Utility Green Pricing Programs: 

Design, Implementation, and 

Consumer Response 

February 2004 • NREL/TP-620-35618 

Lori Bird, Blair Swezey, and Jørn Aabakken 

National Renewable Energy Laboratory 

1617 Cole Boulevard 

Golden, Colorado 80401-3393 

NREL is a U.S. Department of Energy Laboratory 

Operated by Midwest Research Institute • Battelle 

Contract No. DE-AC36-99-GO10337 
National Renewable Energy Laboratory 

1617 Cole Boulevard 

Golden, Colorado 80401-3393 

NREL is a U.S. Department of Energy Laboratory 

Operated by Midwest Research Institute • Battelle 

Contract No. DE-AC36-99-GO10337 

February 2004 • NREL/TP-620-35618 

Utility Green Pricing Programs: 

Design, Implementation, and 

Consumer Response 

Lori Bird, Blair Swezey, and Jørn Aabakken 

Prepared under Task No. AS73.8004 
NOTICE

This report was prepared as an account of work sponsored by an agency of the United States 

government. Neither the United States government nor any agency thereof, nor any of their employees, 

makes any warranty, express or implied, or assumes any legal liability or responsibility for the accuracy, 

completeness, or usefulness of any information, apparatus, product, or process disclosed, or represents 

that its use would not infringe privately owned rights. Reference herein to any specific commercial 

product, process, or service by trade name, trademark, manufacturer, or otherwise does not necessarily 

constitute or imply its endorsement, recommendation, or favoring by the United States government or any 

agency thereof. The views and opinions of authors expressed herein do not necessarily state or reflect 

those of the United States government or any agency thereof. 

Available electronically at http://www.osti.gov/bridge

Available for a processing fee to U.S. Department of Energy 

and its contractors, in paper, from: 

U.S. Department of Energy 

Office of Scientific and Technical Information 

P.O. Box 62 

Oak Ridge, TN 37831-0062 

phone: 865.576.8401 

fax: 865.576.5728 

email: reports@adonis.osti.gov 

Available for sale to the public, in paper, from: 

U.S. Department of Commerce 

National Technical Information Service 

5285 Port Royal Road 

Springfield, VA 22161 

phone: 800.553.6847 

fax: 703.605.6900 

email: orders@ntis.fedworld.gov 

online ordering: http://www.ntis.gov/ordering.htm

Printed on paper containing at least 50% wastepaper, including 20% postconsumer waste 
iii

Acknowledgments 

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

Efficiency and Renewable Energy (EERE). The authors thank Ryan Wiser of Lawrence Berkeley 

National Laboratory, Laura Vimmerstedt of the National Renewable Energy Laboratory (NREL), 

Ed Holt of Ed Holt and Associates, Adam Capage of Platts, and Dan Lieberman of the Center for 

Resource Solutions for their thoughtful review of the document; and Michelle Kubik of NREL 

for her editorial support. The authors also acknowledge the support of the EERE technology 

programs and of David McAndrew, EERE program manager. Finally, the authors thank the 

many utility green pricing program managers who have consistently provided the data presented 

in this report. 
iv

Table of Contents 

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

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

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

Customer Participation.....................................................................................................................4 

 Number of Customers.............................................................................................................4 

 Participation Rates ..................................................................................................................5 

 Retention of Customers...........................................................................................................7 

Renewable Energy Sales and Supplies ............................................................................................7 

 Green Power Sales and Revenues...........................................................................................7 

 Ownership vs. Purchases of Supplies .....................................................................................7 

 New Renewable Capacity Installations ..................................................................................8 

Product Type....................................................................................................................................9 

 Energy Blocks vs. Percentage of Use ...................................................................................10 

Pricing............................................................................................................................................10 

 Price Premiums .....................................................................................................................10 

 Protection from Fuel Costs and Environmental Charges......................................................12 

Marketing.......................................................................................................................................12 

 Marketing Costs....................................................................................................................12 

 Cost Effectiveness of Marketing Techniques .......................................................................14 

Program Implementation ...............................................................................................................15 

 Enrollment Options...............................................................................................................15 

 Enrollment Term...................................................................................................................15 

 Program Evaluations and Market Research..........................................................................16 

 Customer Value ....................................................................................................................16 

Conclusions and Observations.......................................................................................................17 

References......................................................................................................................................18 

Appendix A....................................................................................................................................19 

Appendix B ....................................................................................................................................22 

Appendix C ....................................................................................................................................23
v

List of Tables 

Table 1: Estimated Cumulative Number of Customers Participating in Utility Green Pricing 

Programs ...........................................................................................................................5 

Table 2: Customer Participation Rates in Utility Green Pricing Programs, 1999-2002 .................5 

Table 3: Average Participation Rate by Age of Green Pricing Programs, 2002.............................6 

Table 4: Green Pricing Participation Rates by Utility Type, 2002 .................................................6 

Table 5: Annual Sales of Green Energy through Utility Green Pricing Programs .........................7 

Table 6: Utility Procurement of Renewable Energy Supplies, 2002 ..............................................8 

Table 7: New Renewables Capacity Supplying Green Pricing Programs, 2002 ............................9 

Table 8: Price Premiums of Utility Green Power Products ..........................................................11 

Table 9: Green Pricing Premiums by Utility Type, 2002 .............................................................12 

Table 10: Customer Acquisition Costs and Marketing Budgets, 2002.........................................13 

Table 11: Ranking the Cost-Effectiveness of Marketing Strategies.............................................14 

Table 12: Methods of Enrolling in Green Pricing Programs ........................................................15 

Table 13: Enrollment Term by Customer Segment ......................................................................16 

Table 14: Methods of Providing Additional Program Benefits....................................................17 

Table B-1: Utilities Offering Green Pricing Programs in 2002....................................................22 

Table C-1: Green Pricing Program Renewable Energy Sales (as of December 2002).................23 

Table C-2: Total Number of Customer Participants (as of December 2002) ...............................24 

Table C-3: Customer Participation Rate (as of December 2002) .................................................25 

Table C-4: Price Premium Charged for New, Customer-Driven Renewable Power....................26 

List of Figures 

Figure 1: Annual and Cumulative Renewable Energy Capacity Installations to Serve Green 

Pricing Programs............................................................................................................9 

Figure 2: Types of Green Pricing Programs................................................................................10 

Figure 3: Utility Green Pricing Program Premiums....................................................................11 

Figure 4: Utility-Reported Customer Acquisition Costs, 2002...................................................13 
1

Executive Summary 

The term green pricing refers to programs offered by utilities in traditionally regulated 

electricity markets, which allow customers to support the development of renewable 

energy sources by paying a small premium on their electric bills. Since the introduction 

of the concept in the United States, the number of unique utility green pricing programs 

has expanded from just a few programs in 1993 to more than 90 in 2002. About 10% of 

U.S. utilities offered a green pricing option to about 26 million consumers by the end of 

2002. 

The purpose of this report is to provide: 1) aggregate industry data on consumer response 

to utility programs, which indicate the collective impact of green pricing on renewable 

energy development nationally; and 2) market data that can be used by utilities as a 

benchmark for gauging the relative success of their green pricing programs. Specifically, 

the paper presents current data and trends in consumer response to green pricing, as 

measured by renewable energy sales, participants, participation rates, and new renewable 

energy capacity supported. In addition, it presents data on various aspects of program 

design and implementation, such as product pricing, ownership of supplies, retention 

rates, marketing costs, the effectiveness of marketing techniques, and methods of 

enrolling and providing value to customers. 

