Pulling Pennies from the Airtesttest
In wind power, the money is in the marketing.
We learned as much long ago from the experiment of William Wrigley Jr., the millionaire whose success you’ve no doubt chewed on more than once. The maker of Juicy Fruit and Doublemint gum, among other chewables, kept a weather eye on opportunity.
How he put chewing gum in vending machines at about the turn of the 20th century is a milestone of entrepreneurial capitalism.
Gum sans machine was already sold in New York. Would vending machines sell in Chicago, Wrigley’s adopted town? He put the idea to the test by setting up a vending machine on Michigan Avenue. It said: Put in a penny and hear the wind.
When the machine filled with pennies, Wrigley shrewdly calculated that if a machine could sell wind, it could sell anything.
The story may or may not be true, but the gum-maker’s experiment was a forerunner of the entrepreneurial energy starting to lift wind markets — and offering appealing, cost-saving options.
Yes, you can save money by powering your home with wind, and Bay Weekly may be the first to tell you how.
Wind’s Second Coming
Wind generators pulled water out of the dry earth for early 20th century farmers and ranchers. Wind could have energized our nation.
But American genius was more excited by coal and oil, which wrote a better narrative of gushing discovery and heroic miners. All along, wind was there waiting, but we wrote our energy history in other ways until the risks of fossil fuels overwhelmed us.
Wind energy is the renewable that can be produced in greatest supply. It’s been seeping into the Maryland market since the legislature deregulated utilities in 1999, leading to the restructuring of electricity companies. That process was supposed to give us rate payers (utilities calls us that rather than customers) choice in how we power our homes.
But for most of the first decade following deregulation, you had to be a devoted analyst of fine print to figure out its benefits. Most folks paid attention only when energy bills soared.
“Since about 2001, there have been choice opportunities,” Douglas Nazarian of the Maryland Public Service Commission told Bay Weekly. As the chairman of the organization that regulated utilities, Nazarian is the horse’s mouth on such subjects. “But there’s been very little resident consumer choice exercised in Maryland.”
Just seven percent of Maryland residential consumers have taken advantage of deregulation by exercising their choice of energy supplier or source. Three-quarters of commercial and industrial utility customers, on the other hand, buy their electricity from alternative suppliers.
Nothing’s been stopping us from changing how we buy our electricity — except inertia. However, not much has been pushing us, either. Moving from able to actual has awaited two forces. First, there has to be green energy to buy. Law mandates that by the year 2022, 20 percent of Maryland’s energy must be green, which should help encourage alternative energy supplies — except that the state is yet to license its first wind farm.
Second, there must be inspired marketers who, like William Wrigley, can see how much can be made from the wind.
Wind Begins to Blow
The first wind salesman to knock on my door was inspired enough to push my weekly deadline out of mind while I listened to his story. Ed Kenny’s entrepreneurial family business, Wilmer’s Electronics, based in Edgewater, has advertised pagers and eBay services in Bay Weekly’s pages over the years. Now Kenny was selling wind.
One hundred percent wind, and every electron of it from a wind farm in Pennsylvania. Not only was it green, Kenny explained, it was also cheap. Cheaper, At least, than I was paying Baltimore Gas & Electric.
The last time Bay Weekly checked the price of wind, buying that energy source was a good deed rather than a good deal. That was the conclusion of Energy Wise, Michelle Steel’s prize-winning story from late 2007 [http://bayweekly.com/old-site/year07/issuexv48/leadxv48_1.html].
Back then, you could choose an alternative supplier — as long as you were willing to pay a premium to buy green. You’d be paying pennies more per kilowatt hour than, say, BGE’s late-2007 price of close to 11 cents — a difference of more than 20 percent. Suppliers were scarce, and you had to hunt to find them.
Today, they’re looking for you. Maryland Public Service Commission [http://webapp.psc.state.md.us/intranet/supplierinfo/electricsupplier_new.cfm] lists alternative energy suppliers on its webpage. BGE customers have 14 choices; throughout Maryland, there are 32 choices.
Many of them are supplying green energy at kilowatt-hour rates cheaper than BGE’s run-of-the-grid energy.
Viridian Energy PA, LLC — viridian is Latin for green — is the supplier Kenny wants you to choose. The Connecticut company completed licensing in Maryland as an alternate energy supplier to BGE and Pepco in July. Kenny knocked on my door days later to pitch his newly licensed business.
His company is offering 20 percent wind-generated electricity at a 17 percent discount over BGE prices. Or 100 percent at a nine percent discount.
That savings is how Kenny plans to profit himself.
To make his point, he tells a story.
“Go into a room with 100 people and ask Who’s willing to do a little more to help the environment?,” he says “Ninety-eight hands go up.
