Background

Green pricing/marketing programs allow electricity customers to voluntarily pay the additional costs for renewable energy through direct payments on their monthly bills. In return, the electricity provider guarantees that it will provide either directly or by contract that amount of renewable-based electricity.

The Energy Information Administration (EIA) collects information about green pricing programs on the Form EIA-861, “Annual Electric Power Industry Report,” which is a survey of electric industry participants.[1] All respondents, except independent power producers and qualifying facilities, are asked to report their number of customers in green pricing programs by state and customer class.

Net metering programs usually permit customers - typically residential - operating very small generators for some of their needs to purchase extra electricity when needed and to sell back any excess power to the utility if available. Provisions vary by state and utility and often apply to solar or wind energy. In addition, pricing schemes vary by individual utility and customer circumstance. This system facilitates the ease of operating intermittent generators, such as those using solar and wind energy, and improves their economics. The EIA collects information on net metering on the Form EIA-861 in much the same manner as it does green pricing.

2007 Year in Review

Green Pricing Programs

After a dismal year in 2006 when the number of green pricing customers fell by almost 300,000, the market for green pricing customers rebounded across the nation in 2007 (Table 5.1 and Figure 5.1). The number of customers in green pricing programs increased by 192,795 to 835,651 in 2007. Texas led this increase with 41,384 new customers, which brought its total to 142,334 or 17 percent of the market. Oregon and Maryland followed with 19,862 and 18,906 new customers respectively. By year’s end, 537 electric industry participants in 46 states and the District of Columbia reported having green pricing customers. Ninety-three percent of the customers were residential.

The two states with the most customers, Texas and Oregon, accounted for 29 percent of green pricing customers nationwide. Of all the states with a sizeable number of green pricing customers, only New York and North Dakota experienced any significant decline in number of customers.

Figure 5.1 U.S. Green Pricing Customers, 2003-2007

Source: Energy Information Administration, Form EIA-861, “Annual Electric Power Industry Report.” Chart data.

Net Metering Programs

Although the number of customers in net metering programs remains a tiny share of total customers, growth has been rapid (Figure 5.2). The total number of customers in net metering programs increased by 45 percent to 48,820 in 2007 (Table 5.2). California, already the largest source of net metering customers with 72 percent of the national total, had the largest increase of 8,779 customers, while New Jersey increased by 1,223 customers. California and New Jersey’s success in 2007 was due in some measure to their support of solar energy development, which included the promotion of favorable rebate programs and other incentives.

In 2007, 288 electric industry participants in 47 states and the District of Columbia reported having green pricing customers. Ninety-two percent of the customers were residential.

Figure 5.2 U.S. Net Metering Customers, 2003-2007

Source: Energy Information Administration, Form EIA-861, “Annual Electric Power Industry Report.” Chart data.

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