Information for retail electricity providers about California's Power Content Label
Since the California electricity system is open to
competition, electric service providers (ESPs) can offer many
different types of electricity products from which
California consumers may choose. These electricity products
differ from one another in price, terms of service, and in
how the electricity was generated. The actual electricity
you receive will be identical regardless of which ESP you
choose – whether you stay with your utility or switch
to a new company – but now you can choose which types
of energy resources you support when you purchase
electricity.
Senate Bill 1305, Statutes of 1997c
requires ESPs to disclose information to you about the
energy resources used to generate the electricity they sell.
As directed, the California Energy Commission (Energy
Commission) created a user-friendly way of displaying this
information called the "power content label."
This label will provide you with reliable information about
the energy resources used to generate electricity, enabling
you to easily compare the power "content" of one
electricity product with that of others.
Think of the power content label as a "nutrition
label" for electricity. The power content label
provides information about the energy resources used to
generate electricity that is put into the power grid. Just
as a nutrition label provides information you can use as you
shop for food, the power content label provides information
that can be useful as you shop for electricity.
What information does the power content label provide?
Electricity can be generated in a number
of ways. It can come from renewable resources such as
biomass and waste, geothermal heat or steam, solar energy,
rivers or small hydroelectric reservoirs, and wind energy;
or, it can be produced from resources such as coal, large
hydroelectric reservoirs, natural gas, or nuclear fuels.
The power content label describes the sources of electricity
that is put into the power grid. Each ESP must display
information about the energy resources represented by their
contracts with electricity generators. See below for a more
detailed explanation of the information contained in the
power content label.
Where and when will I see the power content label?
As of fall 1998, ESPs are required to
include the power content label in all advertisements sent
to you in the mail or over the internet. Furthermore, your
ESP must send you quarterly updates for the product
you're purchasing. If there have been any changes in what the ESP is able to provide you, you
will learn of them in these updates. If you choose an
electricity product with a resource mix different
than the California Power Mix, your ESP also has to
let you know after the year is finished what you actually
purchased.
How do I know that the information is reliable?
A verification process is in place to minimize
fraudulent claims. There can be no guarantee that the
information is 100 percent accurate, but Senate Bill 1305
(now part of the Public Utilities Code) provided for a
verification process administered by the Energy Commission.
Any violations of the Public Utilities Code may be
prosecuted as misdemeanors, and any company making
misleading claims runs the risk of being exposed by other
companies or by consumer protection organizations.
Will my electricity be different?
Keep in
mind that the actual electricity you use will be
indistinguishable from the electricity used by your friends
and neighbors. This is unavoidable because everyone is
served through the same transmission and distribution
system. The power content label cannot tell you about the
electricity that you use in your home; instead, it tells
you where your dollars are going. If you purchase
electricity generated using natural gas, for example, you
are paying a natural gas-fired plant to generate electricity
and to feed it into the main power grid. Since it is
impossible to track the flow of electricity on the grid,
however, there is no way to identify the actual power plant
that produced the electricity you consume in your home. But
it is possible to track the dollars you pay for
electricity. Your electricity dollars will support
electricity generation from various energy resources in the
proportions listed on the power content label.
Just because you can't identify which power plant
generated the electricity you consume doesn't mean that
your choice doesn't make a difference. Your
electricity choice does make a difference, because
you decide what kinds of electricity are fed into the
electricity grid. Over the long term, your
purchasing decisions will help determine what kinds of power
plants are built to serve California's electricity
needs.
So what exactly does the power content label tell you?
Let's look at the sample label for Product A, shown
below.
Energy Resources: This
column lists the different energy resources that can be used
to generate electricity. Renewable resources, as
listed, include biomass and waste, geothermal, solar, small
hydroelectric, and wind. For a description of these and
other fuel types, see the section titled Energy
Resources.
Product A: This column
identifies the breakdown of power by energy resource for
the electricity product you are considering. In this
example, 56 percent comes from renewable resources, although
the ESP does not have sufficient information to provide
specifics about the renewable mix. This is acceptable and
normal. If you were to purchase this electricity product,
the ESP would be required to report these details when this
information becomes available at the end of the year.
California Power Mix: This column allows you to
compare Product A with the 2000 California Power Mix.
This information is provided as a reference point for you
to evaluate electricity products.
First footnote: This footnote provides information about
how the ESP purchases the electricity it sells. It is
not necessary to understand this aspect of the label in
order to make effective use of the label, but for those who
would like an explanation, please read on.
