Companies like "green mountain energy" and "ethical electric" want you to help the environment with their product, but they are really just pocketing your cash! If you want to influence green electricity construction in NYC, go to my Electricity page.
These electricity providers are bad deals for the following reasons.
Electricity is like the air you breath. While air tends to mix together around the world, its clean in some areas, but dirty in others. Air tends to be more polluted in cities and less polluted in the countryside. Electricity in NYC happens to follow the same pattern, and ever since the Indian Point nuclear power plant was closed, it is now mostly natural gas. Then how are these companies selling green electricity to your apartment? They aren't!
They can't change the electrons that get to your house, but they can sell you the rights to clean electricity produced in other places.
Remember the whole NFT craze? You buy the rights to something but not the picture itself? Well a "Renewable Energy Credit" is essentially the rights to the "cleanliness" of the electricity. The electricity itself is sold separately.
In NYC, you can buy your electricity separately from Con Edison. Con Edison only maintains wires, they don't run power plants. Power plants have large contracts with intermediaries who can produce power for large organizations and they in turn can sell this electricity to you.
NYC allows Renewable Energy Credits to be sold with your contract to buy electricity from power plants (aka "bundled RECs"). Unfortunately, the RECs don't have to be from the electricity you purchase.
The dirty secret is that these companies buys gas generated electricity for your home, then sells you RECs from upstate and texas. None of those credits come from electricity that can get into your apartment!
The state created a new kind of REC, a "Tier 4 REC" that says the cleanliness is produced or imported directly to nyc. 2 projects are producing these, but you can't buy them!
So why did anyone think it would be a good idea to bundle RECs with your electric purchase? The most pure of intentions was that it didn't matter where the electricity was produced, as long as companies were making more money from building solar panels, selling the RECs would increase renewable energy construction.
For example, if buying a solar panel is the best thing to do for the environment, and getting an electric car is the 2nd best thing to do, then what should I do after I already have solar panels on my house? Buy solar panels for someone else! And then once everyone has solar panels, then it makes sense for me to buy my electric car, right?
Unfortunately, this doesn't hold up in the real world. Imagine you want to clean air in the polluted city, so you decide to plant more trees in a forest in colorado. Wait a second...
This analogy holds up to the REC market in texas, much like the forest doesn't need more clean air, Texas and Upstate New York have more RECs than they can sell, there is an oversupply of clean electricity, and the RECs are so cheap, that they don't impact development. It doesn't really change the economics of solar panels.
This is what makes these "green" electricity companies really evil, they sell you CHEAP RECs, but they give you a really expensive electric rate. They buy cheap gas on the electric market, cheap RECs in oversaturated markets, then sell it to you for a lot of money, and then they pocket the difference and it doesn't even go to the solar developers!
At best their practices are extremely misleading, but doesn't this sound like a scam?
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