Beyond the monthly bill: 4 ways to achieve renewables goals
Getting buy-in from utility leaders is crucial to improving clean-energy options for corporate customers.
Whether it’s Microsoft collaborating with Black Hills Energy in Wyoming, Toyota pursuing renewable energy in Kentucky or Walmart working with Southern Company in Alabama and Georgia, corporate demand for cleaner energy is helping to shape energy grids and investments across the United States. Customers want more personalized service from their electric company and better options for purchasing affordable clean energy.
Many utilities have responded to this customer need. Over the past three years, five utilities have completed about 900 megwatts (MW) of renewable energy deals with large-scale energy customers. An additional 500 MW are anticipated, mostly through green tariff programs, which enable customers to source up to 100 percent renewable energy through a fixed rate.
Behind these transactions is a quiet but significant shift in the customer-utility relationship. Until recently, communication between large-scale buyers and the electric company often was limited to an exchange over a monthly energy bill. Today, companies and other customers with large energy demand want a more robust conversation around needs, assets, constraints and opportunities. Better partnership is crucial to creating affordable and effective renewable energy products. And there’s an upside for all Americans: upgrades to our electricity system that deliver safer, cleaner and more reliable power.Companies and other customers with large energy demand want a more robust conversation around needs, assets, constraints and opportunities.
But today, 17 states still do not have options for large-scale buyers to directly purchase renewable energy at scale. And many utility green tariff programs are young, with a few big transactions each to date. As momentum grows for renewable energy purchasing and existing programs mature, customers and the utilities that serve them should keep these important ideas in mind.
1. Large-scale customers' energy investment decisions can benefit the grid.
Since utilities are uniquely equipped to combine reliability with innovative customer-sited resources, a constructive conversation can lead to solutions that create more value for both customer and utility. Microsoft and Black Hills Energy collaborated to design a unique tariff that provides Microsoft with the flexibility it needs to meet its anticipated load growth through renewable energy. The tariff allowed the utility to access Microsoft’s on-site back-up generation to benefit the grid during peak demand times. Neither transaction will negatively affect other customers. In fact, the deal increases the reliability of other customers’ power.
2. Even large-scale energy customers with geographically dispersed loads can influence the types of renewable energy products utilities offer.
Many corporate customers want to purchase renewable energy for a range of stores, offices and facilities in different locations. With subscriber-type utility programs such as Puget Sound Energy’s (PSE) Green Direct, customers with distributed loads, such as REI, Starbucks and Target, can aggregate their smaller loads into a large renewable energy project. Green Direct provides more cost-effective electricity and a bigger impact on the grid. Active collaboration shaped the program, from rate structure to regulatory proceedings.
But one example shows why customers need to engage. Early on, PSE proposed Premium Green as the program title. Customers raised concerns: A product called "premium" would turn off their financial officers. PSE renamed the program Green Direct to reflect the direct connection the renewable energy had to the monthly bills. Without close collaboration, something as easily overlooked as the title could have resulted in a tariff that went unused.Engagement from senior leadership has been crucial to completing customer-centric products.
3. Customers need to help utilities understand their specific needs.
Corporations have signed on to many renewable energy based initiatives to express interest in cleaner energy. Tools such as the Corporate Renewable Energy Buyers’ Principles have raised awareness among utilities, regulators and states on customer priorities.
But companies need to deepen the conversation with their local utility to put the principles,such as better finance options and long-term contracts, into practice. Driving grid-scale change with traditional utilities requires a commitment to collaborate on the details. This has emerged as a common practice across green tariffs that have yielded deals for large-scale renewable energy.
4. Committed senior utility leadership is required to drive success.
Engagement from senior leadership has been crucial to completing customer-centric products that have been used by buyers. Whether it is PNM Resources in New Mexico, PSE in Washington or Dominion Energy in Virginia, commitment at the top has enabled utilities’ technical staff to focus on what they hear from customers and to find ways to balance those requirements with the needs of other customers and the electric company’s shareholders.
Corporate demand for renewable energy and marketplace shifts have placed new, competitive pressure on electric companies. Utilities and states know that to compete for new business, they must match or improve on the expanded renewable energy options that leaders have established. With proactive conversation, customers can affect utility programs, resulting in projects that meet more of their needs.
A robust conversation between customers and utilities can yield integrated solutions, such as energy efficiency, electric vehicle charging, disaster recovery or demand response with a renewable energy purchase. This next generation of innovation will come to fruition only with active collaboration between customers and utilities.