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

Consumer Response 

• Between 1999 and 2002, there was a fourfold increase in the number of customers 

participating in utility green pricing programs, with about 270,000 customers 

participating by the end of 2002. Although the number of programs grew at a similar 

rate, 10 programs of the more than 90 offered are responsible for three-quarters of all 

customers. 

• Sales of renewable energy through utility green pricing programs have grown on 

average about 40% annually during the past several years, driven primarily by the 

success of a relatively small number of programs – just three programs account for 

about half of all sales. 

• While green power participants and sales have grown steadily over time, the average 

customer participation rate has remained largely steady at 1.2% to 1.3%. The number 

of new programs introduced each year affects the average participation rate to some 

degree. Considering only those programs offered for three or more years, the average 

participation rate is just above 2%. The most successful green pricing programs have 

achieved participation rates of between 3% and 6%. 

Renewable Energy Supplies

• The majority of utilities purchase a significant portion of the renewable energy used 

to supply their green power programs from third parties – only about one-quarter of 

utilities report directly owning all of the renewable generation sources. Utilities have 

shown increased interest in purchasing renewable energy certificates (RECs) to 
2

supply green pricing programs. At the end of 2002, utility REC purchases represented 

about 11% of all power sold through green pricing programs. 

• More than 400 megawatts (MW) of new renewables capacity has been installed or 

planned as a result of utility green pricing programs. Installed capacity grew by 25% 

between 2001 and 2002. Wind, solar, and landfill gas are the renewable resources 

most commonly used for utility programs, with wind representing the largest portion 

of the total capacity. 

Pricing and Revenues 

• While the median price of renewable energy offered through green pricing programs 

has remained at 2.5 cents per kilowatt-hour (¢/kWh), the average price has declined 

by about 10% annually since 2000. This reduction is driven in part by lower than 

expected costs for renewable energy supplies, financial incentives for new renewable 

energy development, and narrowing cost spreads between renewables and natural 

gas-fired generation. 

• The majority of programs are structured to offer consumers the option of purchasing 

blocks of renewable energy, with 100 kWh the most common block size. 

• On average, customers spent about $5 a month to purchase or support green power 

through utility programs during 2002. 

• Utilities collected a total of about $15 million in revenues from green power sales in 

2002. 

 

Marketing 

• The median cost of acquiring new customers for green pricing programs was $35, 

with an average of $43. In addition, utilities spent (on average) about 20% of the total 

green power program budget on marketing, with a median of 15%. 

• Of the various marketing strategies utilized, bill inserts and earned media are rated 

highly cost-effective, followed by utility newsletters that featured articles about the 

green power program, direct-mail campaigns, and events. Although telemarketing is 

perceived by some utilities to be the most cost-effective strategy, it is not commonly 

used. 

Program Implementation 

• Green pricing programs exhibit high customer-retention rates, generally 95% 

annually or better. 

• The most common methods of adding value for green pricing participants are 

program updates in periodic newsletters and window decals. In addition, many 

programs recognize business customer participation through program advertisements 

or in local media, or provide customers with plaques or other recognition. 

• The most commonly used methods to enroll customers in green pricing programs are 

through the utility’s call center, via mail-in cards, during special events, and to a 

lesser extent, via the utility’s Web site. Fewer than 10% of utilities allow customers to 

enroll by checking a box on their utility bill. 
3

Introduction 

The term green pricing refers to programs offered by utilities in traditionally regulated 

electricity markets, which allow customers to support the development of renewable 

energy sources by paying a small premium on their electric bills. 

Since the introduction of the concept in the United States, the number of unique utility 

green pricing programs has expanded from just a few programs in 1993 to more than 90 

in 2002. Because some of these programs are marketed by cooperative associations or 

public power entities that serve multiple distribution utilities, collectively more than 300 

investor-owned and consumer-owned utilities in 32 states offered green pricing by the 

end of 2002. Thus, about 10% of U.S. utilities offered a green pricing option to about 26 

million consumers. 

Initially, utilities offered green pricing to prepare for competition and to gain experience 

with renewable energy technologies. More recently, growth has been fueled in part by 

state laws requiring utilities to offer green power options and the improved economics of 

renewable energy technologies (Bird and Swezey 2003a). Despite the shift in motivation, 

utility green power options have increased steadily – since 1998, the number of green 

pricing programs has grown at an annual average rate exceeding 40%. 

The magnitude of support that green pricing provides for renewable energy development 

depends not only on access to these programs, but also on consumer interest and 

participation. Studies have found that green pricing programs have had varying success in 

garnering customers and in supporting renewable energy development (Lieberman 2002; 

Swezey and Bird 2001; Wiser et al. 2000). For example, in 2001, more than half of all 

programs experienced participation rates below 1% and just four programs were 

responsible for more than half of the renewable energy capacity installed to serve green 

pricing customers (Swezey and Bird 2001). 

The purpose of this paper is to provide: 1) aggregate industry data on consumer response 

to utility programs, which indicates the collective impact of green pricing on renewable 

energy development nationally; and 2) market data that can be used by utilities as a 

benchmark for gauging the relative success of their green pricing programs. Specifically, 

the paper presents current data and trends in consumer response to green pricing, as 

measured by renewable energy sales, participants, participation rates, and new renewable 

energy capacity supported. In addition, it presents data on various aspects of program 

design and implementation, such as product pricing, ownership of supplies, retention 

rates, marketing costs, the effectiveness of marketing techniques, and methods of 

enrolling and providing value to customers. 

A companion piece (Wiser et al. 2004) reports the results of a detailed statistical analysis 

of this data to provide insights into what specific program features might help maximize 

the effectiveness of utility green pricing programs. 
4

Data Collection and Methodology 

The information presented in this report is based on data collected by the National 

Renewable Energy Laboratory (NREL). Since 1999, NREL has collected information on 

green pricing program participants, participation rates, retention rates, price premiums, 

green energy sales, new renewables capacity installed to supply green pricing programs, 

and enrollment requirements (Bird and Swezey 2003a, Swezey and Bird 2000, Swezey 

and Bird 1999). Prior to 2002, information was collected by telephone. For 2002, a 

questionnaire was prepared, which included questions on marketing and program 

implementation that went beyond the data solicited in previous years. 

The 2002 questionnaire was distributed via e-mail to 82 green pricing program managers 

representing 90 green pricing programs (see Appendix A for the questionnaire and 

Appendix B for a list of utilities that offer green pricing programs). Utilities were asked 

to complete a separate questionnaire for each green pricing program offered. For 

programs administered through a generation and transmission cooperative or a public 

power supplier, the questionnaire was typically sent only to the power supplier, rather 

than to the participating distribution utilities. However, in some cases, the power supplier 

was not able to provide data on marketing and program implementation. Therefore, the 

authors did obtain data from a small number of municipal utilities and cooperatives that 

participate in jointly marketed programs for which contact information was available. 

Four programs were found to be inactive, thus reducing the total number of programs to 

86. Responses were received for a total of 66 programs, yielding an overall program 

response rate of 77%.1

 

Customer Participation 

Number of Customers 

At the end of 2002, an estimated 270,000 customers were participating in utility green 

pricing programs nationally, including about 3,900 nonresidential customers. The top 10 

programs accounted for about three-quarters of all participants (see Appendix C). 

Between 1999 and 2002, the number of customers participating in utility green pricing 

programs increased four-fold. During 2002, the total number of customers increased by 

27%. 

Table 1 delineates residential and nonresidential customer participation over time. 

