This document discusses green tariffs from the perspective of customers. It provides information on why customers participate in green tariffs, how green tariffs have grown, and key considerations for effective program design. Some of the main reasons customers are interested in green tariffs are to meet renewable energy and emissions reduction goals, procure clean energy at scale, and gain price stability benefits. The document outlines challenges some programs have faced in attracting customers and notes that incorporating customer needs into program design and regular engagement are important for success.

1. Lori Bird, World Resources Institute
EUCI Green Tariffs Conference, Denver, September 13, 2019
CUSTOMER PERSPECTIVE
ON GREEN TARIFFS

2. CUSTOMER DRIVERS FOR RENEWABLES
Why do customers participate in green tariffs?
• Meet GHG reduction goals
• Meet renewable energy goals
• Procure clean energy for facilities at scale
• Potentially save on energy costs
• Obtain fuel price stability benefits
• Drive new and local renewable energy projects
• Community benefits: reduced pollution, health
benefits, water savings, fuel security

3. WHY DID GREEN TARIFFS EMERGE?
• First programs initiated in 2013
• Customers wanted greater share of benefits
from renewables
– Fuel price stability
– Access to large volume of renewables
– Cost savings
• Customers interested in large purchases
– Large scale purchases should yield savings
• Green tariffs have grown steadily over time;
many programs expanded capacity as well
https://www.wri.org/publication/emerging-green-tariffs-us-regulated-electricity-markets

4. GROWTH IN GREEN TARIFF PROCUREMENT
Source: WRI and REBA
~2.5 GW of green tariff transactions contracted

5. UTILITY GREEN TARIFFS EXPANDING
Source: WRI and REBA
• 30 utilities offer programs in 18 states
• 7 new programs
• Several other programs under
development
New Green Tariff Programs
Green tariff(s) utilized Green tariff(s) but no deal(s) Considering green tariff
One-on-one RE deal(s) Electricity retail choice No directaccess to RE
LEGEND
Georgia Georgia
Power
Customer Renewable Supply
Procurement
Approved
Kentucky LG&E Schedule 69 Approved
Michigan DTE Large Customer Voluntary
Green Pricing Program
(LCVGP), Rider 19
Approved
Missouri KCP&L-
MO, GMO
Renewable Energy Rider,
Schedule RER (40, 139)
Approved
South
Carolina
Duke
Energy
Green Source Advantage,
Rider GSA
Proposal at
PUC
Virginia Dominion
Power
Rate Schedule MBR, Large
General Service
Proposal at
PUC
Wisconsin We
Energies
Dedicated Renewable Energy
Resource Pilot
Approved

6. CUSTOMER INTERESTS AND NEEDS
Large customers typically want:
• Cost savings from renewables over time
• Large volume of energy
• New renewable energy projects
• Cost certainty/fixed costs of renewables
(e.g., no fuel cost variability)
• Moderate term contracts
• Contracting flexibility
• Local renewable energy projects
https://www.wri.org/publication/implementation-guide-green-tariffs

7. CITIES VS. CORPORATE NEEDS/ISSUES
Cities
• Often focused on existing loads
• Concern over costs; budget
limitations and impacts of any rate
increases on the community
• Want local renewables in
community
• Want new renewables
• Limitations in contracting ability
challenges and procurement
practices
Corporations
• Often can enroll new loads (e.g.,
new data center)
• Want cost savings over time
• Need large volume of energy
• Want new renewables
• Difficulty in long term contracting
• May not own facilities

8. CUSTOMER CHALLENGES
• Customer eligibility limitations
• Price premium and overall lack of savings in
some cases; uncertainty of cost savings
• Limited supply of renewables (e.g. program
caps or limited RE capacity available)
• Limited timeframe to enroll
• Challenge in understanding the impact of
the tariff on customer costs
• Contractual provisions
• Penalties, limitations on account
transferability
• Changing loads over time

9. KEY STICKING POINTS: WHY HAVEN’T CUSTOMERS
ENROLLED IN SOME PROGRAMS
Reason for lack of subscription
• High premium, or unattractive package
offer to balance premium; no cost savings
• Lack of fixed price benefit
• Limited enrollment or challenging
enrollment process
• Doesn’t meet the needs of diverse set of
customers
• Program design does not meet customer
goals / preferences
• Limited set of customers provided input
on tariff
• High application costs
Several programs have not been
utilized by customers to date
Green tariff(s) utilized Green tariff(s) but no deal(s) Considering green tariff
One-on-one RE deal(s) Electricity retail choice No directaccess to RE
LEGEND

10. WHAT ARE COMMON COMMISSION CONCERNS?
Commission Concerns
• Cost shifting to other customers
• Stranded assets
• Uncertainty about whether there
is “public benefit” / impact to
others
• Regulatory restrictions (e.g.
definitions of voluntary
renewable energy programs)
• Unreasonable costs / not
prudent
Several programs have not been
approved by commissions

