Before you REC yourself...

ICYMI: Last week, we decoded the first two pages of my electric utility bill.

We ended the previous post on a tantalizing cliffhanger: my electric bill, ostensibly from the Consolidated Edison Company of New York, names an entity called Green Mountain Energy as my electricity supplier.

What gives?

If you revisit that post, you'll find I wrote that wholesale energy markets mostly consist of Independent Power Producers, i.e. companies that own gas plants, wind farms, etc. and sell the power they independently produce to Con Ed and other buyers.

Mostly, because there are a few other options for procuring power here in New York. One is Green Mountain Energy, an Energy Service Company (ESCO) that supplies our apartment with 100% renewable energy!!

Well, kind of...

Actually, not really.

As it turns, there's no mechanism by which Green Mountain Energy or anyone else can send electricity from, say, a solar farm upstate straight to my apartment. Our Alternating Current (AC) energy grid isn't smart enough for that—any and all electrons sent into the grid naturally flow to the nearest point of demand.

Think of electricity entering the grid like an excitable golden retriever that gets unleashed in a park in which every person is frantically waving a tennis ball. Just because I've got a tennis ball, too, doesn't mean she's coming my way. She's just gonna run up to the first person she sees.

(This is a big reason why community solar projects are so beneficial—the electricity they generate always flows to the nearest homes first, which makes the community more resilient when electricity is hard to come by.)

Okay, so then what does Green Mountain Energy do?

They buy Renewable Energy Certificates.

Renewable Energy Certificates?

Yes, Renewable Energy Certificates! RECs, as they're commonly known, are 'market-based instruments' sold by clean energy producers to utilities, businesses, and ordinary folk.

Each REC certifies the generation of one megawatt-hour of electricity by a renewable energy generator such as a wind farm, solar farm, hydro plant, or a producer of 'biomass'.

(I haven't written about biomass yet, but basically it means burning 'waste material' derived from organic, theoretically renewable sources. In practice, it mostly seems to mean cutting down old growth forests to make wood pellets to ship to England so they can claim to be using clean energy. Biomass is a whole can of worms... metaphorically speaking.)

The purpose of RECs is three-fold:

1. Incentivize the development of new clean energy projects by providing a steady, secondary stream of income for clean energy producers
2. Allow states and orgs that either can't or won't do the difficult, expensive work of reducing their own greenhouse gas emissions to still meet legally obligated clean energy mandates
3. Give upstanding citizens, like myself, an opportunity to provide material support for clean energy projects—even if those projects are located in upstate New York and their energy output will never reach my apartment

RECs are somewhat controversial. You may already have an inkling as to why. In my mind, they're adjacent to a broader category of 'Green in Name Only' (GINO) (I just came up with that) decarbonization strategies, which includes stuff like 'carbon-offsetting', i.e. paying random people on the internet to allegedly plant trees in the global south and claiming it 'offsets' your own vile industrial pollution.

Anything that absolves polluters from actually lowering their emissions is not a real solution to decarbonizing the world, even if it does support good causes, though that is by no means guaranteed.

For me—a city renter with no access to community solar projects—buying RECs is a way for me to contribute to the development of clean energy projects. And that's why I choose to do it, even though it's more expensive than letting Con Ed buy me the cheapest electricity they can.

Just how effective are RECs?

Depends on who you ask, and how the REC is sold.

RECs can be sold as a 'bundle', meaning the certificate is paired with the megawatt of electricity it's certifying, or they can be sold separately.

Why does bundling matter? Because knowing exactly where the REC came from makes it easier to determine if the REC is legit. Verifying the REC's legitimacy is important—there are lots of bogus RECs out there getting sold to companies that just want to check off a box for purchasing clean energy. Double-counting RECs is also a problem.

To understand this a little better, think back to the golden retriever in the park. Once that doggo's unleashed, all hell breaks loose. But if the owner puts a collar on the dog, you'll always know who she belongs to.

The second factor to gauge a REC's effectiveness is whether it generates enough revenue to spur or sustain clean energy development. Per NYSERDA, the price of a 'Tier 1' REC in New York in 2024 ranged from $31.78 to $36.37 per megawatt-hour. Tier 1 means the REC comes from a relatively new clean power generator (one built after 2015). Tier 1 is the most expensive and most valuable tier. This makes some sense: a new solar array needs to pay back its loan, but a 50-year-old hydro plant does not.