During 2002, the number of nonresidential customers participating in green pricing 

programs increased by 54% – twice the rate of growth of participation among residential 

customers. This may be explained, in part, by an increased emphasis on marketing to the 

commercial and industrial sector in recent years, while many early green pricing 

programs primarily targeted residential customers. 

 

1

 Where possible, data gaps were filled with information obtained from other sources, including audits of 

utility green pricing programs, utility Web sites, and published reports (Harris 2002; Washington CTED 

and UTC 2002), as well as with data collected by NREL in previous years. 
5

Table 1: Estimated Cumulative Number of Customers Participating 

in Utility Green Pricing Programs 

Customer Segment 1999 2000 2001 2002 

Residential N/a* 163,520 209,820 266,637 

Nonresidential N/a* 1,680 2,520 3,890 

Total 66,930 165,200 212,340 270,527 

*Information on customer segments was not collected in 1999. 

Note: This data includes estimates for programs beyond those represented in the 

questionnaire responses. Supplemental data was obtained from a variety of sources, 

including audits of utility green pricing programs, utility Web sites, published reports 

(Harris 2002; Washington CTED and UTC 2002), and previous NREL data collection 

efforts.

 

Participation Rates 

At the end of 2002, the average rate of participation in green pricing programs among 

eligible utility customers was 1.3%, with a median of 0.9% (see Table 2). The most 

successful programs achieved participation rates of between 3% and 5.8% (see also 

Appendix C).2 Between 1999 and 2002, average participation rates for green pricing 

programs increased only slightly. This lack of improvement can be attributed partly to the 

introduction of new programs over time. For example, more than 20 new green pricing 

programs were introduced in 2002 alone.3

Table 2: Customer Participation Rates in Utility Green Pricing Programs, 1999-2002 

Participation Rate 1999 2000 2001 2002 

Average 0.9% 1.2% 1.3% 1.3% 

Median 0.8% 0.7% 0.7% 0.9% 

Top 10 programs 2.1%-4.7%* 2.6%-7.3% 3.0%-7.0% 3.0%-5.8% 

*Data for April 2000. 

Note: Data for 2002 are based on responses to the email questionnaire. Data for 1999-2001 are for 

programs that provided data via telephone surveys. 

For those programs that have been offered for one or more years, data show increasing 

rates of participation (see Table 3). At the end of 2002, the average participation rate for 

programs that were at least three years old was 2.2%, compared to 1.3% for all programs. 

Wiser et al. (2004) found a positive and statistically significant relationship between 

participation rates and program duration. They also found that program design, 

implementation, and marketing play a role in influencing participation rates. Thus, it can 

 

2

 The high end of the range declined from 2000 to 2002 because the utility with the highest participation 

rate (Moorhead Public Service) has experienced an increase in its overall customer base while the number 

of participants in its green pricing program has remained steady. The program was fully subscribed in 2000 

and the utility has not attempted to expand it. 

3

 Many of these programs were introduced in Washington to satisfy a state law requiring utilities to offer 

green power options. 
6

be postulated that participation rates grow over time as customers become increasingly 

aware of green product offerings and utilities become more adept at product marketing. 

Table 3: Average Participation Rate by Age of Green Pricing Programs, 2002 

All programs 1.3% 

Programs at least 1 year old 1.6% 

Programs at least 2 years old 1.6% 

Programs at least 3 years old 2.2% 

Programs at least 4 years old 2.1% 

Table 4 shows that across all utilities the average participation rate in 2002 for residential 

customers was 1.4% and 0.9% for nonresidential customers. The median participation 

rate for residential customers was 1.0% but only 0.1% for nonresidential customers. The 

lower participation rates among nonresidential customers may be explained, in part, by 

the fact that programs have historically placed less emphasis on the nonresidential sector. 

Table 4 also shows that differences exist in average participation rates among programs 

offered by investor-owned utilities (IOUs), municipal or public utilities, and 

cooperatives; however, these differences are narrowed when one compares the median 

rates. Of the three, cooperative utilities reported higher average participation rates, 

particularly for nonresidential customers.4

 Average participation rates were lowest among 

IOUs. However, caution is advised in drawing conclusions based on these data. For 

example, after performing a statistical analysis of the same data set, Wiser et al. (2004) 

found no evidence that the type of utility ownership influences participation rates but did 

find that smaller utilities tend to achieve higher participation rates. 

Table 4: Green Pricing Participation Rates by Utility Type, 2002 

Utility Type 

Number of 

Programs 

Residential 

Customers 

Average/Median 

Nonresidential 

Customers 

Average/Median 

All Customers 

Average/Median 

All Utilities 66 1.4%/1.0% 0.9%/0.1% 1.3%/0.9% 

Cooperatives 11 2.2%/1.1% 5.5%/0.5% 2.0%/0.9% 

Public 33 1.4%/1.1% 0.3%/0.1% 1.3%/1.0% 

Investor-owned 22 1.1%/0.8% 0.2%/0.1% 1.0%/0.8% 

 

4

 Because the number of responses from cooperative utilities was limited, these averages may not be 

representative of all cooperative programs. For example, one cooperative reported a 30% participation rate 

among nonresidential customers, which dramatically raised the average for all cooperative programs. This 

also partially explains the large difference between average and median participation rates for 

nonresidential customers among all utility programs noted previously. 
7

Retention of Customers 

In 2002, utilities reported that an average of 4.3% and a median of 2.5% of customers 

dropped out of green pricing programs. Thus, the annual retention rate among programs 

was generally 95% or better. Historically, utilities that have reported higher-than-average 

turnover rates among green power customers cite high turnover among all utility 

customers; for example, several of these utilities have service territories that include large 

universities where customer turnover is recurrent. And a few utilities have experienced 

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

However, other utilities have reported steady enrollments in green power programs 

despite rate increases. 

Renewable Energy Sales and Supplies 

Green Power Sales and Revenues 

Collectively, utilities sold 895 million kilowatt-hours (kWh), or 102 average megawatts 

(aMW), of green power to customers in 2002 (see Table 5). Green power sales to all 

customer classes grew by 58% in 2002, compared to 25% in 2001. The 10 topperforming green pricing programs represented more than 80% of total sales (see 

Appendix C). Nonresidential customers accounted for about one-quarter of all purchases 

in 2002. 

On average, residential customers spent $4.83 a month to purchase or support green 

power through utility programs. We calculate that utilities collected about $15 million in 

revenues from green power sales in 2002. Green pricing program revenues are typically 

used to pay the above-market costs of renewables as well as the costs of administering 

and marketing the program – although the treatment of the latter differs by utility (see 

Holt and Holt 2004; Swezey and Bird 2001). 

Table 5: Annual Sales of Green Energy through Utility Green Pricing Programs 

(millions of kWh) 

2000 2001 2002 

Residential customers --- 332.7 661.3 

Nonresidential customers --- 164.4 233.7 

All customers 453.7 568.0 895.0 

% Nonresidential --- 29% 26% 

*Sales information for customer segments not available for 2000.

Ownership vs. Purchases of Supplies 

About one-quarter of utilities supply their green pricing programs entirely from their own 

renewable energy generation facilities (see Table 6). Another 46% of utilities either 
8

purchase all of their power from an independent power generator or purchase renewable 

energy certificates (RECs) from a marketer or supplier.5 The remaining utilities use a 

combination of these approaches to supply their green power programs. Collectively, 

utilities purchased 102.6 million kWh of RECs to serve green power customers in 2002, 

which represents about 11% of all green power sold through utility green pricing 

programs. The use of RECs to supply utility green pricing programs is a relatively recent 

development; prior to 2001, very few utilities purchased unbundled RECs. Most utilities 

that supply their programs with RECs are in the Pacific Northwest. 

