An article online at the Wall Street Journal (free!) provides a quick overview of green power options available to retail customers. Typically consumers pay a small premium for green power, but in Austin consumers participating in the GreenChoice program actually gain a small discount. (Higher natural gas prices have driven up the cost of the utilities standard product.)
Utilities commonly charge a set premium above the price of conventional energy, so the price a customer pays for, say, wind energy is tied to what the company charges for energy generated by natural gas or another nonrenewable source. In some cases, though, utilities set prices independently for green energy, so they aren’t affected directly by fluctuations in the market for nonrenewable sources.
The average premium charged by utilities has dropped about 10% annually in recent years, according to Lori Bird, a senior energy analyst at the National Renewable Energy Laboratory. Many utilities, she says, attribute the decline to a combination of factors, including their ability to renegotiate power-purchase contracts at lower rates amid increasing competition among renewable-energy suppliers. Also, increases in natural-gas prices have reduced the spread between the costs of conventional and renewable energy, so a smaller premium for the customer is justified.
Not an in-depth article — no attempt to sort out the underlying subsidies* or effects of various state renewable energy laws, for example — but a useful introduction to the topic.
*Of course, most stories reporting on high oil, gasoline or natural gas prices don’t report on the effects of taxes, subsidies, or misguided government policy either. (Or, for that matter, the effects of guided government policy.)