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City of Palo Alto Utilities
Voluntary Customer Premium Payments
California | CA
Solar Energy Credits (RECs, etc),Green Pricing Program
The City of Palo Alto Utilities (CPAU) launched PaloAltoGreen in 2002, a traditional voluntary green pricing program where program customers pay an additional 1.5 cents per kilowatt hour (kWh) for green energy. The average residential consumer in Palo Alto using 650 kWh per month will pay an average premium of $9.75 to purchase 100% renewable energy. The program has enrolled 20% of the City`s residents to date (though not all purchase a 100% offset), which is significantly higher than the average green pricing program rate at 1-2%.
PaloAltoGreen is open to master-metered multifamily residences, such as apartments and condominiums, small commercial customers and to demand-metered commercial and industrial customers. Small commercial users pay the same rates as homeowners. Large businesses' rates are based on blocks of energy and begin at a premium of $15 a month for a 1,000 kWh block. The large customer may buy 100% renewable energy or a portion determined by the number of blocks purchased.
CPAU purchases the renewable energy for the program; 97.5% comes from wind and the remaining 2.5% comes from solar. The utility purchases Solar Renewable Energy Credits (SRECs) to meet the demand for the solar portion of PaloAltoGreen through a third-party contract with 3-Degrees, Inc.
Current demand for the solar portion of PaloAltoGreen is approximately $60,000 per year, and is expected to increase to $120,000 or more per year in the next three to five years. To promote additional solar development within Palo Alto and reduce the SRECs purchases from outside sources, the city, in December 2007, began purchasing SRECs from local commercial and industrial customers that had solar installations. CPAU currently pays $50/MWh for SRECs through 3 Degrees, Inc. SREC prices from local systems are expected to vary between $30/MWh and $150/MWh, but will target an average cost lower than the current vendor.
Only systems that exceed 100 kW are being considered initially for local SREC purchases, which is the same minimum size requirement for the performance-based incentives in their PV Partners Program. Contract terms cannot exceed 20 years and the contracted amounts cannot exceed $600,000 per customer.
General Project Description: http://www.cpau.com/programs/green/
PaloAltoGreen Rate Schedule: http://www.cityofpaloalto.org/civica/filebank/blobdload.asp?BlobID=8074