Table 6: Utility Procurement of Renewable Energy Supplies, 2002 

Utilities that 

Own 

Generation 

Utilities that 

Purchase 

Power 

Utilities that 

Purchase 

RECs 

For 100% of program power 

supplies 16 24% 23 35% 7 11% 

For at least 50% of program power 

supplies 20 30% 29 44% 7 11% 

For any fraction of program power 

supplies 25 38% 30 45% 10 15% 

Note: Percentages based on 60 respondents. 

New Renewable Capacity Installations 

The amount of renewable energy capacity installed to serve green pricing programs has 

grown dramatically over the last several years (see Figure 1).6

 At the end of 2002, 

utilities had installed nearly 290 MW of renewables capacity with another 140 MW 

planned (see Table 7). In addition, some utilities purchase power or RECs from 

wholesale marketers that are not included in these estimates. Wind, solar, and landfill gas 

are the renewable resources most commonly included in green pricing programs, with 

wind representing the largest portion of the total capacity – at the end of 2002, wind 

energy represented nearly 80% of the installed capacity. 

While many programs use blends of renewable energy sources, some programs feature 

only one energy source. Among the programs offered, 32 programs use only wind, 10 use 

only solar, and seven use only biomass. The remaining programs offer a blend of two or 

more resources. 

 

5

 RECs represent the environmental attributes of renewable energy-generating facilities and can be sold 

separately from commodity electricity. 

6

 The timing of capacity installations in the more recent years has been influenced by the availability of the 

federal production tax credit (PTC) for wind energy facilities. As with wind energy installations generally, 

more capacity has been installed in years when the PTC was scheduled to expire (1999 and 2001) as 

developers have rushed to complete projects. Development has lagged in the interim years because of the 

uncertainty surrounding the PTC extension and the lead times necessary to plan and complete projects. This 

explains the relatively small amount of capacity installed in 2000 and 2002, compared to capacity additions 

in 2001 and those planned for 2003. 
9

Figure 1: Annual and Cumulative Renewable Energy Capacity Installations 

to Serve Green Pricing Programs (Megawatts) 

 

Table 7: New Renewables Capacity Supplying Green Pricing Programs, 2002 

(Megawatts) 

Source Installed Planned 

Wind 225.6 78.5% 111.3 80.3% 

Biomass 43.5 15.1% 23.9 17.2% 

Solar 4.2 1.4% 1.4 1.0% 

Geothermal 5.5 1.9% 0.0 0.0% 

Small Hydro 8.6 3.0% 2.0 1.4% 

Total 287.3 100.0% 138.5 100.0% 

Source: Bird and Swezey 2003b

Product Type 

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

renewable energy to meet some or all of their electricity needs. The green power 

premium charged in these “energy-based” programs is typically expressed in ¢/kWh or 

$/kWh block. Other programs are structured to allow customers to contribute funds that 

are used to support the development of renewable energy sources. These so-called 

“contribution programs” have become less common over time and currently represent 

only 15% of all programs (see Figure 2). Finally, a few utilities have offered programs 

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

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

might be offered the option to pay $6 each month to support 100 watts of solar energy 

0

20

40

60

80

100

120

140

160

1998 1999 2000 2001 2002

0

50

100

150

200

250

300

350

 Annual

 Cumulative

Annual Cumulative
10

development. Capacity-based programs are no longer actively marketed and, in some 

cases, are being phased out in favor of energy-based programs. 

 

 

Figure 2: Types of Green Pricing Programs 

Energy Blocks vs. Percentage of Use 

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

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

from solar systems to 1,000 kWh for energy derived from a blend of new wind sources 

and existing renewables. The most common block size offered to residential customers is 

100 kWh, with an average size of 125 kWh. Many utilities offer larger block sizes to 

nonresidential customers and some offer customers the option of purchasing green power 

for all of the electricity they use. 

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

their electricity needs. Most of these programs allow residential customers to elect to 

have 25%, 50%, or 100% of their electricity come from renewable sources, while a few 

offer fractions as small as 10%. Often, commercial and industrial customers are able to 

purchase green power for a smaller fraction of their electricity use. 

Pricing 

Price Premiums 

In 2002, price premiums for energy-based programs ranged from 0.7¢/kWh to 

17.6¢/kWh, with an average premium of 2.82¢/kWh and a median of 2.50¢/kWh. Figure 

3 displays price premiums for individual utility programs – solar-only products dominate 

the high end of the price range. Since 2000, the average price premium has dropped at an 

average rate of about 10% annually although the median premium has remained constant 

(see Table 8). Some of this reduction can be attributed to lower than expected costs for 

renewable energy supplies and the availability of state or federal financial incentives. In 

82%

15%

3%

 Energy-based

 Contribution

 Capacity-based
11

addition, increases in the cost of natural gas have reduced the cost spread between 

renewable energy and gas-fired generation. 

 

 

Figure 3: Utility Green Pricing Program Premiums 

(Energy-Based Programs Only) 

Table 8: Price Premiums of Utility Green Power Products 

(¢/kWh) 

1999 2000 2001 2002 

Average Premium 2.15 3.48 2.93 2.82 

Median Premium 2.00 2.50 2.50 2.50 

Range of Premiums 0.5-5.0 (0.5)-20.0 0.9-17.6 0.7-17.6 

10 Programs with Lowest Premiums* 0.4-2.5** (0.5)-2.5 1.0-1.5 0.7-1.5 

Number of Programs Represented 24 50 60 80 

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

This includes only programs that have installed – or announced firm plans to install or purchase power from – 

new renewable energy sources. 

**Data for April 2000.

Table 9 presents green pricing premiums by type of utility. Investor-owned utilities have 

the highest average price premium (3.5¢/kWh) while public and cooperative utilities have 

lower average premiums (2.5¢/kWh). Public utilities have the lowest median premium 

(2.0¢/kWh). Some of the difference among utility types may result from a greater 

0

1

2

3

4

5

6

7

8

9

10

11

12

median = 2.5¢/kWh

17.6¢/kWh

¢/kWh
12

tendency of IOUs to include program administration and marketing costs in the premium 

or to seek recovery of program costs over a shorter period of time. The higher average 

premium calculated for investor-owned utilities may also stem from the fact that several 

IOUs offer solar-only programs with relatively high premiums, on the order of 10¢/kWh 

or higher. 

Table 9: Green Pricing Premiums by Utility Type, 2002 

(¢/kWh) 

Type of Utility Average Median Range 

Investor-owned 3.54 2.5 0.78 – 17.6 

Public 2.51 2.0 0.70 – 11.6 

Cooperative 2.48 2.5 1.0 – 3.5 

All Utilities 2.82 2.5 0.70 – 17.6 

Protection from Fuel Costs and Environmental Charges 

Because most renewable energy facilities do not rely on fuel, some utilities offer fixedprice green power products or exempt their green power customers from fuel-cost 

charges. Seven utilities operating programs in 2002 included this feature as a component 

of their green pricing product.7

 One of these utilities also exempts green power customers 

from the costs associated with making environmental improvements at its fossil-fuel 

generating facilities. 

Marketing 

Marketing Costs 

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

cost – the amount spent on marketing, divided by the number of new customers that 

enroll in the program. Utilities reported a median customer-acquisition cost for green 

pricing programs of $35, with an average of $43 (see Table 10).8

 However, the responses 

varied widely, ranging from $1 to $200 (see Figure 4). And customer-acquisition costs 

can vary over time. 

