Clean Energy and Utility Restructuring:

Real Issues, Straight Facts

Electric utility restructuring and green power marketing are important and complex. Unfortunately, Jon Entine's piece (Green Shell: Clean Power's Dirty Secret in the June Progressive Populist) fails to do justice to these matters.

Mr. Entine suggests that environmental and clean energy advocates have joined in an unholy alliance with the forces of dirty energy. In truth, we are a community united by common objectives and beliefs, and operate far more cooperatively than Mr. Entine suggests.

Our tradition of mutual support and assistance is demonstrated on a daily basis in specific actions and positions taken in restructuring debates and proceedings across the country. Through respectful discourse and even healthy disagreement, we have formed a community of purpose and belief that has given clean energy and consumer protection concerns a prominent place in the electric utility restructuring debate.

Mr. Entine also attacks market-oriented strategies for obtaining positive clean energy results. For decades now, governments at all levels have handed out huge subsidies for dirty power, for the coal and nuclear industries.

The regulatory game, too, is rigged against clean energy in many fundamental ways. Over many years, clean energy advocates have championed and instituted a variety of policy and advocacy tools aimed at the result of moving sufficient funding and fair market opportunities toward clean energy development and use in this country.

Bolstered by strong evidence of public support for clean energy, advocates of market-based approaches are partners in this effort. Over the last 20 years, numerous polls, studies and pilots have demonstrated phenomenal support for greater investment in and development of clean power. Clean energy may well fare better in free markets than in the highly rigged regulatory regimes.

We focus our efforts on getting restructuring right when it does occur, and in ensuring fair competitive markets emerge. We trust the American public to make the right choice for the environment and for the future if they are given the chance.

We realize better than Mr. Entine that there is no magic in the words "free market" or "competition." So we work on creating truly free markets and truly fair competition, with appropriate regulatory safeguards and supportive clean energy policy, as tools for getting us to a sustainable energy future.

Markets are messy, and abuses do occur. Long before Mr. Entine took up the cause, EDF joined with the Center for Science in the Public Interest in condemning the false and misleading advertising of Connecticut Light and Power Company through its marketing arm, Northfield Mountain Energy, in the recent New Hampshire pilot. We will continue to raise public attention to such deceptive claims in the future.

Mr. Entine, however, goes too far when he attempts to suggest that the green marketing has been a "fiasco" exploding "like a bombshell." For example, EDF is working with ReGen Technologies, a new green power marketer, to build a green power business that delivers superior environmental benefits in products offered in competitive markets.

ReGen Technologies is a division of AllEnergy, Inc., which in turn is a joint venture between New England Electric System and Eastern Enterprises. Far from a "fiasco," our cooperative effort has been recognized by advocates as an example of the positive benefits of new alliances in energy markets.

Mr. Entine's vituperative against Working Assets, on the other hand, alleges that the company falsely claimed to be selling new renewable energy generation at "rock-bottom prices" that would not be commingled on the electric grid.

Examining the actual claims does not support this assessment. Of course, we would all like green marketers to build new renewable energy facilities to sell us this power exclusively and at prices far below market prices for electricity. Reality, however, must be considered.

The New Hampshire program was a very limited exercise. The limited duration and scope meant that the economics simply would not justify new construction of capital intensive facilities. Working Assets' approach was to enter into contractual arrangements with an established utility for a specific mix of existing resources, and to avoid nuclear, coal, and Hydro Quebec generation.

The companies in the pilot were all selling through the grid, where as a matter of simple physics it is impossible to differentiate electrons.

A useful analogy is a pool of water, with supply pipes pouring water in at one end, and customers taking water from output pipes at the other. The only way to ensure that you receive the actual water you purchase is by building your own pool. In electricity, the only way to ensure that you receive only renewable energy electrons is to build new dedicated transmission and distribution wires--hardly the efficient or environmentally preferable choice.

Furthermore, while some customers can afford this expensive operation, re-sellers like Working Assets used the flow of payments to give ordinary customers increased control over their purchases. This approach provides an option the regulatory world has seldom provided to the average residential customer--an opportunity to control where their money goes, and to express a financial preference for and against certain kinds of power.

