After the letter below was published I realized that I had made a mistake in my calculation. The version below has been corrected, but I leave (in red) the original text so readers will see where this version changed. 2004-10-07 JHS
Last week’s Oberlin News-Tribune editorial applauded the agreement that will sell all of the City of Oberlin’s green energy to Oberlin College. I write to offer a different perspective on this, one that I believe all OMPL customers should consider.
In addition to having our own town power plant, Oberlin Municipal Power and Light (OMPL) is a part owner (through AMP-Ohio) of other power generating facilities around the state. These include coal plants, a hydroelectric dam, and now the wind turbines located in Bowling Green. Roughly 17% of the power-generating facilities that we own generate green power (dams, wind, etc.). The energy produced by these plants is more expensive than that produced by the usual, dirty coal plants. The additional cost varies, but, on average, OMPL customers play about 7/10 of a cent (originally I wrote 1 cent) more per kWh for this electricity in order to support these green power-generating facilities.
Many Obies, including those who manage OMPL, believe then that 17% of their electric energy is green. This is false. Every kWh of energy sold to OMPL customers at this point in time is as dirty as the coal that generates 89% of Ohio’s electric energy. The reason for this is that OMPL has sold off the “green tags” for its 17% green energy to a company called Green Mountain Energy. For 0.2 cents per kWh -- just 30% (originally I wrote 20%) of what it really costs us -- we have sold off the legal right to the energy green to someone else. Green Mountain Energy then sells electric power generated from its dirty plants combined with our green tags to their customers and calls the energy green! Customers around the country who are obligated by law to buy some amount of green energy use this kind of scheme to satisfy the requirement. This scheme allows, for instance, investor-owned utilities that would otherwise be forced to pay the full cost of acquiring green power generation to satisfy their legal requirements by only paying a fraction of the true cost of green energy. And, like it or not, this leaves our power 100% dirty! Like Esau in the Biblical story, we have sold off our birth right for nothing more than a bowl of pottage. OMPL customers pay the full cost to support green energy generation but let the green value slip away for 30 cents (originally I wrote 20 cents) on the dollar.
What the new agreement with Oberlin College means is that no longer will Green Mountain Energy purchase these tags – they will be purchased by Oberlin College. This is an important move, because Oberlin College will be spending $27,000 that it did not have to pay for these green tags. And, it is a good deal for Oberlin College because it buys the green label for just 30% (originally I wrote 20%) of the true cost of the green energy. And it is marginally better for the world, because now Green Mountain Energy has to find a replacement for these green tags – and presumably this will eventually result in the production of more green energy. But it is cost-neutral for the City because no new revenue is generated (Green Mountain was paying the $27,000 before) – though it does mean that someone local is getting the benefit.
I strongly support green energy and am willing to pay more to support it. But I am offended that I pay 70% (originally I wrote 80%) of the cost of green energy while someone like Green Mountain Energy or Oberlin College reaps all the benefits! I would be willing to pay the 0.2 cents/kWh more myself to actually receive the green energy that I subsidize. Why should OMPL customers pay most of the costs so that someone else can enjoy the benefits? The bottom line is this. OMPL customers are paying about $85,000 (originally I wrote $135,000) extra for the 12,900 MWh (originally I wrote 13,200 MWh) of the green electricity that we are getting yet we are selling the entire green value of this to someone else for a measly $25,700 (originally I wrote $27,000). Now the person benefiting will be one OMPL customer.
So, this agreement with the College is marginally better for the City in that one OMPL customer will receive the green benefit of its green investments. But I think this scheme is inherently flawed, and all of the OMPL customers who pay for the generation of green energy should receive the green benefits. I would urge the City Council and our Utility Commission to rethink this policy and stop selling green tags.
And while I applaud Oberlin College for this modest move towards green energy, I urge the College to go all the way and pay the full cost of the green energy, not just purchase the subsidized tags.