Another indication of the cost and level of effort devoted to marketing is the fraction of 

the total program budget spent on marketing.9 Utilities reported that, on average, about 

 

7

 The seven utilities offering fuel-price stability were: Alliant Energy, Austin Energy, Eugene Water & 

Electric Board, Madison Gas and Electric, Otter Tail Power, We Energies, and Xcel Energy (Colorado 

program only). 

8

 Only about half of the utilities provided this information. This relative lack of responses may be due in 

part to the fact that many utilities do not track customer acquisition costs. 

9

 Program costs typically include the above-market costs of acquiring the renewable energy resources, 

marketing, and program administration. 
13

20% of the total green power program budget was spent on marketing, with a median of 

15% (see Table 10).10

 

Table 10: Customer Acquisition Costs and Marketing Budgets, 2002 

Average Median Responses

Customer acquisition costs $43 $35 28 

Marketing component of total program budget 19.6% 14.5% 29 

 

Figure 4: Utility-Reported Customer Acquisition Costs, 2002 

Utilities were not specifically asked to report the size of the marketing budget. However, 

some utilities have publicly reported this information. For example, an investor-owned 

utility with 700,000 customers that teams with a competitive marketer to promote three 

separate green power product offerings reported a total marketing budget of $1,100,000 

in 2002, while a municipal utility of 500,000 customers reported a marketing budget of 

$200,000 annually (Harris 2002). A mid-sized municipal utility, which serves about 

80,000 customers, reported a marketing budget of about $35,000 per year; while a small 

electric cooperative, with about 12,000 members, reported a marketing budget of about 

 

10 Again, only about half of the utilities responding provided this information. Also, the responses to this 

question varied considerably, suggesting that utilities may have interpreted it differently. Some utilities 

may have reported the percentage of all program revenues spent on marketing, while others may have 

reported the fraction of program implementation budgets devoted to marketing. Given that the intention 

was to collect information on the former, responses indicating that 100% of the budget was spent on 

marketing were omitted. 

$0

$20

$40

$60

$80

$100

median = $35

$200

$167
14

$3,000 annually (Harris 2002). Another small municipal utility (12,000 customers) 

reported that the utility’s entire marketing budget had been used to promote its green 

pricing program. The program manager reported that the utility received more positive 

publicity and recognition within the community from promoting its green pricing 

program than from any previous marketing activities.11 

Cost Effectiveness of Marketing Techniques 

Utility green pricing program managers were asked to rank the cost-effectiveness of 

various marketing techniques used in 2002 (see Table 11). Although telemarketing was 

rated highly, it was not commonly used – only five utilities reported using telemarketing. 

Bill inserts and publicity (e.g., newspaper articles or other local press) were also highly 

rated and were used more frequently. Also commonly used, but ranked below bill inserts 

and publicity in cost-effectiveness, were utility newsletters that featured articles about the 

green power program. In some cases, particularly for smaller utilities, newsletters are the 

primary method of communicating with customers. Direct mail, which can be used to 

target a select group of utility customers, received a middle rating (3 out of 5) in terms of 

cost-effectiveness. Several utilities reported using direct mail specifically to target small 

commercial and industrial customers. Other marketing strategies reported by utilities but 

not listed in the questionnaire were: Web site/online ads (reported by 6 utilities), public 

presentations (2), magazine articles (1), door hangers (1), school essay contest (1), oneon-one visits (1), and call center (1).12

Table 11: Ranking the Cost-Effectiveness of Marketing Strategies 

Marketing Technique Rating* Responses 

Telemarketing 5.0 5 

Bill inserts 4.2 39 

Publicity 4.0 38 

Utility newsletter 3.3 42 

Direct mail 3.1 33 

Other 3.1 19 

Events 2.7 48 

Television ads 2.2 12 

Radio ads 2.2 22 

Newspaper ads 2.1 26 

Billboards 2.0 4 

*Respondents were asked to rank the cost-effectiveness of the marketing 

strategies listed on a scale from 1 to 5, with 5 being the most cost-effective. 

 

 

11 Presentation by Chris Reed, Moorhead Public Service, to the Green Pricing Workshop, St. Paul, MN, 

October 24, 2001. 

12 Lieberman 2002 reviewed marketing data for public utilities with similar findings except that direct mail 

was ranked higher and events lower. 
15

Program Implementation 

Enrollment Options 

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

programs were: over the phone through the utility’s call center, via mail-in cards, and 

during special events. Enrollment via the utility’s Web site was also common with about 

three-quarters of the programs offering this option. Less than 10% of utilities allowed 

customers to enroll by checking a box on their utility bills. Other methods listed included 

newspaper advertisements and Web-based forms that could be mailed to the utility. On 

average, utilities offered four of the six enrollment options listed in the questionnaire (see 

Table 12). 

Table 12: Methods of Enrolling in Green Pricing Programs 

Positive 

Responses 

Phone (through utility call center) 58 91.9% 

Sign up at special events 57 90.3% 

Returning mail-in card 57 90.3% 

Utility Web site 46 74.2% 

Other 14 22.6% 

Check-box on utility bill 5 8.2% 

Note: The number of respondents was 62 for all methods except for checkbox (61). 

Enrollment Term 

About one-third of utilities require residential customers to subscribe to green pricing 

programs for a minimum period of time while 40% have an enrollment term requirement 

for nonresidential customers (see Table 13). One year is the most common minimum 

enrollment period with requirements ranging from zero to 10 years. In some cases, 

utilities require nonresidential customers to sign up for longer periods of time than 

residential customers. Among all utilities, less than 10% require enrollment terms of 

more than one year for residential customers, while about 14% require nonresidential 

enrollment beyond one year. Despite the existence of these contract requirements, some 

utilities have reported that they are not enforced. 
16

Table 13: Enrollment Term by Customer Segment 

Residential Nonresidential 

Percent of utilities with a minimum enrollment term 33% 40% 

Most common enrollment term 1 year 1 year 

Range of contract terms 0-10 years 0-10 years 

Program Evaluations and Market Research 

Nearly two-thirds (64%) of utilities reported that they had conducted customer research 

to aid in the design of their green pricing program or to develop a marketing plan. In 

addition, 44% of utilities indicated that they had conducted an evaluation of their green 

pricing program. However, the questionnaire did not ask whether the research or 

evaluation was conducted specifically in 2002 – some utilities may have performed 

customer research or evaluations in previous years, but not reported it because the 

majority of the questions pertained to 2002. Therefore, there may be a downward bias in 

these responses. 

Customer Value 

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

to customers. For example, customers may be more willing to participate in a program if 

their participation is recognized or rewarded, or if they receive other products and 

services, such as compact fluorescent light bulbs or store discounts. Wiser et al. 2004 

found evidence that providing additional values increases green power purchase rates 

among nonresidential customers. 

Table 14 indicates the number and percentage of utilities that provide additional benefits 

to customers, based on a list of options included in the 2002 questionnaire. Of the 11 

options listed, respondents indicated that their utilities offered an average of three 

additional benefits to their green pricing customers. The most common methods were 1) 

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

periodic program updates, and 2) to provide decals that can be displayed in windows. 