In the end, the New Hampshire pilot established two things: customers want clean energy choices; and pilot programs are less than perfect settings for developing the green market.

We need sound policy and regulatory provisions to support clean energy. For example, one important mechanism advocates around the country have been supporting is electricity disclosure. The electric equivalent of food and nutrition labels, disclosure provisions would require factual labeling of electric products, providing information such as price, generation source, and pollution facts.

Because competition is about more responsibility as well as more choices for customers, customers in a competitive market must have basic information with which to make decisions. EDF supported legislation in Texas this year to require disclosure, and advocates in several states have also launched similar efforts. Disclosure is an empowerment tool we can all get behind.

We must also continue efforts for strong research and development funding to improve the cost effectiveness and performance of clean energy technologies, and for funding support to ensure that clean energy gets a fair start in energy markets. Several approaches are available, including a renewable portfolio standard and system benefits charges, and advocates will continue to work for their implementation. In fact, companies like Working Assets and ReGen Technologies have been strong supporters of disclosure and renewable energy funding.

We can have clean energy, through market as well as regulatory tools. We must have clean energy, because our environment and the health of generations to come depends on it. But the economic and political clout of the dirty and dangerous coal and nuclear industries in opposition is immense.

This is not the time for divisive invective, but for cooperation and alliance in what promises to be a long and difficult fight.

KARL R. RABAGO
Environmental Defense Fund
44 East Avenue, Suite 304
Austin, Texas 78701
email krabago@edf.org

EDITOR'S NOTE: Karl R. Rabago is an attorney and the Energy Program Manager for the Environmental Defense Fund (EDF). Rabago has served in the U.S. Department of Energy as Deputy Assistant Secretary for Utility Technologies, and as a Public Utility Commissioner in Texas during the administration of Governor Ann Richards.

Jon Entine's response:

Perhaps Mr. Rabago's rush to support his green marketing colleague results from EDF's own questionable marketing. For years, Bonneville Power Authority has been under a federal mandate to discharge water to protect fish, resulting in the generation of "clean" energy. Earlier this year, EDF came along and contracted to buy that already-generated energy, then reselling it to idealistic customers who have come to believe they are buying new green energy. They are not. Consumers are being forced to pay more for hydro-generated electricity that cost much less when BPA was the supplier.

Believe it or not, it's a provocative strategy. EDF is in effect charging consumers a green tax which it pledges to plow into environmental projects. The problem is not the goal or its rationale -- it is a risky strategy but surely one worth experimenting with -- but the means. EDF was not being straight with consumers who were being led to believe that the premium price would result in more "clean" energy being fed into the grid.

Did EDF lie to its customers? No, but it's been less than honest in its dealings with the press and public so far. In recent days, when EDF came under criticism from energy activists for consumer deception, Mr. Rabago replied lamely, "This is a real concern of mine ... however much of my concern is mitigated by the fact that no one except the environment is supposed to gain profits from the transactions."

In other words, it is okay to jack up the price to consumers who are buying "green" energy under false pretenses, as long as the profits are used at EDF's discretion to help the environment. Means justify ends. That's a slippery slope.

As Dilbert, the holder of the corporate giggle test, said best, "Remember, what we do here might seem like criminal fraud, but it's not. It's marketing."

To his credit, Karl Rabago and EDF have more integrity than that. Rabago and I have recently discussed this issue at length. Lo and behold, it turns out that he had never reviewed Working Assets' misleading brochures, before or since the controversy. We did agree on many things, including the need by EDF and other power marketers to clean up their marketing act.

Paul Joskow was on the mark when he said that you can't build a market on "fraudulent marketing" which is what, in my considered opinion, occurred in New England. At the very least, Working Assets and EDF are exploiting customers idealism by only telling part of a complex story.

