Double-Counting RECs

Today I wrote a guest-post at the Legal Planet blog (a joint UC-Berkeley/UCLA project) about an interesting challenge before the FTC on how Vermont's Green Mountain Power makes renewable energy claims.

When a generator produces renewable electricity, the power company is entitled to a "Renewable Energy Credit" (REC) (typically 1 megawatt hour of renewable electricity equals one 1 REC). RECs represent the electricity's renewable attributes. These RECs can be bundled or unbundled from the associated electricity. If they're bundled (kept together), then the consumer of the electricity also receives the electricity's renewable attributes -- effectively, the customer is getting green power. But the electricity can also be unbundled from the REC, with different consumers receiving each product. In that case, the consumer who receives the electricity is not actually receiving "clean" electricity -- only the recipient of the REC is (basically, the REC recipient is off-setting dirty power she consumes from another provider).

The FTC petition claims that while Green Mountain Power claims to supply renewable energy to its consumers, it actually sells the associated RECs to other entities elsewhere in New England. This is misleading, since once the RECs are unbundled the electricity consumers are not actually receiving renewable power.

I go into some more detail in my guest-post. If you're interested, I encourage you to check it out.