Other types of customer recognition were also common. For example, 45% of utilities 

reported that they recognized business-customer participation in program advertisements 

or local media, while 41% reported that they provided customers with plaques or other 

items. About one-third of utilities provided customers with tours of renewable energy 

projects or worked with local schools to develop renewable energy educational programs 

or install renewable energy systems on school buildings. Nearly one-quarter of utilities 

indicated that they provided customers with compact fluorescent light bulbs or other 

energy efficiency products.13 

 

13 This may be an overestimate because some utilities may have indicated that they offer energy efficiency 

products or services, even if they are not directly associated with the green power programs. 
17

Table 14: Methods of Providing Additional Program Benefits 

Positive 

Responses Respondents % 

Newsletters that provide program updates 39 61 63.9% 

Decals for display in store windows 37 61 60.7% 

Recognition of business customers in program 

ads or local media 28 62 45.2% 

Plaques or other items for recognition 25 61 41.0% 

Tours to renewable energy project sites 22 61 36.1% 

Installations on schools/renewable energy 

education programs 19 61 31.1% 

Compact fluorescents or efficiency products 14 61 23.0% 

Protection from fuel-cost increases 7 63 11.1% 

Discounts or promotions at local businesses 5 61 8.2% 

Other 3 58 5.2% 

Exemption from environmental fees 1 62 1.6% 

Conclusions and Observations 

Based on our review of utility green pricing program data, there are a number of positive 

trends indicating that green pricing has the potential to substantially impact renewable 

energy development nationally. As of the end of 2002, about 400 MW of renewable 

energy capacity was installed or planned as a result of utility green pricing programs. 

Since 1998, average annual growth in the number of green pricing programs has 

exceeded 40%. As these offerings have expanded, there has been a fourfold increase in 

the number of green pricing participants. And renewable energy sales have reached 

nearly 900 million kWh annually, which represents an increase of nearly 60% from 2001. 

On the other hand, just more than 10% of utilities, representing about 20% of the national 

electricity customer base, offered green pricing at the end of 2002. And customer 

participation rates in existing green pricing programs remain low, averaging little more 

than 1% among all utilities and 2% for programs that have been in place for three or more 

years. These rates are well below the 50% to 70% of customers who in utility market 

research surveys indicate that they are willing to pay more for renewable energy (Farhar 

1999). Furthermore, a relatively small number of programs account for the vast majority 

of renewable energy sales and customers – the top 10 performing programs are 

responsible for three-quarters of all green pricing participants and 80% of renewable 

energy sales. 

Over the near term, there will likely be continued growth in the number of green pricing 

programs as state green pricing mandates take hold and currently planned programs are 

implemented. However, the overall impact that green pricing programs will have on 

stimulating future renewable energy development will depend on translating the success 

to date of a relatively few programs to the remainder of the utility industry. 
18

References 

Bird, L. and B. Swezey, 2003a. Green Power Marketing in the United States: A Status Report 

(Sixth Edition), NREL/TP-620-35119. Golden, CO: National Renewable Energy Laboratory, 

October. http://www.eere.energy.gov/greenpower/pdf/35119.pdf

Bird, L. and B. Swezey, 2003b. Estimates of Renewable Energy Capacity Serving Green Power 

Markets in the United States. Golden, CO: National Renewable Energy Laboratory, February. 

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

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

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

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

Harris, N., 2002. Powerful Choices III: A Survey of Retail Green Power Programs in the Pacific 

Northwest and Beyond. Portland, OR: Renewable Northwest Project, August. 

http://www.rnp.org/Resources/PC3Intro.html 

Holt, E. and M. Holt, 2004. Green Pricing Resource Guide. Second Edition (Review Draft). 

Prepared for the American Wind Energy Association, Washington, D.C. 

Lieberman, D., 2002. Green Pricing at Public Utilities: A How-To Guide Based on Lessons 

Learned to Date. San Francisco, CA: Center for Resource Solutions, October. 

http://www.resource-solutions.org/pdf/PRP.Green.Pricing.Report.10.29.02.pdf

Swezey, B. and L. Bird, 2001. Utility Green Pricing Programs: What Defines Success?

NREL/TP-620-29831. Golden, CO: National Renewable Energy Laboratory, August. 

http://www.eere.energy.gov/greenpower/29831.pdf 

Swezey, B. and L. Bird, 2000. Green Power Marketing in the United States: A Status Report 

(Fifth Edition), NREL/TP-620-28738. Golden, CO: National Renewable Energy Laboratory, 

August. http://www.eere.energy.gov/greenpower/pdf/28738.pdf 

Swezey, B. and L. Bird, 1999. Information Brief on Green Power Marketing (Fourth Edition), 

NREL/TP-620-26901. Golden, CO: National Renewable Energy Laboratory, August. 

http://www.nrel.gov/analysis/emaa/brief_4.html 

Washington Department of Community, Trade and Economic Development (CTED) and Utilities 

Transportation Commission (UTC), 2002. Green Power Programs in Washington: A Report to 

the Legislature. Olympia, WA, December. 

http://www.cted.wa.gov/DesktopDefault.aspx?tabid=440

Wiser, R., M. Bolinger, and E. Holt, 2000. Customer Choice and Green Power Marketing: A 

Critical Review and Analysis of Experience to Date, LBNL-46072. Berkeley, CA: Lawrence 

Berkeley National Laboratory, August. http://eetd.lbl.gov/ea/EMS/reports/46072.pdf 

Wiser, R., S. Olson, L. Bird and B. Swezey, 2004. Utility Green Pricing Programs: A Statistical 

Analysis of Program Effectiveness, LBNL-54437. Berkeley, CA: Lawrence Berkeley National 

Laboratory, February. http://eetd.lbl.gov/ea/ems/reports/54437.pdf
19

Appendix A 

Utility Green Pricing Program Questionnaire 

1. Utility name ________________________________ 

2. Name of green power program ___________________________ (if you have multiple programs, please 

fill out a separate form for each program) 

3. Year program was launched ________________ 

4. Which states is the program offered in? ________________________________ 

Participation 

5. In the table below, please provide participation data as of December 31, 2002. If data is provided for a 

different month (e.g., November) please specify _______________ 

Question Response 

Number of current residential green power participants 

Number of current nonresidential green power participants 

Number of residential customers (or members) eligible to participate 

Number of nonresidential customers (or members) eligible to participate 

Is the program open to new customers? Yes/no 

Number of customers on waiting list 

Number of participants who have dropped out of the program this year 

Minimum period of time residential customers must participate in program (e.g., 1 year) 

Minimum period of time non-residential customers must participate (e.g., 2 years) 

6. For programs that are jointly offered to multiple distribution cooperatives or municipal utilities, please 

indicate the highest overall participation rate achieved by a utility participating in the program. 

_______________ 

Sales for the past year 

7. In the table below, please indicate the sales of green power to customers during the previous 12 months. 

Please also indicate the top three nonresidential purchasers and the amount purchased during the past 12 

months. 

Green power sales for most recent 12 months Blocks Block size KWh/year of 

green power 

Green power sales to residential customers 

Green power sales to nonresidential customers 

Top 3 non-residential purchasers: 

1. 

2. 

3. 

Renewable Energy Supplies 

8. Of the renewable energy used to supply your program, what percentage comes from the following? 

 ____Renewable projects owned or partly owned by your utility 

____Renewable energy purchases from others 

____Renewable certificate purchases 
20

9. In the table below, please indicate the type and amount of renewable resources used to supply your green 

pricing program during 2002. 

Nameplate 

Capacity 

Installed (kW) 

Energy Purchases 

in 2002 (kWh/yr) 

Nameplate Capacity 

Planned (kW) 

Wind 

PV 

Solar Thermal 

Landfill methane 

Other Biomass 

Hydro 

Geothermal 

Premium 

10. Please indicate the price premium charged for this green power product 

_______________________________ 

11. Was there a change in the premium in 2002? Yes/no _____________ 

 If so, why? 

