Thursday, August 12, 2010
Recently we switched our New Jersey home to a third party electricity supplier that gives customers a choice of either 20% or 100% wind power -- and that charges about 10% to 15% less per kwh than the utility's rates.
This is one of the little known benefits of energy deregulation. In many states, the delivery of electricity has been separated from the supply. Our utility company still provides delivery, service, emergency repairs, customer support and a single bill, but we can choose a third party for the supply portion of our bill.
With supply opened up to competition, third party suppliers are competing for our business by providing electricity that is greener and less expensive. It is similar to when long distance companies competed with one another after phone services were deregulated.
We quickly understood the financial impact of our choice when our electric bill went down, but I wasn't really sure about the "greenness" of the electricity. Was this just a marketing gimmick? After all, it's not as if the specific watts that find their way to our home can be identified as wind generated. The utility and the third party suppliers push all their electricity onto the same grid, and by the time it reaches our home you cannot distinguish between the watt generated by a dirty coal-fired plant and the nice, clean wind power that we bought. In fact, depending on the time of day, overall demand on the system, and strength of the wind, most of the electricity powering our home could be "dirty."
So, does it matter that we signed up and paid for 100% Green-E certified renewable power?
Yes. Because over time the demand created by people choosing renewable electricity will require more of it.
Watts, volts, and amps can be difficult to comprehend, so let me explain by analogy to something more tangible. Consider a car dealership that carries an inventory of 80 gas guzzling SUVs and 20 hybrids. If 8 out of 10 customers continue to buy the less fuel efficient SUVs, then the dealership will continue to replenish its inventory with 80% gas guzzlers and only 20% hybrids.
Now consider what will happen if 8 out of 10 customers start buying hybrids. The car dealer does not want to lose money. It will start to rebalance its inventory with more of the fuel efficient hybrids and fewer of the gas guzzlers. Which will cause the manufacturers to start producing more hybrids and fewer gas guzzlers.
The same thing can happen with electricity. If enough of us start choosing clean, renewable electricity, then more wind, solar, hydro, and geothermal plants will have to be built to meet the demand.
To help make that happen, we decided to promote the company that provides our home's clean, green electricity supply. We will earn a small referral fee whenever anyone signs up for the service through our web site and, more importantly, we will do our small part to increase the demand for clean and renewable energy.
If you live in New Jersey, Pennsylvania, Connecticut, or Maryland, you can click here to find out how much it will cost (actually, how much you will save) by switching to either 20% or 100% clean, renewable electricity. New Yorkers should be able to take advantage of this in a month or so, with Massachusetts and Illinois not far behind. You can also check with your utility or state regulatory agency to find the names of other third party suppliers.
With a little collective action that costs us nothing, and can actually reduce our electric bills, we can promote a cleaner and greener energy future.
Woodbridge, New Jersey