“Then ask Who’s willing to pay a little more to help the environment?? Only two hands go up.
“Viridian has found a solution. Let people buy electricity at a discount. Let them help the environment. Make it cheaper. Everybody wins.”
“It’s reminiscent,” he said, “of where telecommunications was 15 years ago with deregulation.”
Still More Alternatives
In this new climate of deregulation, Viridian is not alone in wanting your business — and Kenny is not alone in selling Viridian. Independent associates are popping up all over. In Calvert County, for example, the Bay Business Group has added selling wind as a sideline.
Companies are soliciting by mail and email, as well. Direct Energy — another supplier on the Public Service Commission list — mailed a brightly printed envelope filled with promises of “guaranteed savings.” By email, Direct Energy president Steven Murray imagines the future that competition could bring to Marylanders. “According to a study conducted by the Texas Alliance for Retail Markets,” Murray writes, “prices are down more than 30 percent on average (adjusted for inflation) since Texas introduced electric competition in 2002.”
Those companies jumped in the wind market to make money. That makes increased competition for Clean Currents, the Maryland company that’s been brokering energy since 2006.
“There’s a yin-yang to the competition,” says Gary Skulnik, president of Clean Energy Partnership of Silver Spring, “The positive side is they’re helping to grow awareness about customer choice. But the downside is that we never expect 100 percent of the market. We’re not that kind of company. We adhere to environmental principles and have a very green focus.”
Your Wind Energy Primer
Saving on the energy you buy — from nine to 30 percent — and pushing green energy production. Can you believe your ears?
Mostly you can. That, Nazarian explains, is because in 2009, the Public Service Commission “adopted new regulations that contain a lot of consumer protection and provisions related to choice.”
For one, your utility bill now tells you the price you’re paying your current supplier so you can easily compare it to other suppliers. That information is listed as important information about your bill in the second section of the bill sheet, just above the tear-off payment slip.
For another, your utility can’t cut off your power if you switch suppliers. There’s no motive for BGE or Pepco to do so, anyway, as it still gets a cut of your electricity useage. The utility owns your account no matter who your supplier is because of Commission regulations that the utility purchase the receiveables of all altrenate electricity suppliers. If you default on your bill, you’re their problem, not your new suppliers’.
“Utilities have the responsibility to collect,” says Nazarian, “and they are very good at that.”
You’ll still be paying that delivery service on your monthly bill to your utility, as well. That’s because no matter who sells the electricity, it travels along lines owned by your utility, BGE or Pepco.
For a third, if your new supplier fails, that parent company will automatically revert to supplying you electricity, at its own kilowatt-hour rate.
Even so, all those protections don’t guarantee you happiness ever after.
“Nobody is regulating those sources of supply,” Nazarian says. “We’re regulating the mechanics of choice, but alternative suppliers are free to price and structure however the market will bear, as has been done in a lot of other contexts for a long time. So people need to be extra vigiliant.”
Where’s My Wind
As I considered the many alternative offerings of energy, with their varying compositions and prices, I looked forward to the day, soon after switching, when mountain or prairie winds turned the fan that’s cooling me as I write. Alas, that’s not how energy choice works.
An electron’s an electron when it hits the grid.
It’s still that nation-serving energy network — both receiver and distributor — that powers my fan and your lights no matter whose energy we buy at what price or composition.
What you buy if you choose wind are renewable energy credits, which support an alternative source that’s pumping wind energy into the grid. One credit is created every time a wind farm generates 1,000 kilowatt-hours of electricity.
“Credits are like claim checks on power,” Clean Currents’ Skulnik explains. “When a turbine is spinning, it’s creating two products: actual electrons and environmental credits that are a tracking system. If I’ve got a wind energy credit, I’ve got wind power.”
But all the energy is mixed together in the grid. A supplier straightens it out by purchasing wind credits in the first place. You in turn buy a share of them, thus supporting the production of more wind.
Buy more credits, and slowly but surely, we increase the proportion of wind-borne electrons rushing through the grid. And, in the law of supply and demand, we reduce the use of coal, nuclear power and natural gas.
Questions to Ask Before You Make the Switch
If you find a product you want to choose because you like either its environmental makeup or price, you should know what you’re getting into.
1. Is the company licensed in Maryland? (Check at http://webapp.psc.state.md.us/intranet/supplierinfo/searchsupplier_new.cfm).
2. What price is being offered and for how long?
3. Are there termination fees or other limitations on your ability to switch again?
4. Is price per kilowatt-hour going to change and under what conditions?
5. In buying higher levels of wind or renewables, can you look at the makeup of the product offered and at what price?
6. Does a contract purchase automatically renews and at what price?
–Douglas Nazarian, Public Service Commission