___________________________________________________________________________ 

12. Are green power customers protected, by virtue of their green power purchase, from increases in fuel 

costs (i.e., natural gas) or increases in the price of conventional electricity? Yes/no If so, how? 

______________________________________________________________________________________

______________________________________________________________________________________

______________________________________________________________________________________

______________________________________________________________________________________ 

Program Design and Implementation 

13. Have you done your own customer research to aid in the design of your green power product or 

development of your marketing plan? Yes/no 

14. Have you performed an evaluation of the program? Yes/no 

15. In which of the following ways can customers sign up for your green power program? (check all that 

apply) 

Utility Web site By returning a mail-in card 

Checking a box on their electric bill Over the phone through the utility call center 

Sign up at special events Other? 

 

Marketing 

16. What percentage of the green power program budget was spent on marketing in 2002? 

_______________ 

17. On average, how much does it cost to sign up each residential customer ($/customer)? 

_______________ 
21

18. In the table below, please indicate how many times, if any, you have used the following marketing 

strategies for your green power program in the past year. For example, if bill inserts, direct mail, or 

newsletters were sent to 30,000 customers during the year, please indicate 30,000. Also, please rank the 

cost-effectiveness of the strategy on a scale of 1 to 5, with 5 being the most cost-effective strategy for 

obtaining customers. 

 

Strategy Frequency Cost-effectiveness 

(1-5, 5=Best) 

Bill inserts # of inserts/year 

Direct mail # of mail pieces/year 

Utility newsletter that mentions green 

power 

 # of newsletters/year 

Television # of commercials 

aired/year 

Radio # of announcements/year 

Newspapers # of ads/year 

Telemarketing # of calls/year 

Billboards # of billboards 

Events # events/year 

Publicity/feature stories (non-paid) # of articles/year 

Other? 

Value for Consumers 

19. What other value-added products or services do you provide to your green power customers? Please 

check as many as are applicable. 

Compact fluorescents or efficiency products Decals for display in store windows 

Recognition of business customers in program 

ads or local media 

 Installations on schools/renewable energy 

education programs 

Discounts or promotions at local businesses Plaques or other items for recognition 

Newsletters that provide program updates Protection from fuel cost increases 

Tours to renewable energy project sites Exemption from environmental fees 

Other (please list) 

Confidentiality – Individual utility responses to this survey regarding customer, sales, and marketing 

information will be held confidential. Data will be used to prepare NREL’s list of Top 10 utility green 

pricing programs and to provide aggregate industry data to the U.S. DOE and the general public. 

Please e-mail or fax this questionnaire by Wednesday, January 15 to: Lori Bird, lori_bird@nrel.gov, Fax 

(303) 384-7411. If questions, please call Lori Bird at (303) 384-7412. 
22

Appendix B 

Table B-1: Utilities Offering Green Pricing Programs in 2002 

Investor-Owned Utilities 

Alabama Power Company 

Alliant Energy 

Arizona Public Service 

Avista Utilities 

Consumers Energy 

Detroit Edison 

El Paso Electric 

Green Mountain Power 

Gulf Power 

Hawaiian Electric 

Idaho Power Company 

Indianapolis Power & Light Company 

Madison Gas & Electric 

Minnesota Power 

Otter Tail Power Company 

PacifiCorp* 

Portland General Electric 

PSI Energy 

Puget Sound Energy 

Tampa Electric Company 

Tucson Electric Power Company 

We Energies 

Wisconsin Public Service Corporation 

Xcel Energy 

Electric Cooperatives

Basin Electric Power Cooperative* 

Central Electric Cooperative 

Dairyland Power Cooperative* 

Dakota Electric Association 

East Kentucky Power Cooperative* 

Georgia Electric Membership Corporation* 

Great River Energy* 

Holy Cross Energy 

Hoosier Energy 

Midstate Electric Cooperative 

Minnkota Power Cooperative* 

Orcas Power & Light Cooperative 

Oregon Trail Electric Cooperative 

PNGC Power* 

Peninsula Light Company 

Tri-State Generation and Transmission Assoc.* 

Wabash Valley Power Association* 

Yampa Valley Electric Association

Federal

Tennessee Valley Authority* 

Municipals/Other Public Utilities

City of Alameda 

Austin Energy 

Benton County PUD 

City of Bowling Green 

Cedar Falls Utilities 

Chelan County PUD 

Clallum County PUD 

Clark Public Utilities 

Colorado Springs Utilities 

Cowlitz PUD 

Estes Park Light & Power 

Eugene Water & Electric Board 

Fort Collins Utilities 

Grant County PUD 

Grays Harbor PUD 

Lansing Board of Water and Light 

Lincoln Electric System 

Longmont Power & Communications 

Los Angeles Department of Water and Power 

Loveland Water and Power 

Missouri River Energy Services* 

Moorhead Public Service 

Nebraska Public Power District* 

City of New Smyrna Beach 

Omaha Public Power District 

Pacific County PUD #2 

City of Palo Alto Utilities 

Platte River Power Authority* 

Roseville Electric 

Sacramento Municipal Utility District 

Salt River Project 

City Public Service of San Antonio 

Santee Cooper* 

Seattle City Light 

Snohomish County PUD 

Southern Minnesota Municipal Power Agency* 

City Utilities of Springfield 

Tacoma Power 

City of Tallahassee 

Traverse City Light & Power 

Wisconsin Public Power Inc.* 

* denotes program offered through multiple utilities or 

distribution cooperatives
23

Appendix C 

Table C-1: Green Pricing Program Renewable Energy Sales (as of December 2002) 

Rank Utility Resources Used 

Sales 

(kWh/year) 

Sales 

(Average 

MW)a

1 Austin Energy Wind, landfill gas, 

solar 251,520,000 28.7 

2 Sacramento Municipal Utility 

District 

Landfill gas, wind, 

solar 104,344,000b

 11.9 

3 Xcel Energy Wind and solar 103,739,000c

 11.8 

4 Los Angeles Department of 

Water and Power 

Wind and landfill 

gas 66,666,000d

 7.6 

5 Portland General Electrice Wind and 

geothermal 57,989,000 6.6 

6 PacifiCorpe Wind and 

geothermal 55,615,000 6.3 

7 Tennessee Valley Authority Wind, biomass, 

landfill gas, solar 35,955,000 4.1 

8 We Energies Landfill gas, wind, 

hydro 35,161,000 4.0 

9 Puget Sound Energy Wind and solar 20,334,000 2.3 

10 Madison Gas & Electric Wind 15,593,000 1.8 

a An “average megawatt” is a consistent measure of capacity equivalent that assumes the capacity 

operates continuously. 

b

 Includes an estimated 3 million kWh of generation from the 1.9 MW of PV installed through the 

PV Pioneers program. 

c

 Includes an estimated 175,000 kWh of generation from the 100 kW of PV installed through the 

Renewable Energy Trust program. 

d Data for 2001 from program audit conducted by the Los Angeles City Controller, August 2002. 

e

 Marketed in partnership with Green Mountain Energy Company. 
24

Table C-2: Total Number of Customer Participants (as of December 2002) 

Rank Utility Program Name(s) Participants 

1 

Los Angeles Department of Water and 

Power 

Green Power for a Green 

LA 72,732a 

2 Xcel Energy Windsource 

Renewable Energy Trust 32,600b

3 PacifiCorpc Blue Sky 

Renewable Usage 

Salmon-Friendly 

20,028 

4 Portland General Electricc Clean Wind Power 

Renewable Usage 

Salmon-Friendly 

19,623 

5 Sacramento Municipal Utility District Greenergy 

PV Pioneers 19,172d

6 We Energies Energy for Tomorrow 11,014 

7 Alliant Energy Second Nature 7,280 

8 Austin Energy GreenChoice 6,725 

9 Tennessee Valley Authority Green Power Switch 6,487 

10 Wisconsin Public Service SolarWise for Schools 

NatureWise 5,644e 

a

 Includes 41,833 lifeline/low-income customers that have signed up for green power but do not 

pay a premium. 

b There were 9,420 participants in the Renewable Energy Trust program as of December 2002. 

