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United States

Participation higher than expected

As many as one-fifth of US electricity customers are actually putting their money where their mouth is and signing up for pilot green pricing schemes, indicates a study funded by 40 major utilities. The 20% sign-up rate, the conclusion of the first wide-ranging study of such pricing schemes, may well have powerful implications for clean power as America's electricity markets are deregulated, starting with California in January.

Faced with a choice, a "significant segment of consumers" will pay as much as one-tenth more for environmentally benign energy, according to the study, carried out by consultants Xenergy of Burlington, Massachusetts and released in the summer. Xenergy surveyed some 25,000 customers in pilot green pricing projects in New England and in the rust belt of Ohio and Illinois. Xenergy bought Kenetech Management Inc, Kenetech's performance contracting arm, and is approved to supply energy efficiency projects to the US Department of Energy.

In a further finding consistent with previous research, the study discovers that a larger share of residential customers than business customers respond well to environmental pitches, regardless of whether the power itself is "green" or whether it is the ideals of the vendor that are portrayed as green. Sceptics of green pricing programmes, where consumers are given the option of electricity from a renewable source if they pay a premium, have said that polls indicating high sign-up rates were overly optimistic. The Xenergy study also suggests that price and "local-ness" -- the loyalty that customers show to a familiar utility -- are still overwhelmingly important to customers.

Others have differing views of how the market may unfold, especially in high-stakes California where $540 million will be disbursed over four years to support green marketers and consumers. Southern California Edison, always more wary of renewables than its neighbour Pacific Gas & Electric, says that it doubts that more than 5% of customers will sign up to buy green power at a premium. In contrast, Pacific Gas & Electric apparently believes the rate could be more than four times that. "We think the percentages of people voting for green energy could go even higher, [than 20%]," Allan Schurr, product general manager for mass markets at PG&E Energy Services, told the Los Angeles Times.

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