DTE’s GreenCurrents Declared “Greenwash”; Alternative Proposed

85% overhead costs, no renewable energy purchases leads customers to demand new option

October 7, 2008

Ann Arbor, MI: The premium that 14,000 residential or business customers in Southeast Michigan who have signed up for DTE Energy’s GreenCurrents program are paying on their monthly electric utility bill buys no renewable energy, according to filings with the Michigan Public Service Commission (MPSC). Moreover, 85% of the program’s costs in its first year went to marketing and administration, promoting DTE’s green credentials through money that could have gone to green power purchases. To remedy these problems and provide a true green energy option, the Ecology Center and City of Ann are teaming up to change the way GreenCurrents operates.

“Detroit Edison’s GreenCurrents program is long on ‘GreenWash’ and short on actually delivering renewable energy,” said David Wright, the Ecology Center’s Clean Energy Program Director and a member of the City of Ann Arbor’s Energy Commission. “Detroit Edison does not purchase any renewable energy for GreenCurrents customers, the program is incredibly expensive, and it is structured so that it will always be expensive. DTE customers and Michigan’s environment and economy deserve better.”

As promoted by DTE Energy, Detroit Edison’s parent company, the GreenCurrents program provides electric customers an opportunity – for a premium – to purchase “blocks of renewable energy” or an option to match 100 percent of their electricity consumption with “renewable resources.” Unfortunately, this is misleading because DTE does not actually purchase any renewable energy for its GreenCurrents customers. Instead, the company purchases renewable energy certificates (RECs).

RECs are tradable environmental commodities which represent proof that 1 megawatt-hour of electricity was generated from an eligible renewable energy resource. In the case of the GreenCurrents program, Edison buys RECs from two wind farms, one near Cadillac and one in the Thumb area, a biofuel (manure into electricity) farm near Lansing, and a landfill generating station near Muskegon. Unfortunately, Detroit Edison does not purchases any actual electricity with the premiums paid by GreenCurrents customers.

“By not directly purchasing any renewable energy, GreenCurrents customers pay the full price for Detroit Edison's existing fossil-fuel and nuclear generation resources and a premium to buy a REC,” states Wright. “This system makes no sense environmentally or economically.”

Detroit Edison spent over 85% of its $1.1 million in program expenses in 2007 on marketing and administration; less than 15% went to purchase the renewable energy certificates. However, GreenCurrents premiums totaled less than $250,000, leaving the utility over $900,000 in unrecoverable expenses for the year. Now, Detroit Edison is asking the MPSC to increase electricity rates on all of its customers by $5 million to cover the 2007 shortfall, as well as future unrecoverable expenses.

“The Ecology Center and City of Ann Arbor proposal fixes these problems with the GreenCurrents program,” says Ecology Center’s Policy Director Mike Shriberg. “Our proposals are based on one of the nation’s most successful utility-sponsored voluntary green power programs, Austin Energy's GreenChoice program.”

Renewable energy does not have significant variable costs like those associated with conventional generating resources, and renewable energy can be purchased for a fixed price over the long term. GreenChoice and other successful voluntary programs pass this long-term fixed price feature to the participating customers, which in some cases has provided green power prices lower than base utility rates. This benefit can only be achieved if the utility makes a renewable energy purchase instead of a REC purchase.

To make GreenCurrents work for its customers, the Ecology Center and the City of Ann Arbor are requesting to the MPSC that Detroit Edison replace their energy charge and the GreenCurrents premium with a renewable energy charge. Under the proposal, Detroit Edison will use the renewable energy charge to enter into long-term fixed-price power purchase agreements with Michigan-based renewable energy developers. These proposed changes to the GreenCurrents program will result in Detroit Edison actually purchasing renewable energy and providing the economic benefit of that purchase to participating customers.

“With the utility purchasing energy, there will be no need for $5 million dollars to market and administer a misleading program,” says Wright. “And customers get the benefit of not only clean energy but also fixed prices over the long-term, thus hedging against future fossil fuel price increases and potentially lowering overall electricity costs.”

The Ecology Center has launched an action page for customers to express their outrage about the GreenCurrents program and ask the MPSC to institute the proposed changes. In addition, renewable energy advocates and supporters of GreenCurrents reform are urged to attend an MPSC consumer forum at Ann Arbor’s Forsythe Middle School on Monday, October 13 at 6pm.

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The Ecology Center is a Michigan-based nonprofit environmental organization that works at the local, state, and national levels for clean production, healthy communities, environmental justice, and a sustainable future.

For press questions, please contact:

Contact: Mike Shriberg, Ecology Center: 734-761-3186 x108