The "community of purpose" Mr. Rabago cites is all well and good, but good intentions are not enough. The cause of increasing the flow of cleaner energy is best served through cautious deregulation, while mandating extensive disclosure, labeling and honest marketing. If these safeguards had been in place in New England, residents would not have gotten the run around from Working Assets and friends.

E-Mag Takes Exception

As the editor and publisher of E Magazine, we take issue with Jon Entine's characterization of our editorial discussions ("Green Shell: Clean Power's Dirty Secret," June 1997). In those conversations, we did acknowledge that Working Assets Long Distance (WALD) was an E advertiser, but we never told him we wouldn't print a story that included WALD. Instead, we told him we would consider a general piece about the green power issue. Our discussions were ongoing, ending only when Entine published his story elsewhere. We were concerned that Entine had a vendetta against WALD -- a suspicion confirmed when we read the one-sided attack printed in your magazine.

Entine seems obsessed with trashing green companies which, despite some flaws, are contributing to a positive social and environmental ethic. Entine would be making much more of a contribution if he focused his considerable energies on the mainstream corporate criminals who are laying waste to the planet.

Sincerely,

JIM MOTAVALLI, Editor
DOUG MOSS, Publisher
E Magazine
28 Knight Street
Norwalk, CT 06851
email: emagazine@prodigy.com

Entine responds:

E-Magazine writes: "Entine seems obsessed with trashing green companies which, despite some flaws, are contributing to a positive social and environmental ethic?"

Really? In May, editor Motavalli wrote: "I really would like you to do a piece for us ... I'm going to be doing some sort of green business story, and you could propose a companion piece for it that would in effect make it a special issue." In July -- this is AFTER its critical letter -- Motavalli writes: "I wanted to have you write precisely because I admired the exhaustiveness of your Body Shop piece." ["Shattered Image: Is The Body Shop Too Good to Be True, Business Ethics, September 1994, was awarded a National Press Club award for consumer journalism.]

What's the real issue? In March, E-Magazine ran, "Dialing for Dolphins: Activist Phone Companies Give to Cause and Reduce Rates" a thinly disguised promotional piece on the "socially responsible" company Working Assets, one of its biggest advertisers. E-Magazine is struggling and desperate for ad dollars (witness its July two-page spread purchased by Philip Morris). Motavalli would later admit that he had never scrutinized WALD's claims. "I genuinely thought they were the best and cheapest phone service out there," he wrote plaintively after reviewing the facts and realizing he had been had. "I have been a WALD customer for several years."

E-Magazine also charges:"We never told [Entine] we wouldn't print a story that included WALD."

Really? "I don't think we're going to run a WALD story," wrote Motavalli in an email. "I'm not going to have us end up like Garbage magazine," referring to the late periodical abandoned by "liberal" advertisers after it dared to report critically on "good guy" environmentalists.

Motavalli kept asking me for proposals. He was initially enthusiastic about green power until he found out WALD was its leading proponent. "I am looking for a story on green pricing," he wrote, "WITHOUT getting into a big thing about Working Assets ... We DON'T want a piece on WALD." [emphasis original]

In July, Motavalli proposed to withdraw his critical letter -- if I would agree never again to write about the conflict of interest involving E-Magazine and its advertisers, specifically Working Assets and Philip Morris. "Can't you see that E-Magazine is a struggling publication," he begged.

My responsibility is to his readers, not to his advertisers. I declined the bribe.

Obsessive-Compulsive Progressive?

As a user of Working Assets Long Distance service, I am bothered by the June cover story by John Entine. One of my reactions is to just give up trying to make any sense of living in this place and time. Another is to ask if there is anyone responsibly attempting to perform a "Consumer Reports" function from a Progressive Populist/ecology-aware viewpoint? I hear and read questionable information about various organizations (i.e. Greenpeace, Ben and Jerry's, publications) indicating dishonesty, greed, or other dominant-culture-like behaviors. I don't know how to respond without becoming a full-time obsessive-compulsive workaholic researching every little detail before I do anything from buying checks (or even using a credit union) and making a phone call to using some form of transportation. Your paper appeals to me largely because of your desire for a positive approach in response to the insanity. My problem continues to be information overload about the insanity and information deficit on what to do about it and how!

