The Bonneville Environmental Foundation

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The Bonneville Environmental Foundation
REC-Based Green Power Programs Options for
Consumer-Owned Utilities

• A 501(c)(3) public benefit organization
• Founded in 1998
• Our dual mission
• Supporting clean, domestic, renewable energy
  development
• Supporting long-term, science-based watershed
  restoration
• Our distinction
• We fund our mission by operating a business --
  the business of selling renewable energy credits
  (Green Tags). The net revenues from the Green
  Tags program makes the foundation almost
  completely self-supporting, from activities that
  themselves support the mission

Prepared forMarkets for Renewable Energy
Credits A National Webinar October 11, 2006
Prepared byTom Starrs Bonneville Environmental
Foundation tomstarrs_at_b-e-f.org 503-248-1905
Sponsored by the National Rural Electric
Cooperative Association, American Public Power
Association, APPAs Demonstration of
Energy-Efficient Developments program, DOEs Wind
Power America and GeoPowering the West programs,
Bonneville Power Administration, Utility Energy
Forum, Geothermal Resources Council, and Western
Area Power Administration
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The Bonneville Environmental Foundation
The Issue

• A 501(c)(3) public benefit organization
• Founded in 1998
• Our dual mission
• Supporting clean, domestic, renewable energy
  development
• Supporting long-term, science-based watershed
  restoration
• Our distinction
• We fund our mission by operating a business --
  the business of selling renewable energy credits
  (Green Tags). The net revenues from the Green
  Tags program makes the foundation almost
  completely self-supporting, from activities that
  themselves support the mission

• Many utilities -- particularly smaller ones --
  lack the resources (human or financial) to
  develop their own green power programs
• Contracting for small amounts of green power can
  be difficult and expensive, and can create
  inventory risk
• Designing and implementing a green power program
  requires dedicated staff resources

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The Bonneville Environmental Foundation
A Solution

• A 501(c)(3) public benefit organization
• Founded in 1998
• Our dual mission
• Supporting clean, domestic, renewable energy
  development
• Supporting long-term, science-based watershed
  restoration
• Our distinction
• We fund our mission by operating a business --
  the business of selling renewable energy credits
  (Green Tags). The net revenues from the Green
  Tags program makes the foundation almost
  completely self-supporting, from activities that
  themselves support the mission

• REC-based green power programs reduce or avoid
  the financial risks of contracting for green
  power
• The utility can contract with a wholesaler to
  purchase RECs independent of energy and power
  needs
• Wholesaler typically will carry some or all of
  the inventory risk
• Some REC marketers can provide program support
  (marketing and sales) along with REC supplies
• Options vary from one marketer to the next
• Small utilities may find it difficult to attract
  the interest of independent marketers because the
  scale is too small to provide much profit
  potential

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The Bonneville Environmental Foundation
Advantages to RECs

• A 501(c)(3) public benefit organization
• Founded in 1998
• Our dual mission
• Supporting clean, domestic, renewable energy
  development
• Supporting long-term, science-based watershed
  restoration
• Our distinction
• We fund our mission by operating a business --
  the business of selling renewable energy credits
  (Green Tags). The net revenues from the Green
  Tags program makes the foundation almost
  completely self-supporting, from activities that
  themselves support the mission

• Utilities can choose the type and location of
  resources they want to support
• Resource mix can be driven by economics,
  location, and/or customer preferences
• Constraining the resource mix will likely
  increase the cost
• Some REC marketers can provide program support
  (marketing and sales) along with REC supplies
• Options vary from one marketer to the next
• Small utilities may find it difficult to attract
  the interest of independent marketers because the
  scale is too small to be profitable

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The Bonneville Environmental Foundation
Supporting Local Projects

• A 501(c)(3) public benefit organization
• Founded in 1998
• Our dual mission
• Supporting clean, domestic, renewable energy
  development
• Supporting long-term, science-based watershed
  restoration
• Our distinction
• We fund our mission by operating a business --
  the business of selling renewable energy credits
  (Green Tags). The net revenues from the Green
  Tags program makes the foundation almost
  completely self-supporting, from activities that
  themselves support the mission

• REC-based programs are efficient and economical,
  but dont necessarily support local projects
• Local renewable projects may be scarce, or may
  have their RECs already committed to other
  marketers
• Most REC marketers dont have the capacity to
  support project development, even if the scale of
  the program can support local projects
• BEFs model emphasizes local project investment
• BEFs mission includes supporting renewable
  energy education, which is best done with local
  projects that are tangible to customers
• BEF has the capacity to deliver turnkey
  small-scale projects that maximize public
  visibility and educational value

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The Bonneville Environmental Foundation
Some of BEFs Local Projects

• A 501(c)(3) public benefit organization
• Founded in 1998
• Our dual mission
• Supporting clean, domestic, renewable energy
  development
• Supporting long-term, science-based watershed
  restoration
• Our distinction
• We fund our mission by operating a business --
  the business of selling renewable energy credits
  (Green Tags). The net revenues from the Green
  Tags program makes the foundation almost
  completely self-supporting, from activities that
  themselves support the mission

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The Bonneville Environmental Foundation
BEFs Utility Programs

