Kermit the Frog was known for saying that it is not easy being green. What is true for frogs may not be true for electric utility companies, however. That is what utility companies are learning in California and Pennsylvania. Will more states follow suit? Probably, yes.

California was the first state to open up the electric supply business to free competition. On March 31, that State allowed consumers to decide for themselves which utility company they wanted to do business with. A far cry from the traditional monopoly system still enjoyed by the vast majority of utility suppliers throughout the United States. Last month, Pennsylvania opened up its electric supplier market to free competition as well.

In both states, consumers have frequently picked companies that supply "green" electric. These green suppliers provide electricity produced using environmentally friendly methods, such as windmills, solar energy, and even the combustion of animal waste.

A study released in the December 22, 1997 edition of Power Market Week indicated that consumers are prone to say, when asked, that they will purchase green power when it is available to them. This is so even when the green electric cost more money to purchase than does conventional energy. 60% of the responders stated they would purchase a more costly electric service, if that service was better for the environment.

Of course, people may be more inclined to provide green responses than they are to actually purchase more costly green electricity. And for those who have signed up for the environmentally friendly juice, the question remains whether they will remain faithful to the green suppliers over the long term.

One company providing electric energy to both the California and Pennsylvania markets is Green Mountain Energy Resources located in South Burlington, Vermont. That company offers consumers a variety of blends, a blend being a mixture of conventionally generated electric and green electric. The greater the amount of green electric in a blend, the more costly the blend becomes. According to the company, over 3/4 of its customers are picking more costly blends, containing higher percentages of green electric.

Actually, those who purchase green electric are actually receiving the same electricity that their neighbors and everyone else is receiving. The reason for this is that no new company is able to deliver electricity directly from the generation facility to a customer's home. Instead, every producer contributes to a common pool. A green electric purchaser is actually purchasing a pledge from a generator that its product is more green than conventional electricity.

Since green electric is selling, many companies are entering the market. Even traditional producers are entering the marketplace with green alternatives. With such an appealing green market, the real risk is that counterfeit green producers will emerge. One possible safeguard comes from nonprofit companies, such as San Francisco's Center for Resource Solutions. That company will provide truly green suppliers with a "Green-e" certification. Companies awarded this certification must meet rigid standards and consent to annual facility audits.

Certain high profile customers have recently announced their willingness to purchase green energy. In April 1998 Toyota Motor Sales became the single largest consumer to have agreed to purchase 100% green electric, for use at a California facility. And in September, 1998 it was reported that J.C. Penny retained a consultant to reduce energy use at five stores in the Dallas-Fort Worth areas. Not only do companies making these green decisions benefit the environment, they also benefit their own bottom line because these decisions tend to be favorably received by the public.

Traditional electric generation represents a substantial source of air pollution in the United States. Many electric generation plants require the burning of ozone depleting fossil fuels. Others rely on nuclear energy, an energy source plagued with its own problems.

On the other hand, common sources of green electric are windmill farms and solar energy. These are generally referred to as " renewable" energy sources. One pig farmer named David Sharp has even offered to sell pounds of pig manure, for its methane generation ability. In turn, the methane can be used to generate electricity.

Thus far, only California and Pennsylvania offer consumers the ability to choose from competing providers. However, there appears to be a deregulation climate that is spreading throughout the United States. For this reason, it is very possible that more states will soon be following suit.

Published: October 7, 1998

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