A relevant aside: when the nefarious Andrew Cuomo was governor of New York, he tried to appease his rich real estate donors by inserting a loophole into Local Law 97, a law that requires big buildings in New York to reduce their emissions 40% by 2030 and 80% by 2050. The loophole would have allowed landlords to purchase Tier 2 RECs in place of, y'know, actually reducing their emissions. Thankfully, the measure failed. Yet another sound reason not to rank Andrew Cuomo in the upcoming mayoral primary on June 24th!

Whether RECs move the needle is up to the individual clean power producer. From what I've read, RECs are generally seen as a helpful supplement to the selling of megawatts, but not on par with something like the federal production tax credit. When the federal tax credit was allowed to expire in 2013, wind farm development in the U.S. dropped off precipitously, and it's never fully recovered.

How do you buy and sell RECs?

How Green Mountain does it

1. Con Ed tracks my energy use just like it would for a regular customer. But instead of charging me at the end of the month, they tell Green Mountain how much energy I used.
2. Green Mountain Energy then purchases an equivalent number of bundled RECs to match all their customers' aggregate monthly usage. They can buy them from either the producers themselves or in bulk from an online exchange.
3. I pay Green Mountain a fixed rate for this service. (Not a fixed price, but a fixed rate. My supply charges still fluctuate depending on how much energy we use.)

Nothing changes about where my electricity comes from. Which means that mostly it still comes from fossil fuel gas plants. But I know in my heart that some portion of my utility bill is supporting clean energy projects near and far.

Under my plan, Green Mountain buys 50% of their RECs from renewable sources within New York State and 50% from wind farms around the country.

How much I pay

My fixed rate of supply is 18.6 cents per kilowatt-hour. I don't know if that's still the going rate or not. If you're considering signing up, definitely make sure you're aware of the current rate.

Is 18.6 cents per kWh good?

I'll say this: after I published my post last week, a friend reached out who was clearly alarmed—if not shaken—at how much I'm paying.

'The 18.6 cent rate made me so uneasy,' my friend texted. 'Your rate is way higher than mine—18+ cents is actually cynically high.'

Cynically high! This friend, a Con Ed customer in Brooklyn, paid a mere 12.418 cents per kilowatt hour during the month of April.

If that had been my rate, I'd have only paid $16.76 for my energy supply vs. the $23.44 I ended up paying for the same time period.

While supply rates vary for Con Ed customers, it's safe to say that I routinely pay more than non-Green Mountain Energy customers for my electricity supply every month. Maybe by as much as a third.

For me, that's worth it. I think of the extra ~$10 a month as a donation to the greater cause of supporting clean energy projects in my state.

But if I used way more electricity, my costs would skyrocket and it might cease to be worth it.

Is Green Mountain Energy an ethical company?

Well, Green Mountain is a for-profit company. They're also a subsidiary of energy giant NRG Energy (kind of a redundant name...), which acquired GME back in 2010 for a cool $350 million. To give you a sense of where they're at, climate-wise, NRG Energy just purchased 18 gas power plants in a $12 billion deal—and not with the intention of putting them out of their misery.

So, no, Green Mountain Energy is not strictly speaking an ethical company. But who is these days?

At least they have a fairly robust system in place for making sure the RECs they buy are legitimate. They employ an independent auditor to ensure, among other things, that their RECs meet something called the Green-e Energy National Standard, whose 44-page white paper on how they check your RECs is good enough for me.

So should everyone sign up?

My personal opinion is that if you want to support clean energy, don't have the direct means to do it, and can spend a few extra bucks each month, ESCOs like GME at the very least provide more than mere lip service.

Plus, if you sign up right now with promo code GREENJUICEISDASHIZNIT50, you'll get a FREE sun visor valued at...

Just kidding.

Contracting with an ESCO like Green Mountain Energy is something one needs to decide on one's own, preferably after meditating for several hours at the base of a fig tree.

Let's finish this puppy up by decoding the rest of my utility bill. Back to page 2:

Box E

Box E provides Con Ed's definitions of what's in their bill. I figured this section was worth including, should you care to hear it straight from the horse's peanut butter-filled mouth. The text is really small, so I've faithfully transcribed it for you here.

