Many states (like DC, MD, PA, etc) nationwide have gone through energy deregulation, meaning that you can now choose your electricity (or gas) supplier. Because of deregulation, there are several options available when it comes to powering your home or business, one of which is clean electricity. Renewable power companies (solar, geothermal, wind, etc.) scattered all over the USA produce clean electricity that is available for green enthusiasts everywhere. This clean electricity cannot be efficiently transported nationwide on a separate grid for specific paying customers, due to the long distances. Also, each electron generated from a clean source cannot be tracked individually once it goes into the national electric grid. So how can someone use clean electricity if they don’t have a clean power source nearby? Say hello to the Renewable Energy Certificate (REC). This tool was created through the EPA’s Green Partnership program. For more details on RECs check out this EPA.gov white paper [.pdf]), but we’ll give you the gist of it here.
What’s a REC?
So if you want to use clean renewable energy to power your home or business, and you can’t use solar panels, or geothermal, or wind turbines, etc. you can simply buy RECs from a supplier to cover your electricity usage and call it done. RECs are sold at a dollar-per-kilowatt-hour ($/kWh) rate that can be very competitive to your current energy supplier’s rates. There is absolutely no additional equipment needed, and you’ll still have the same electric grid reliability you’re used to! Because RECs are purchased through a one or 2-year contract, you’ll know exactly what your electricity rate will be for the duration of the contract, and more importantly, you’ll know that your electric bill payments go directly to fund more renewable power sources, like that wind farm out in the midwest. Basically, your current electricity provider will take your money and buy the amount of electricity you consumed for the month, from a clean power source, on your behalf.
What will my electric bill look like?
You’ll still get the same bill from your electricity provider, but here’s what changes: the generation and transmission costs are now taken care of by the clean RECs you purchased, while the distribution is still handled by your electricity provider. Think of it this way: the power generated by the wind farm, and the transmission of that power over huge electricity towers near highways is accounted for in the cost of the wind REC. The distribution of that power to your local neighborhood is taken care of by your existing utility.
Looking at my regular PEPCO electric bill for July, for a total of $961 kWh of electricity, I paid $52.31 for distribution, $111.62 for generation, and $3.38 for transmission, a total of $167.31. Hypothetically, had I switched to a 1-year contract of 100% wind power through wind RECs (at a fixed rate of 0.105 $/kWh), I would have paid $100.91 for generation and transmission, and the existing $52.31 for distribution, a total of $153.22.
Applying these calculations to a 1-year contract, I could have saved about $164 per year! So why wouldn’t anyone want to do this again??? The process to switch is very simple, and it doesn’t cost you anything… well, except 5-10 minutes of your time 
Tags: RECs, Renewable Energy Credits, wind farms, Wind Power
