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Silicon Valley Power’s renewable energy option takes off

Santa Clara Green Power, Silicon Valley Power’s voluntary renewable energy program seems poised to earn Rookie of the Year status.

In the seven months since the Santa Clara, Calif., municipal utility launched its offering, 2.3 percent of its customer base, or 1,124 subscribers have signed up. Considering that the national average participation in voluntary green tariffs is 1.2 percent, that’s an excellent start. But it is only a start, according to Public Benefits Coordinator Joyce Kinnear. “We think we have a good shot at reaching the goal of 5 percent participation by the first anniversary,” she said.

One reason for Kinnear’s optimism is that the green power option was the customers’ idea. “People were approaching our representatives at events and calling our conservation hotline to ask if they could buy renewable energy,” she recalled.

Annual customer surveys indicated even greater interest. “Somewhere between 70 and 80 percent of the customers responded favorably when asked if they thought SVP should offer some kind of green option,” said Kinnear.

Consultant brings experience to program design
As any marketing professional will admit, however, there is a big gap between interest and action. To improve its chances for success, SVP enlisted the aid of an experienced partner. California-based 3 Phases Energy developed an offering for the City of Palo Alto Utilities that ranked on the National Renewable Energy Laboratory’s list of top utility green pricing programs two years in a row.

“The company has good experience in developing and marketing renewable energy credit green rate programs with municipal utilities and our type of customers,” Kinnear explained.

The renewable energy service provider developed pricing and marketing for Santa Clara Green Power, and negotiated renewable energy certificate purchases. The result was a resource mix of 97.5 percent wind power and 2.5 percent solar power from developments in southern and northern California. Participants pay a premium of 1.5 cents per kWh for those resources, about $7 more per month for the average household’s electric bill.

The marketing strategy SVP uses include tools familiar to every utility. In November 2004, April 2005 and June 2005, SVP used bill inserts to promote Santa Clara Green Power. In December, a “bill coupon” was printed directly on the customers’ statement to save paper.

SVP and 3 Phases representatives bring information about the program to community events like street fairs and Christmas tree lightings. Other subscribers have enrolled at the utility’s customer service window or on its Web site. “About 10 percent of our subscribers have signed up online,” Kinnear noted.

Company policies encourage green power purchases
Commercial accounts are playing a small but important role in Santa Clara Green Power’s success. So far, 41 businesses have purchased renewable energy blocks. The program’s two largest subscribers, Santa Clara University and Agilent Technologies, each committed to purchase 1,608 MWh annually. That qualifies them for “Half-turbine Partner” status, so called because the power block equals half the annual output of a large-scale wind turbine.

Agilent is an EPA Green Power Partner and supports renewable energy at two San Francisco Bay Area facilities. Also a Green Power Partner, Santa Clara University supports renewable energy as part of its mission of community service and leadership.

Because of their strong sustainability policies, both organizations were able to sign up for the program as soon as SVP launched it, said Kinnear. “We hope their commitment will be a catalyst for other organizations in our community to join Santa Clara Green Power.”

She added that smaller companies, like many residential consumers, have to figure out their budgets before they can make the commitment. That segment of the market has responded well to the bill inserts, Kinnear said.

Commitment paves way for success
Expecting the demand for certified green power to continue, SVP recently signed a contract with Oregon-based PPM Energy to add up to 75 MW of wind power for the next 20 years, beginning January 2006.

The Neighborhood Solar Program launched in 2002 promotes additional solar development. Business and residential customers can voluntarily contribute funding to photovoltaic installations on public buildings. Last October, SVP dedicated the program’s first completed project, a 4.6-kW solar array on Santa Clara ’s Haman Elementary School. The Valley Village Retirement Community has been chosen as the site of the next installation.

The recent projects and purchases are only the latest examples of a long-term commitment to green power. Even before SVP offered a green option, 24 percent of its power (in 2004) came from eligible renewable resources including geothermal, biomass and small hydro plants. Also, a large hydropower allocation from Western accounts for more than 40 percent of the utility’s mix.

That may be the most important factor in the seemingly rapid growth of a new renewable energy option. Silicon Valley Power has been preparing for years to make Santa Clara Green Power an overnight success.