Don’t trust Dominion
Virginian-Pilot columnist Mike Gruss recently promoted Dominion’s “green power” program.
Going green by partnering with a utility is leap of faith
By Mike Gruss
Virginian-Pilot
01/30/2010
“With 60 extra dollars, I could buy a few new toys, like an external hard drive or a raincoat or a few new hardcover books.
Or I could use that money to do good by donating to charities in Haiti or tithing to a church or giving to the United Way.
But I’m not.
Instead, I’m giving it to Dominion, an energy company that brought in more than $16 billion in revenue last year, a company that paid its shareholders a hearty 4.6 percent dividend, and a company that collected so much profit from me and other customers that it’s volunteering to put off price hikes for as much as two years.
Yes, I’ve opted to pay more for electricity. Not for more electricity, mind you, just more for the electricity I already use.
“You’re choosing to pay more and get nothing,” spokesman Karl Neddenein said.
Which sounds pretty stupid.
But more than 6,000 Virginia households have made the decision to help pay for renewable energy sources. It’s a classic case of putting our online-bill payments where our mouths are.
Here’s how the plan works:
I pay 1.5 cents more per kilowatt hour to Dominion than I would with my traditional plan. That comes out to about $5 a month.
Dominion uses that money to buy a certain number of megawatt hours of renewable energy each month from windmills or magical fish or some other third-party vendor.
That energy is deposited into an electrical grid that serves most of Virginia. Then, renewable-energy companies get a stream of income that they can use on research and development.
Ideally, genius discoveries are made. We are all winners.
Admittedly, it’s not a great investment. Putting the same $60 in a green mutual fund would net me about 2.3 percent a year.
Am I a sucker?
Depends on your point of view. For me, it’s just part of a deeper buy-in.
If I’m going to fill the recycling bin to the brim, stop using water bottles and wear holes in my canvas grocery bags, I’m willing to pay a few extra bucks for an energy plan that could make a significantly larger difference.
To be clear, Dominion gets nothing from the arrangement except the public-relations line of saying it met its customers’ need.
And to be clear, I get nothing from the arrangement except the environmental piety of knowing I’m contributing a little less to global warming. In essence, the same thing: a PR line.
In February, I’ll get an analysis about what I’ve contributed to the program. Most likely it will say I’ve done the equivalent of keeping one car off the road for six months. I’ll have to trust Dominion.
Which, sadly, is the hardest part of this program.
I’m putting faith in the thought that spending a little money now will save everyone in the long run – the ice caps won’t melt, Norfolk won’t sink under water and global economies won’t change based on temperature adjustments. In short, the world becomes a slightly better place.
Now, the State Corporation Commission in Richmond, which is deciding what to do with Dominion’s “excess profits,” has several choices before it.
In one scenario, customers could get a refund, thought to be about $80 a household. They could use the money to buy a new rain hat, for example, or simply donate the money toward green energy, a chance to literally pay-it-forward.
Trusting a giant company like Dominion is a test of faith, especially in this case where the results aren’t immediately visible.
But trusting that renewable energy is what’s needed for the future is a no-brainer.”
It’s a scam, Mike.
Dominion isn’t using your extra money to “buy a certain number of megawatt hours of renewable energy,” and that energy is not “deposited into the electrical grid that serves most of Virginia.” They are actually buying something called “renewable energy certificates” (basically, pieces of paper) that only signify that renewable energy was produced somewhere else. The energy coming to your home is still mostly generated by dirty coal.
Half the extra money you give Dominion is kept by them for “administration,” and the other half goes to the certificate broker (some unknown fraction of that goes to the actual renewable energy producer).
If you are really in favor of renewable energy, you would be better off donating that $60 to the Virginia League of Conservation Voters, Virginia Sierra Club, or other local environmental group that advocates legislation to force Dominion to actually produce or buy renewable energy instead of just a “PR line.”
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February 2nd, 2010 at 2:55 pm
I think I agree with you again David. My own judgement is that this is a scam, it does not increase the amount of energy that is provided by renewable energy sources.
Better use of the money might be to start up a new savings account and start setting aside money to one day put solar panels up on the roof. Once you have the solar panels, you’ll know where the energy powering your home comes from. Of course you might still have to factor in just where the energy came from to produce the solar panels and just how much harm will be done to environment once the panels malfunction and need to be replaced.
I view this scheme about the same as I view the one where people try to offset their heavy carbon footprint by paying for a credit (promise) that a tree was planted in some far off third world country. No assurance that the tree isn’t just going to wither and die a few months after it was planted; even if it grows to maturity, it is eventually going to die, decompose and release the captured carbon back into the environment.
February 3rd, 2010 at 9:27 am
I happen to read this poste, and I am new to all of this. Is it through an rss and more details? I wish I would learn something here.
March 10th, 2010 at 1:11 pm
So I’m confused by this post. Certificates are how states with mandatory renewable energy portfolios (RPS) track implementation and progress. So are you saying state RPS laws are bogus too? If so why would I donate to groups supporting state RPS laws as you suggest?
Even under an RPS coal is going to be used unless the RPS mandate is set at 100% renewable energy. Under an RPS, more renewables will come online, but you won’t be able to tell who gets the renewable energy and who gets the coal energy. And even those that get the renewable stuff will still get coal energy mixed with it.
The way our power works is that even if some developer built a giant wind farm in your backyard, unless they tie the wind turbine transmision line direclty into your home you cannot say if you are getting renewable electricity from that wind farm. If its tied to the grid then it goes into the grid and mixes with coal, nukes, diesel, etc. Under an RPS all you can say is that somewhere someone is getting that electrcity. The good news is that we all benefit from that renewable generator. Thats all these certificates are trying to do to.
Take a look at some state RPS laws. As long as the certificates come from a certain nearby states then the law is met. You can get certificates from 5 or 6 states away, but as long as those states feed into the same grid then its deemed to work.
If you think these certificates are bogus or worthless then so is all the effort to pass a state or federal RPS.
If you support RPS legislation then it seems you should support these certificates. Just because an RPS is mandated by the government doesnt make it better.
Please reread what you posted “[renewable energy certificates] only signify that renewable energy was produced somewhere else”. Ok, but you are saying that renewable energy was produced I think thats all a certificate program is trying to: encourage and verify more renewable energy. As long as that renewable energy is in the US we all benefit. As long as its on the east coast, mid-atlantic, or south then Virginia is more likely to benefit.
There is more than one way to skin a cat. RPS does it through government. Couldnt it be possible that there is another way outside of our government that can co-exist with an RPS?