About 20% of these customers also participate in the Windsource program. c

 Marketed in partnership with Green Mountain Energy Company. 

d About 800 customers participate in the PV Pioneers program. e A total of 1,048 customers participate in the NatureWise program. There are 204 customers that 

participate in both of the utility’s green power programs. 
25

Table C-3: Customer Participation Rate (as of December 2002) 

Rank Utility Program Name(s) 

Customer 

Participation 

Rate 

Program 

Start 

Date 

1 Moorhead Public Service Capture the Wind 5.8% 1998 

2 Orcas Power & Light Green Power 5.5% 1999 

3 Los Angeles Department of 

Water and Power 

Green Power for a Green 

LA 5.2%a

 1999 

4 Holy Cross Energy 

Wind Power Pioneer 

Local Renewable Energy 

Pool 

4.9% 1998 

5 Central Electric Cooperativeb Green Power 3.7% 1999 

6 Madison Gas & Electric Wind Power Program 3.6% 1999 

6 Sacramento Municipal Utility 

District Greenergy, PV Pioneers 3.6% 1997 

8 Preston Public Utilitiesc Wind Power 3.4% 2000 

9 Cass County Electric 

Cooperatived Infinity Wind Energy 3.1% 1999 

10 Cedar Falls Utilities Wind Energy Electric 

Project 3.0% 1999 

10 Eugene Water & Electric 

Board EWEB Wind Power 3.0% 1999 

a

 Includes lifeline/low-income customers that have signed up for green power but do not pay a 

premium. 

b Supplied by the Pacific Northwest Generating Cooperative. c Supplied by Southern Minnesota Municipal Power Agency. 

d Supplied by Minnkota Power Cooperative. 
26

Table C-4: Price Premium Charged for New, Customer-Driven Renewable Powera 

(as of December 2002) 

Rank Utility Resources Used Premium 

1 Clallam County Public Utility 

District Landfill gas 0.70¢/kWh 

2 Roseville Electric Reinjected geothermal and 

solar 1.00¢/kWh 

2 Sacramento Municipal Utility 

District Landfill gas, hydro, wind 1.00¢/kWh 

4 Pacific County Public Utility 

District Wind and hydro 1.05¢/kWh 

5 Austin Energyb

 Wind, solar, landfill gas 1.08¢/kWh 

6 Eugene Water and Electric Board Wind 1.30¢/kWh 

7 City of Bowling Green (Ohio) Small hydro and solar 1.35¢/kWh 

7 Dakota Electric Association Wind 1.35¢/kWh 

9 Clark Public Utilities Wind and solar 1.50¢/kWh 

9 Great River Energyc

 Wind 1.50¢/kWh 

9 Oregon Trail Electric Cooperative Wind 1.50¢/kWh 

9 Moorhead Public Serviced

 Wind 1.50¢/kWh 

a

 Includes only programs that have installed – or announced firm plans to install or purchase 

power from – new renewable resources. 

b Price premium for customers who signed up for Phase 2 of program. Customers are exempt 

from fuel charges. 

c

 Suggested retail price for member distribution cooperatives. 

d

 Adjusted to reflect the cost of 100% new wind power. 
REPORT DOCUMENTATION PAGE Form Approved 

 OMB NO. 0704-0188 

Public reporting burden for this collection of information is estimated to average 1 hour per response, including the time for reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information. Send comments regarding this burden estimate or any other aspect of this collection of information, including suggestions for reducing this burden, to Washington Headquarters Services, Directorate for Information Operations and Reports, 1215 Jefferson Davis Highway, Suite 1204, Arlington, VA 22202-4302, and to the Office of Management and Budget, Paperwork Reduction Project (0704-0188), Washington, DC 20503. 

1. AGENCY USE ONLY (Leave blank) 2. REPORT DATE

February 2004 

3. REPORT TYPE AND DATES COVERED 

Technical Report - Analysis 

4. TITLE AND SUBTITLE

Utility Green Pricing Programs: Design, Implementation, and Consumer Response 

6. AUTHOR(S) 

Lori Bird, Blair Swezey, Jørn Aabakken 

5. FUNDING NUMBERS

TA: AS73.8004 

7. PERFORMING ORGANIZATION NAME(S) AND ADDRESS(ES) 

National Renewable Energy Laboratory 

1617 Cole Blvd. 

 Golden, CO 80401-3393 

8. PERFORMING ORGANIZATION 

REPORT NUMBER 

NREL/TP-620-35618

9. SPONSORING/MONITORING AGENCY NAME(S) AND ADDRESS(ES) 10. SPONSORING/MONITORING 

AGENCY REPORT NUMBER

11. SUPPLEMENTARY NOTES

12a. DISTRIBUTION/AVAILABILITY STATEMENT

National Technical Information Service 

U.S. Department of Commerce 

5285 Port Royal Road 

 Springfield, VA 22161

12b. DISTRIBUTION CODE

 

13. ABSTRACT (Maximum 200 words)

The term green pricing refers to programs offered by utilities in traditionally regulated electricity markets, which allow customers to 

support the development of renewable energy sources by paying a small premium on their electric bills. Since the introduction of 

the concept in the United States, the number of unique utility green pricing programs has expanded from just a few programs in 

1993 to more than 90 in 2002. About 10% of U.S. utilities offered a green pricing option to about 26 million consumers by the end of 

2002. This report provides: 1) aggregate industry data on consumer response to utility programs, which indicate the collective 

impact of green pricing on renewable energy development nationally; and 2) market data that can be used by utilities as a 

benchmark for gauging the relative success of their green pricing programs. Specifically, the paper presents current data and 

trends in consumer response to green pricing, as measured by renewable energy sales, participants, participation rates, and new

renewable energy capacity supported. It presents data on various aspects of program design and implementation, such as product 

pricing, ownership of supplies, retention rates, marketing costs, the effectiveness of marketing techniques, and methods of enrolling 

and providing value to customers. 

15. NUMBER OF PAGES 14. SUBJECT TERMS 

analysis, green pricing, consumer response, green pricing programs, renewable energy 

supplies, green energy, customer participation rates, renewable energy capacity 

installations, price premiums, green power products, green power markets, utility green 

pricing programs, Lori Bird, Blair Swezey, Jørn Aabakken. 

16. PRICE CODE

17. SECURITY CLASSIFICATION 

OF REPORT

Unclassified 

18. SECURITY CLASSIFICATION 

OF THIS PAGE

Unclassified

19. SECURITY CLASSIFICATION 

OF ABSTRACT

Unclassified

20. LIMITATION OF ABSTRACT

UL 

 NSN 7540-01-280-5500 Standard Form 298 (Rev. 2-89) 

Prescribed by ANSI Std. Z39-18 

298-102