11. CITY PARTICIPATION IN GREEN TARIFFS
Key elements that enabled the
purchase:
• Fuel cost savings
• New renewables
Bellevue Washington – Puget Sound Green Direct
The city of Bellevue entered into Puget Sound Energy’s Green Direct
program (Schedule No. 139) under a 20-year contract to supply 70 percent of
the city’s municipal load with new wind and solar. Starting in 2019, the city’s
Fire, Parks, and Finance and Asset Management departments plan to
purchase 10.3 million kilowatt-hours (kWh) of renewable energy through the
program, while the city’s Utility Department agreed to purchase 3.2 million
kWh starting in 2021. With a fixed energy charge and credit structure, the city
anticipates paying a premium for the first 10 years of participation and then to
break even, followed by savings in future years. The city will use savings from
a municipal energy conservation program to pay for the initial premium (City
of Bellevue 2019).
Other local government purchasers: Anacortes, Bellingham, Issaquah,
Kirkland, Lacey, Langley, Mercer Island, Olympia, Snoqualmie, & Tumwater

12. CITY PARTICIPATION IN GREEN TARIFFS (2)
Key elements that enabled the
purchase:
• Volume of renewables
• Ability to offset the premium
with other programs
Minneapolis, MN and Xcel Renewable Connect
In 2017, it joined Xcel Energy’s Renewable*Connect program under a
10-year contract that allows the city to source 17.8 million kWh from a blend
of local solar and wind resources to match system average on- and off-peak
demand. Although the program has a ~$0.008/kWh premium over standard
retail electricity rates, the city increased its Community Solar Garden
subscriptions, reaping cost savings that ultimately offset the cost of
participating in Renewable*Connect. The RECs stay with the utility, so they
do not count toward the city’s goal. But the contract structure allows the city
to save money from the outset and potentially more over time.
Xcel Energy has requested that the Minnesota Public Utilities Commission
allow the city to obtain an additional 50 million kWh each year through the
program under a five-year contract. That change would directly tie 70 percent
of the city’s electricity consumption to renewable energy sources. (City of
Minneapolis, 2017a, 2017b; Rotatori and Bonugli 2018)

13. KEY PROVISIONS FOR CUSTOMERS
• Program Size / Period of Availability –
the program may be limited in MWs;
enrollment period is typically limited
• Customer Cost Structure – depending on
the structure, customers may receive a
credit that keep costs around the same or
potentially lower than their standard fuel
cost
• Renewable Capacity Limits – RE
resources often limited in size; location and
whether from new or existing resources are
concern
Examples of Program Size /
Period of Availability
• MI, Consumers: Enrollment is open for 3
years on a first come, first serve basis
• VA, Schedule RG: Capped at 50
customers
• WI, WeEnergies: 150 MW for existing
customers

14. KEY PROVISIONS FOR CUSTOMERS
• Customer Eligibility Limitations – limits
on the total amount of renewable energy
customers can procure
• Aggregation of Customer Facility
Demand – customers may be permitted
to aggregate accounts to reach minimum
thresholds for participation
• Resource Selection – customers may
provide input into which renewables are
procured or be able to review
Customer Limitations / Eligibility
CO, Renewable*Connect:At the time of the
customer’s initial subscription, renewal, or
transfer, the maximum participationlevel is
the lower of:
• 100% of their previous year’s usage; or
• 10% of the total capacity of
Renewable*Connect.

15. KEY PROVISIONS FOR CUSTOMERS
• Contract Length Commitment – some
programs may offer several contract
lengths (e.g. month-to-month to 30-year
contracts), with the price varying with
each
• Termination Fees – customers may be
charged for withdrawing before contracted
time
• ResourceAdditions – if new resources
are procured for capacity additions,
adjustments may affect the energy charge
Contract Length Commitment
CO, Renewable*Connect:
Charge
• Month-to-month contract = $0.0440
• 5-year term = $0.04157 (rounding to $0.042)
• 10-year term = $0.04077 (rounding to
$0.041)
MN, Renewable*Connect:
Resource costs:
• Month-to-month & single event = based on a
10 year partially levelized cost for the
resources
• 5- & 10-year contract: based on wind and
solar PPAs or the actual delivered costs

16. KEY PROVISIONS FOR CUSTOMERS
• Administrative Costs – fees for
managing the program may vary
depending on the number of accounts
utilizing the program, size of resource
subscribed
• REC Management Fees – in the instance
the utility is not responsible for the RECs
(e.g. with market-based rate models)
there may be costs associated with the
management or retiring of RECs
Administrative Costs
GA, C&I REDI:
Initial fee: $0.00005 per kWh applied over
contract term
Ongoing:
• Subscription level 50 MW or less: $0.001
per kWh
• Subscription level 50 MW or greater:
$0.0005 per kWh
VA, Schedule RG: $2,000 application
fee

17. WHAT MAKES FOR EFFECTIVE PROGRAM DESIGN?
• Sufficient supply of renewables to meet
customer demand
• Fair pricing
• Benefits shared with customers
• New, local renewables
• Equitable enrollment process (e.g.,
customers have sufficient opportunity
to enroll)
• Reasonable contract length
• Fair tariff terms
• Transparent program

18. ENGAGING CUSTOMERS IN GREEN TARIFF DESIGN
• Obtain input from range of interested
customers
• Seek input from municipalities and
corporates
• Understand which terms are deal breakers
• Address provisions that prohibit cities or
certain types of customers from participating
• Form partnerships early on in the process
• Regular engagement

19. • Green tariffs have been a useful mechanism to expand customer
access to renewables in regulated markets
• Incorporating customer needs in the design of programs is essential
• Providing customers with the inherent benefits of renewables is
important
• Consider ways to meet customer demand
• Manage enrollment processes to enable equitable participation
• Regular engagement with customers
CONCLUSIONS

20. THANK YOU