Half of Dominion’s “green” money program used for administrative costs

Half the money customers pay to participate in Dominion Virginia Power's green power program goes to cover the renewable energy option's administrative costs.

"We do it this way so that the green power program can be 100 percent self-funded," said company spokesman Karl Neddenien.

"It would be unfair for non-green power customers to bear the cost of managing the program," he said.

Purchasing green energy credits -- a voluntary option for subscribers -- adds $15 to the monthly bill of a typical residential customer participating fully in the program, the company said. Dominion subscribers can participate for as little as $2 a month.

The program started Jan. 1. About 3,500 Dominion customers now buy credits to support development of renewable energy sources. The state's largest electric utility, Dominion serves 2.3 million subscribers in Virginia.

"We'd love to encourage our members to buy green power," said Glen Besa with the Sierra Club's Virginia Chapter, "but we're not going to encourage them to participate in Dominion's program with 50 percent going to overhead."

"We're concerned that programs like the one Dominion has," he said, "will undermine public support for renewable energy."

The Sierra Club has about 16,000 members in the state, Besa said.

For every $15 that its participating customers pay into the green power program, Dominion said:

• $7.50 goes to purchase renewable energy certificates.

• $7 is paid to a contractor, San Francisco-based 3Degrees, to run the program.

• 50 cents goes to Dominion for its part in managing the program.

"Dominion does not profit from this program at all," said Liz Thomson, who manages the green power option for the company. "It's strictly a pass-through" of costs.

Renewable energy certificates, also called "green tags," are tradable environmental commodities that represent proof that a megawatt-hour of electricity was generated from an eligible renewable energy resource, according to the Virginia Department of Environmental Quality.

A customer buying the certificates -- "RECs" -- is not purchasing green energy itself, which can be sold separately, but rather the "environmental attributes" of the clean power, the state DEQ said.

"Purchasing RECs or green tags supports the development of renewable energy and is one way to purchase 'green power,'" the state agency said.

Laura Wood Habr, a hospitality industry environmental consultant and owner of an "eco-bistro" in Virginia Beach, has bought into that idea -- and Dominion's green power program.

"I can't afford to put up a windmill or solar panels," she said, "so this was a good solution" to encourage environmentally friendly power development.

Dominion's proportion of administrative costs to green-power purchase costs did not concern her, Habr said.

"When you're trying to get any initiative off the ground, you're going to deal with that a little bit," she said. "The more the demand, the costs start to come down. I'm hoping this will start to follow that same path."

Dominion says its charges for the program are about 20 percent less than the national average.

Appalachian Power Co., which serves about half a million electricity customers in western Virginia, also has a green-pricing option similar to Dominion's.

About 60 of Appalachian's customers participate in the program.

"We hope the numbers improve," said Appalachian spokesman Todd Burns.

Green power options are available to half of American energy users, according to Jeff Swenerton with the Center for Resource Solutions in San Francisco, but only 2 percent subscribe to such programs.

Contact Peter Bacqué at (804) 649-6813 or .