Basic Service Charge: A charge for basic system infrastructure and customer-related services, including customer accounting, and metering services.
Delivery: Charge for maintaining the system through which Con Edison delivers electricity to you.
Energy Delivery: Additional Delivery Charges and Adjustments. For more information, visit conEd.com/rates.
GRT & other tax surcharges: Taxes on Con Edison gross receipts from sales of utility services and other tax surcharges.
New Read: Monthly meter readings are no longer used for billing purposes. Instead, we use the data provided by your smart meter(s), which improve accuracy by recording your energy use in 15-minute intervals.
Prior Read: Your prior meter reading was calculated from when your last bill was received.
Reading Difference: The reading difference is the result of subtracting your prior meter reading from your new meter reading. Please note: the New Read and Prior Read values shown on your bill have been rounded and/or truncated. Calculating the Read Diff yourself may result in a lower value than the one shown here.
Reading Type: You will see the word Estimated here if your smart meter was unable to communicate your energy use during the billing period. Otherwise, your reading type will be Actual.
Sales tax: Tax collected on behalf of New York State and/or your locality.
System Benefits Charge: A charge that recovers costs associated with energy-efficiency and renewable-energy programs implemented by the Company and the New York State Energy Research and Development Authority (NYSERDA).
Temperature * Source: Central Park Weather station.
Total Usage (kWh): Your total usage is the sum of the 15-minute interval data recorded by your smart meter(s) during the billing period. This is used to calculate the energy-delivery and energy-supply charges on your bill.

Good stuff. Onwards!

Page 3 of 3

We're in the homestretch, folks.

I found the Environmental Disclosure Label here confusing. I purchase green energy from an ESCO, and therefore, per their own admission—'This label does not apply if you are purchasing green energy from an ESCO'—the following charts in Box F shouldn't apply to me... and yet they do! Because as we discussed, Green Mountain Energy isn't really delivering renewable energy to my apartment. So... I'm pretty sure they don't know how all this works, either.

Let's move on to Box F.

Box F

Box F is also confusing. The title makes it sound like just one thing, but actually it's two separate things: 'Fuel Sources', i.e. the mix of where the electricity I use is generated, and 'Air Emissions Relative to New York State Average', which is supposed to show the air quality near my apartment relative to the stage average.

The Fuel Sources chart is notable because we can see just how much of my electricity comes from gas power plants (48%) as well as how little comes from solar and wind (less than 3%). If I lived upstate, where renewables are way more common, these numbers would look very different. One could make the case that we desperately need to build more renewable energy here in downstate New York.

Air Emissions Relative to New York State Average: I actually called up Con Ed to see how this was calculated and was told a) this function isn't working correctly and hasn't been for months and b) the rep I spoke with didn't know how it was even supposed to be calculated. Alright, then.

Are we done yet?

Sorry, but no. I'm gonna quickly talk about two more things!!

Regional tracking systems

Regional tracking systems are the organizations that issue the RECs. In New York, it's called the New York Generation Attribute Tracking System (NYGATS), which is administered by NYSERDA, a state org dedicated to decarbonizing. The regional tracking system's job is to issue, track, verify, and ultimately retire RECs once they've been sold.

Time-of-Use rates

Time-of-Use rates (TOU) is when the electric utility measures your home's energy use by the hour instead of by the month.

Why would you do that? Remember the Green Juice manta: electricity is cheap during the day and expensive at night. If you've got rooftop solar panels and a home battery, you can store the solar energy you generate for use in the evening, thereby avoiding high electricity costs altogether. But this will only meaningfully lower your utility bill if you're enrolled in Time-of-Use rates: the utility needs to know exactly when you're using grid electricity and when you're not to bill you accordingly.

Not all utilities offer TOU rates. Here in New York, you can choose to opt into TOU rates by calling Con Ed.

And that's it! We freaking did it, people. I can't imagine anyone is still reading this, but if you are, I hope you learned something useful... and had a bit of fun along the way ;)

Next week, something new—Green Juice Presents: Sips! Sips are just shorter posts that stick to a single subject. The plan is to alternate deeper dives like this one with shorter Sips to achieve the twin goals of not overwhelming our readers or ourselves. Can I keep the Sips to under a thousand words?

Reader, we'll soon find out. Thanks for being here, and please subscribe if you haven't already.