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Customer Credit Program - More Info

HISTORY AND BACKGROUND of CUSTOMER CREDIT PROGRAM



The Customer Credit Program was discontinued April 1, 2003.
The information on this page is provided as an historical background to the program.



The Customer Credit Program, formerly called the Customer Credit Subaccount, is part of the California Energy Commission's Renewable Energy Program. It provided "Customer Credits" to consumers who purchased eligible renewable electricity from electric service providers that were registered with the California Energy Commission. Through this program, which was discountinued after April 3, 2003, consumers choosing renewable or "green power" could automatically be credited with up to 1.0 cents per kilowatt-hour of electricity consumed.

Prior to September 20, 2001, deregulation of the electricity industry provided most consumers with the opportunity to choose which company would supply their electricity. While price alone could be the deciding factor for some people, others decided to purchase renewable electricity even if it cost more than conventional electricity.

Between January 1, 1998, and September 20, 2001, individual consumers could choose renewable or "green power" for themselves and receive a credit for choosing renewable energy. On September 20, 2001, consumers' right to choose to receive electricity from alternate electric service providers was suspended by the California Public Utilities Commission. The suspension of customer choice was considered a necessary step to help control the costs to the state that ultimately resulted from failures in the electricity market. Because of this decision, consumers can no longer choose a company that provides "green power." If customers were already signed up with an alternative electric service provider prior to September 20, 2001, they continue to be served by the provider of their choice and receive the customer credit if applicable.

Senate Bill 1038 (Statutes of 2002, Chapter 515, Sher) signed into law in September 2002, required the Energy Commission to submit a report to the Governor on whether or not the original customer credit program should continue. The report entitled Customer Credit Renewable Resources Account: Report to the Governor and Legislature (Commission publication # 500-03-008F, PDF file 348 kb) recommended that the customer credit program be discontinued due to uncertainty in the direct access market, as well as a lack of evidence that the program had the potential to increase California's renewable energy supply.


Renewable Electricity

Renewable power is generated using fuel resources that either don't run out or are quickly renewed through natural processes. These resources are typically defined as solar, wind, geothermal, biomass and small hydroelectric. Under California regulations, these are joined by digester gas, landfill gas, municipal solid waste and waste tire.

All methods of generating electricity affect the environment. Renewable electricity technologies, however, can be among the more environmentally friendly sources you can choose.

Before deregulation and competition, the state was able to ensure that California's electricity mix included a minimum amount of renewable power. In the competitive market, the responsibility lies with consumers to choose renewable power, ensuring that existing renewable facilities continue to operate and provide a market for the development of new renewable facilities.

Renewable power makes use of secure, indigenous and replaceable natural resources. In many applications, renewable energy can help clean our air by reducing the production of air pollutants like nitrogen oxides and reducing emissions of carbon dioxide (a leading contributor to global climate change). Renewable energy also helps create jobs for Californians and establishes California as a world leader and exporter of renewable power technologies. Nationwide, renewable energy reduces our dependence on imported oil (though very little oil is used to generate electricity in California).

Although any cost premium for renewable power is likely to be small compared to the total size of your electric bill, renewable power can cost more than conventionally-generated power. The costs of renewable technologies are becoming more competitive with conventional power sources as more consumers purchase electricity generated from renewable resources, and your decision to buy "renewable" can help continue this trend.


Customer Credit

Customers purchasing electricity from a registered renewable provider were eligible for the customer credit.

Some electric service providers (ESPs) reflected the 1.0 cent per kilowatt-hour (kWh) credit in their pricing scheme, while others used the credit to give customers a monthly bonus.

Consumers were eligible for the credit if they received service from PG&E, SCE, SDG&E, or Bear Valley Electric Company and "switched" to a registered renewable provider to purchase electricity. Customers who switched providers still received services, such as transmission and distribution, from their original utility, but their dollars spent on the energy portion of the bill supported the energy sources of their choice.

Some electricity companies were listed as "Green-e" certified. Green-e is a non-governmental, non-profit program designed to help consumers easily identify renewable electricity products. Green-e certified electricity products contain at least 50 percent renewable power and meet certain environmental criteria. The electric service provider applying for Green-e certification must sign a code of conduct and must verify the content of their electricity products.

Although Green-e offers a valuable service to customers, companies that want to be eligible for California's Customer Credits for renewable energy must be registered by the Energy Commission and offer renewable power that meets Commission eligibility criteria. To be eligible for the Customer Credits, the renewable electricity you purchase must be produced within California and must not be utility owned.

Please note that not all renewable power qualifies for Customer Credits. For example, an electric service provider may offer a product that is 100 percent renewable, but possibly only 50 percent of it meets the Energy Commission's criteria for customer credits. Your electric service provider can tell you if it is able to offer customers credit through the Energy Commission's program. You may also call the Renewable Energy Call Center toll free in California at 1-800-555-7794 or (916) 654-4058 outside California.

The California Public Utilities Commission discontinued direct access, which allowed customers to choose their electricity supplier. Those who were already receiving electricity from a renewable electricity provider could continue with that provider, but no new customers could be signed up.


CUSTOMER CREDIT SUBACCOUNT - PAST CREDIT LEVELS

The customer credit was a cent per kilowatt-hour (¢/kWh) incentive that helped offset the higher cost of renewable energy. The credit was funded from the Customer Credit Subaccount of the California Energy Commission's Renewable Energy Program. Customers previously with Pacific Gas and Electric Company, Southern California Edison, San Diego Gas & Electric, or Bear Valley Electric Company, and who had switched to a registered renewable electric service provider that sold renewable energy, were eligible for the customer credit.

The Customer Credit Program was discontinued as of April 1, 2003.

Past Renewable Energy Customer Credit Levels
 
TIME PERIOD CREDIT LEVEL
January 1998 - November 1999 1.50 ¢/kWh
December 1999 - June 2000 1.25 ¢/kWh
July 1, 2000 - December 31, 2000 1.00 ¢/kWh
January 2001 - December 2001 1.0 ¢/kWh
January 2002 - March 2003 1.0 ¢/kWh

Page Last Updated: June 3, 2003