lost. 

• Data for Targeting and Analysis—Targeting can be effective in reducing customeracquisition costs and improving the efficiency of marketing efforts. Marketers may bring 

expertise in targeting that can be utilized if they have access to the necessary data. Utilities 

must be willing to share this data. 

• Enrollment/Billing—Generally, the best practice is to have the utility handle customer 

enrollments and billing. This is the most cost-effective approach, because the utility already 

has procedures to handle customer service and billing. In cases where the utility has been 

unable to modify its billing system to add the green power charge, this has been a barrier to 

enrollment. 

Mandatory Programs 

• Utility Role in Marketing and Implementation—For default-supplier programs that are 

designed to replace or stimulate retail competition (e.g., in Connecticut and New Jersey), the 

utilities are typically not vested in the success of the program, and simply view themselves as 

the vessel to allow marketers access to retail customers. Therefore, the challenge is to create 

a program environment in which marketers can succeed. It is important to specify the 

marketing role of the utility up-front. Most marketers report that it is also important for the 

utility to issue at least two bill inserts annually—and more are better. Many voluntary 

partnership programs use bill inserts much more frequently, as many as eight or more per 

year. Moreover, marketers are more engaged in programs where the utility pays for the bill 

37
inserts (sometimes through public benefits funds), which can be justified because the utility 

shares in the public relations benefits of the program. 

• Number of Marketers—For programs offered in competitive electricity markets, determining 

the appropriate number of marketers to include involves weighing issues of creating 

competition and providing choices against ease of implementation and effectiveness in 

achieving customer enrollments. The Oregon model, which involves a single marketer 

selected through a competitive solicitation, effectively balances these concerns. This 

approach creates a true partnership among the utility and marketer, while eliminating the 

need for the utility to be a neutral party in offering green power choices. The utility can be 

more active in promoting the program, and the marketer has greater incentive to invest in 

marketing. And the single-marketer approach avoids the complexity and marketing 

challenges of programs involving multiple marketers and product choices. 

On the other hand, in some states, the single-marketer approach may be politically 

unpalatable and viewed as out-of-step with retail access. In this case, a two-marketer model 

may be the preferred approach, as in Connecticut. This model helps to mitigate concerns 

about program complexity, customer confusion, marketing difficulties, and lack of 

investment by marketers. 

• Product Design Criteria—Particularly for programs with multiple marketers, it is important 

to establish product-design criteria or require certification to set a floor for product quality, 

and create a level playing field among the marketers. Minimum standards should be 

established for resource mix, plant vintage (i.e., new versus existing), geographic location of 

sources, and verification, to assure that products provide the expected environmental 

benefits. Product standards also help avoid a “race to the bottom,” where marketers compete 

only on price. Further, product standards can protect against “bait-and-switch” tactics, where 

a marketer may advertise an attractive product but offer it only very briefly. The standard 

setting process should consider difficulties that marketers may face if required to lock into a 

particular product for an extended period of time, as market conditions may change. 

• Customer Communications—To maximize program participation, it is important to structure 

information channels to maximize marketer access to customers—the marketers are the most 

knowledgeable about their products, are best able to communicate the benefits, and are most 

focused on enrolling customers. Because the utility must be neutral in providing information, 

it is best to limit reliance on “in-house” utility communication channels and instead 

encourage direct communication between marketers and customers. This also minimizes the 

number of steps customers must endure to enroll in the program. 

• Data Access/Customer Account Numbers—One issue raised consistently by marketers in 

default-supplier programs is the lack of access to customer account numbers, which are 

required to process enrollments. Typically, states limit marketer access to customer account 

numbers to prevent “slamming,” or the practice of enrolling customers without their 

permission. However, this has proven to be a significant barrier to enrolling customers in 

green power programs, with some marketers reporting losing on the order of 20% to 50% of 

customers who register at events. When marketers must follow-up with these customers to 

38
obtain their account numbers, it creates customer confusion and additional expense for the 

marketer. One solution that balances consumer protection and marketer concerns is to require 

a “wet signature” for customers who enroll at events, which the marketers can then use to 

obtain the account number from the utility. This approach has been effective in Connecticut. 

