Unfair to customers and not competitive, Canada project proponents against green pricing

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Consumers should not be asked to subsidise fossil fuel while at the same time being encouraged to fork out extra money to receive electricity from renewable energy sources. So argues a Canadian citizens group, Naturally Powerful Pincher Creek (NPPC) in its campaign to gain political support for the manufacture and development of several hundred megawatts of wind power at Pincher Creek in Alberta (Windpower Monthly, March 1997).

"I see the wind industry getting caught up in this green power rate all around the world -- in my view to the detriment of the whole industry. The problem with the green rate is it is unfair to consumers. The conscientious green consumer has to pay a higher price to get clean energy; he's buying clean energy because he's trying to avoid the pollution intensive energy which is highly subsidised," says NPCC organiser Dale Johnson, a prime mover of the Pincher Creek wind proposal by York Windpower of Canada and German wind company Enercon.

Johnson claims the Alberta government and utilities, which support a green power rate, are essentially saying, "If you want clean energy then you can have that too, but you have got to pay more for it because you must pay for it on top of paying for the [coal generated] electricity we're supplying to you that you don't want. I mean, it's terribly unfair. This is not a competitive market mechanism."

Instead of green pricing NPPC proposes a number of alternatives. It suggests aggregating green consumers by having all consumers pay for the expansion of wind power as part of the overall mix of sources. This option is apparently supported by 72% of all Canadians, while only 20% prefer green pricing. Another option is for wind producers to receive the estimated average wholesale rate for electricity in the whole of Alberta, plus the cost of transmission and distribution. "Then wind producers can deliver power for less than most Alberta consumers now pay," says Johnson.

Other NPPC proposals including opening the grid to allow consumers to choose their source of generation; creating niche markets for wind by encouraging industries (and government) to choose green power; giving utilities a tax credit for integrating green power; permitting large consumers to buy wind in "contracts for differences," which can reduce consumer risk; giving a "power pool credit" to wind generators for the cost of externalities; giving a tax credit to wind generators; and laws mandating that 50% of all new generation is from renewable sources or that wind is "provincial fuel of choice," just as coal has until now been the new-fuel choice.

The option preferred by NPPC is mandatory purchase of wind power, where the so-called "extra cost" is absorbed by the entire rate base. Government would accumulate carbon offsets until they become a valuable commodity for trading, which can be credited back to the consumer as a rate reduction.

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