When an
ESP purchases electricity directly from an individual
electricity supplier (i.e. a generator), it is called a
"specific purchase." If an ESP purchases
electricity through a specific purchase, the ESP can
identify exactly what types of energy resources were used to
generate the electricity they sell. This differs from
electricity purchased from a power pool or exchange where
there may be no identifiable tie between the ESP and any
particular electricity generator. For an ESP to claim a
power mix different than the California Power Mix, they must
purchase some electricity through a specific purchase with a
supplier. An ESP choosing not to claim specific purchases
must claim the California Power Mix for that portion
of its electricity. In essence, this footnote tells you
about the financial relationships between your ESP and the
generators who feed electricity onto the grid. It is not
necessary for you to understand these financial
relationships to understand the label, and you do not need
to perform any additional calculations to understand
"where" your electricity dollars are going.
If you have further questions about the power content
label, contact Jason Orta at 916-653-5851 or
jorta@energy.state.ca.us.
California Power Mix
The California Power
Mix reflects the energy resource mix for electricity
consumed in California net of electricity sold to consumers
as specific purchases. If your ESP is purchasing power from
the Power Exchange or another large exchange, and cannot
identify which generator is generating the power it sells
you, your ESP will claim an energy resource mix for its
electricity product that is identical to the California
Power Mix. Information about the California Power Mix is
provided only as a reference.
Energy Resources
- Eligible Renewable: Simply put, renewable
resources are energy resources that either cannot be used up
or are quickly replenished through natural processes. In
California, biomass and waste, geothermal, solar, small
hydroelectric, and wind energy resources are all considered
eligible renewable resources.
- Biomass and waste-to-energy - Biomass fuels are
residues produced from logging, mill operations and the
manufacture of wood, pulp, paper, and fiberboard,
agricultural field and orchard crops, livestock and poultry
growing operations, food processing, and demolition (urban
wood waste). Waste fuels include combustible residues from
industrial processes, municipal solid waste
("garbage," including tires but not garden
trimmings because these are considered "biomass"
fuels), and municipal liquid wastes. In general, solid
biomass fuels are converted to electricity by burning the
fuel in a boiler, which generates the steam used to turn a
turbine generator. These fuels may also be gasified and
burned to produce electricity. Liquid biomass fuels are
converted to electricity by capturing and burning the gases
they give off.
- Geothermal - Geothermal
electricity is produced using heat from deep within the
earth (often evidenced by the presence of hot springs or
geysers). This heat is captured and used to turn an
electric generation turbine.
- Solar - Solar
electricity can be generated in two ways. One way involves
focusing the heat of the sun on a central point that heats
up. This heat is then used to produce steam, which turns an
electricity turbine. Another way to harness solar power for
electricity is using photovoltaic cells such as those seen
on rooftops. Photovoltaic cells convert energy from the sun
to electricity through an electrical process. Though each
photovoltaic panel produces a relatively small amount of
electricity, photovoltaic panels can be grouped together to
produce larger amounts.
- Small hydroelectric (30 megawatts capacity or smaller) - Hydroelectric power
plants transform the energy of falling water into electrical
energy through the use of water wheels or hydraulic
turbines. Small hydroelectric facilities may either use a
small dam or river flows to harness the energy of the moving
water. Federal law defines small hydroelectric as having a
capacity of 30 megawatts or less, and California uses this
definition for purposes of the power content label as well
as other programs.
- Wind - Wind energy is
derived from the movement of air caused by the uneven
heating of the earth's surface by the sun. Power from
the wind is captured using wind turbines – blades that
turn as the wind blows – to generate
electricity.
- Coal - Coal is a form of carbon that is created
over millions of years from decaying plants. Coal is
normally used in a pulverized solid form to fuel a
conventional boiler, generating steam, which is then used to
produce electricity.
- Large Hydroelectric
(greater than 30 megawatts capacity) - This technology
is essentially the same as small hydroelectric except that
it operates on a larger scale. Whereas small hydroelectric
facilities may be positioned on a river or canal, a large
hydroelectric facility is typically located on a large
dam.
- Natural Gas - A fossil fuel that comes
from deep within the earth, natural gas originates from
ancient decaying plant matter. It is extracted from the
earth, processed, and burned to produce electricity.
- Nuclear - Nuclear energy is derived from the
splitting or "fissioning" of uranium atoms.
Uranium is mined, processed to increase the amount of
fissionable material, and made into fuel rods which are then
placed in nuclear reactors. As the uranium atoms split
inside the reactor, they generate heat which is converted to
steam and used to generate electricity.
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