• Coordination and Ongoing Communication—Particularly for programs that involve multiple 

utilities and marketers, ongoing communication among the program participants is helpful. 

The Connecticut Clean Energy Fund facilitates monthly meetings among the utilities, 

marketers, PUC staff, and other stakeholders. All parties have found the interactions to be 

useful in resolving program issues and helping to coordinate messaging. 

• Statewide Access—Statewide implementation of mandatory programs is preferred, as 

opposed to individual utility mandates. Because individual utility service territories often cut 

across media markets, marketers have found it easier to communicate the availability of 

green power options across the entire state. Statewide access also enables marketers to 

promote the program in conjunction with special interest groups, such as environmental 

organizations, who may have members in different utility service territories. And, finally, 

statewide implementation allows for supplemental marketing support, such as in Connecticut, 

where a statewide program to engage local communities has been particularly effective. 

39
Summary and Conclusions 

Strategic partnerships between utilities and marketers can be an effective approach to marketing 

green power. Partnerships offer the advantage of leveraging the marketer’s experience with 

selling green power and procuring renewable energy supplies, and the utility’s reputation and 

access to customers. Further, partnerships can create greater incentives for success because 

marketers have a vested financial interest in maximizing customer participation and green power 

sales. 

Interviews with utilities, marketers, and regulators involved in partnership programs found 

general consensus that these partnerships can significantly improve the performance of green 

power programs. Available data, though limited, show that partnership programs have been more 

successful, on average, than “in-house” utility programs, as measured by customer participation 

rate and the percentage of total utility electric sales represented by green power. 

Utilities generally benefit from teaming with independent renewable energy marketers if they 

have limited experience in procuring renewable energy supplies, marketing renewable energy or 

other value-added products, or want to reduce the risks of offering renewable energy options to 

their customers. In states with competitive retail electricity markets, partnership programs 

involving default suppliers and marketers can provide easily accessible green product choices for 

residential and small commercial customers, where they might not exist otherwise. 

However, partnerships can fail if the program or partnering arrangement is poorly designed and 

implemented. To be most effective, it is important that both parties be adequately compensated 

and actively engaged in the program operation. Because marketers are typically paid for 

performance, they are most likely to invest their time and energy in programs where the utility is 

supportive and actively works to make the program a success. Utility-marketer partnerships, in 

which both parties are vested in the success of the program, have been effective both at large and 

small utilities, and in regulated and competitive electricity markets. 

40
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4. TITLE AND SUBTITLE

Utility-Marketer Partnerships: An Effective Strategy for Marketing 

Green Power? 

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NREL/TP-620-39730 

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ASG5.1005 

6. AUTHOR(S)

L.A. Bird and E.S. Brown 

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National Renewable Energy Laboratory 

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14. ABSTRACT (Maximum 200 Words)

This paper explores whether partnerships between utilities and independent marketers are an effective strategy for 

marketing green power. We present case studies of voluntary and mandatory partnerships covering green power 

program design and implementation in both regulated and restructured electricity markets. We also include 

perspectives (based on interviews) from utilities, marketers, and regulators involved in developing and implementing 

these partnerships. From these case studies and interviews, we describe lessons learned about developing effective 

partnerships, including such issues as respective roles in marketing and administration, product branding, and 

contract and incentive structures. Based on experience to date, strategic partnerships between utilities and marketers 

can be an effective approach to marketing green power. Partnerships leverage the sales and resource procurement 

experience of marketers and the utility’s reputation and access to customers. Further, partnerships can create 

greater incentives for success because marketers have a vested financial interest in maximizing customer 

participation and green power sales. 

15. SUBJECT TERMS

green power; marketing green power; product branding; utilities; public utility commission; green power incentives; 

green power sales; Lori Bird; Elizabeth Brown. 

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