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Green power purchase brings many buyers, sellers together

Buying in bulk, a favorite strategy of many businesses and large families, saved several Federal agencies money on the purchase of renewable energy certificates, and it provided a market for green power providers scattered around Western's territory.

Rocky Mountain Regional Energy Services Representative Peggy Plate organized the purchase of 117,000 MWh for five years for six DOE labs, three other DOE organizations and an Army installation. Western will receive 15,000 MWh of the RECs, enough to cover the needs of 15 Western facilities. "It's a good way to lead by example," she said. "It's part of our stewardship role, to find ways to reduce pollution."

RECs bridge miles between source, user

The other agencies participating in the purchase include:

• Department of Energy's Berkeley Laboratory, Lawrence Livermore Laboratory and Stanford Linear Acceleratory Center
• DOE's Pantex Plant in Amarillo, Texas
• DOE's Kansas City Plant
• DOE's Sandia National Laboratories, New Mexico
• DOE's Los Alamos National Laboratory, New Mexico
• Fort Carson, Colo.
• DOE's Golden Field Office and Central Regional Office
• DOE's National Renewable Energy Laboratory

The Federal Energy Management Program funded the development of the request for proposals, interagency agreement and marketing materials. FEMP representatives also worked with Western to promote the project to other Federal agencies, Plate recalled. "Getting the signed interagency agreement was a team effort," she said.

David McAndrew, FEMP renewable power purchasing team lead and Chandra Shah, senior project leader with NREL FEMP, brought several DOE sites into the purchase. Plate worked with facilities in Western's Rocky Mountain region and Energy Services Manager Paula Fronk of the CRSP Management Center added the agencies in New Mexico to the agreement.

RECs proved to be the most cost-effective product for meeting the needs of requesters located in five different states. Even though some of the generation sources are located on Western's transmission system, "None of the requesters were close to the sources," explained Plate. "The power would need to be delivered over more than one transmission system, so the transmission service fees would have driven up the cost of the electricity."

Utility reaches market through broker

Sterling Planet, Inc., a third-party green power marketer, is supplying all the certificates from a mix of biomass and wind generation. Sierra Pacific Industries' sawmill sites in Anderson, Lincoln and Sonora, Calif., are supplying electricity from wood chips. The wind RECs are being generated by Mountain View wind site in Palm Springs, Calif., and the new Ainsworth Wind Farm in western Nebraska.

Nebraska Public Power District built Ainsworth in response to a customer poll that showed ratepayers favored NPPD developing more wind power, but didn't want to buy it as a separate product. "Selling the environmental attributes helps NPPD pay for the costs of the facility," explained Doug Mollet, NPPD water systems and renewable energy manager.

Using a third-party broker is a good way for a smaller utility like NPPD to sell green tags for several reasons, he added. The renewable energy market is still new and evolving quickly. "We just don't have enough staff to follow it full time," Mollet said. "A 60-MW output is significant to our customers, but it doesn't justify a dedicated marketing person."

Selling RECs also allows NPPD to take advantage of the global nature of renewable energy. "The environmental benefits of renewable energy are not bound by sticks and wires and state lines, like the generation itself," he noted. "Somebody like [country singer] Garth Brooks can support renewable energy by buying enough green tags to cover the electricity needs of a concert. I can't seek out that kind of buyer, but a marketer can."

For those reasons, Mollet anticipates that NPPD will continue to use marketers, and he urges other small utilities with renewable energy projects to consider that option. "It costs a few dollars—think of it as a finder's fee—but it saves staff hours and gives a utility access to markets it wouldn't have otherwise."

Renewable energy developers should look at a green tag marketer's customer base and whether or not the company is an aggregator, Mollet advised. "It's rare to find one customer that can buy your entire output," he said. "If you had a million dollars, you wouldn't want to put it all in one bank."

Western helps Federal agencies meet goals

Aggregation is good for both buyers and sellers, agreed Plate. "Because of the competitive price, we were able to get enough certificates to cover 15 Western's facilities this time," she said. "This REC buy helped DOE meet its renewable energy directive to purchase 3 percent non-hydro renewable energy by 2005 and 7.5 percent by 2010."

When many agencies come together to make large purchases like the one Western coordinated, it stimulates the market for renewable energy certificates. "That helps lower the prices on new technology being developed, so they are cheaper and more readily available to everyone," Plate said.

Federal agencies are the largest buyers of RECs in the United States, and Western has been recognized for its role in green power purchases for Federal customers. "Our program makes it easy and cost effective for Federal agencies to support renewable energy," said Theresa Williams, Western's Renewable Resources for Federal Agencies project manager. "By working with our customers and looking at renewable energy, we can all reach our goals."

To learn more about how Western can help your agency "green" its operations, visit Western's Renewable Resources Web site.