• A 501(c)(3) public benefit organization
• Founded in 1998
• Our dual mission
• Supporting clean, domestic, renewable energy
  development
• Supporting long-term, science-based watershed
  restoration
• Our distinction
• We fund our mission by operating a business --
  the business of selling renewable energy credits
  (Green Tags). The net revenues from the Green
  Tags program makes the foundation almost
  completely self-supporting, from activities that
  themselves support the mission

• Presentation that follows describes BEFs Green
  Power Program in a Box
• Designed to enable low-cost, cookie-cutter
  program design and implementation
• Was rolled out last year in the Pacific Northwest
• Currently being considered by three utilities in
  the Pacific Northwest and one in the Southwest
• Program follows models already implemented by BEF
• City of Ashland, OR (Muni) BEF administers
  program
• Snohomish, WA (PUD) Utility administers
  program, BEF supplies RECs and supports marketing
  efforts
• Both include reinvestment in local projects

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Providing a Green Power ChoiceA simple and
meaningful approach for electric utilities
Note Following Slides Are Part of Separate
Presentation
October 2006
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Overview

• About BEF
• Why offer Green Power
• Why partner with BEF
• Selecting a green power program model
• Two Basic Options
• Detailed look at the differences
• Pros and Cons
• What it takes a commitment to success
• What it returns benefits to you and the community

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About BEF

• Founded in 1998, Bonneville Environmental
  Foundation (BEF) is a non-profit marketer of
  green power products.
• BEF provides grant funds and invests in renewable
  energy and watershed restoration projects.
• BEF also provides communities with renewable
  energy installation management services. These
  services may be in conjunction with or
  independent of a communitys green power program.
  

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Why Provide a Green Power Choice?

• Impacts of electricity sources on health,
  environment, security, and economy.
• Customers feel good about their choices, and what
  their utility is doing.
• By participating as a community, individual
  actions can be a part of something more.
• More clean energy on the grid, without utility
  having to raise rates or swallow costs.

Definition By Green Power we mean electricity
generated by clean, renewable sources such as
wind, solar, low-impact hydro, and biomass.
(Natural Gas and Nuclear NOT included.)
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Why Partner with BEF?

• BEFs Green Tags highest quality renewable
  energy product.
• Reputation and experience.
• Program simplicity
• No changes to wholesale electricity purchasing
• Simple, incremental transactions for Green Tags
• BEF provides basic program tools
• Risk free No financial commitments or purchase
  minimums.
• Community connections BEF provides development
  support and management of local renewable energy
  installations.

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What the Heck are Green Tags?

• When electricity is produced, a certificate
  describes its attributes. Renewable Energy
  Certificates (RECs) are tradable commodities
  (either with or separate from energy).
• Green Tags are BEFs REC product.
• Green Tags include a blend of mostly wind and
  solar sources from the West and Midwest.
• One Green Tag represents the environmental
  benefits of 1 MWh of renewable energy.
• For every Green Tag purchased, the equivalent
  amount of polluting conventional electricity is
  displaced from the grid.

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Two Basic Program Models

• Option A BEF Green Tag Model
• Renewable Pioneers Program
• Utility supports program primarily by
  communicating availability to customers.
• Option B Utility Ownership Model
• Green Power Partners Program
• Utility markets and bills customers, then
  purchases matching quantity of Green Tags from
  BEF.

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Option A Up Close

• Utility informs customers of program.
• BEF provides marketing support materials.
• Customers purchase Green Tags directly from BEF
  (via website, phone, or mail).
• BEF will provide a webpage for utility programs
  (with your logo, etc).
• Customers can make one-time purchase, or sign up
  for annual renewal. Payments can be made in full
  or monthly.
• Cost to customers 20 per Green Tag (.02/kWh).
• Utility company is not required to make any Green
  Tag purchases.

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Option B Up Close

• BEF provides marketing support materials.
• Utility develops program specifics-
• Increments offered ( blocks and/or 100 of kWh
  use).
• Billing frequency.
• Price margin on Green Tags.
• Utility promotes and offers green power to their
  customers.
• Customers purchase green power as a line item on
  their electric bill.
• Utility purchases Green Tags from BEF annually or
  biannually to match 100 of customers demand.

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Weighing the Options
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What it Will Take to Succeed

• Regardless of the model, utility must commit to
  success!
• Program support
• Promotion to residents, businesses, and community
  organizations
• 2 bill stuffers per year
• Outreach through community involvement
• Communication with BEF
• Brochures, press releases, etc. (with BEF
  support)
• Commit staff and resources to program success.
• Commitment to the above and to BEFs product for
  two year minimum.

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What You Will Get in Return

• BEFs outreach and PR experience showcasing your
  utility program and community.
• Customer appreciation.
• Raised awareness and understanding of energy
  choices.
• Opportunities to work with BEF on local renewable
  energy installation projects
• continuing the cycle of supply, demand, and
  awareness about clean energy!

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Getting Started!

• Determine which model works for you.
• Determine what staff member(s) will take the
  lead.
• Get excited about an outreach plan, finalizing
  materials, and launching!
• BEF is here to help!

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Contact

• Bonneville Environmental Foundation
• 503-248-1905
• www.b-e-f.org
• www.greentagsusa.org