Another comment (from a friend): The information (in the PP) is great, but the format is very "heavy" -- needs more art/visuals, poetry, etc. Too "male-dominated". (FYI)

I remain very glad The Progressive Populist is out there and in my home! Thanks and keep up the good work. What phone service do YOU use?

CLARK GOSLEE
Cincinnati
Email: dgos@TSO.Cin.IX.Net
(no other address given)

EDITOR REPLIES: We try to present positive approaches and solutions when possible. If you know of progressive populist/environmentalist "consumer reports," let us know. We know we're a pretty grey paper and we'd like to run more art, but we usually have about a third more copy than we have room to put it in. It's a tough squeeze, but we will try to get more art in. As for male domination, all I can say is, we welcome all sorts of progressive and populist writers, women as well as men. And lastly, our long-distance service is AT&T, which at least is a union shop.

Fourth Estate Tax Builds Chains

The July editorial on the estate tax makes a good case for preserving the family farm; it's probably too late to do anything for the family newspaper.

As a lifelong newspaperman, I've worked on two newspapers, and seen or read of many others, that were swallowed up by such loathsome outfits as Gannett or the Freedom (!) chain because the second or third generation couldn't afford the estate tax. Not all those papers were good papers, but, bad as some of them were, at least they were locally owned and locally controlled -- unlike the lowest-common-denominator Gannett clones.

2) Delia A. Yeager quotes "Simple Gifts" in leading off her column, also in July. I think her lyrics are not quite right. The way I've learned it and sung it is

"And when we find ourselves in the place just right We will be in the valley of love and delight."

(The lines scan better.)

It's a Shaker hymn and dance tune, not an Amish folk song.

Keep up the good work

JIM ESTES
Alpha Farm
Deadwood, OR 97430

PS.: Dan Quayle will be the best President since Spiro Agnew.

The Decade of Delusion

Now that we are mostly there, I think the '90s deserve the title "Decade of Delusion", given:

-- The insane greed and arrogance of societal "elites", in a country founded on the principle of human equality.

-- The smug cynicism, manipulation and opportunism of political leaders; slight e.g. Bill Campbell (Atlanta Constitution 3/20) blaming the pollution of the Chattahoochee on the homeless pissing in storm drains.

-- The proliferation of brutish, trite, narcissistic, perverse and soul-dead TV "products".

-- The morbid, unquestioning obsession with market values, and sick corporate values, in place of human and communal ones.

-- The ceaseless promotion of the individual over the common good.

-- The accelerated, frantic, exhausting, automatic pace of life --in pursuit of what end?

-- The fostering of violent, combative and militant postures in personal and public life, in place of healthy self-assertion and mutual respect.

-- The general collapse of education. in favor of training.

-- The callous indifference to the loss of innocence, safety and meaning in the lives of children.

-- The substitution of money for justice, and imprisonment for social order.

-- The expropriation of Jesus Christ's name to promote vindictive self-righteousness, paranoid militarism and statism, gun ownership, homophobia and middle-class materialism.

-- And the loss of qualities like: gentleness, humility, respect, compassion, simplicity, courtesy, peace, understanding, patience, empathy, honesty, and especially, equality and justice.

Elijah was right to be a frightened man, given the living God's uncertain ways and the general appeal of the gods of Baal: a quiet domestic exchange offers none of the excitement of a multiple slaying, and a profusion of stars in the night sky is nothing to an orbiting McDonald's ad balloon.

Americans: a people too stupefied by their super-power-fulness and lost in their materialistic anomie, to see they've already induced the whirlwinds, floods and murder of the innocents. Induced, with their arrogant exploitation and neglect, the breakdown of the underclass, and spiritual diaspora of the whole.

It's past debate and speculation, and time to work -- from any position -- for sanity, justice, humanity and healing; to (re)gain some real serenity, and sense of purpose, before we face our own premature, and mis-appointed, exits.

Sincerely,

JOHN HECTOR
1602 Woodcliff Drive
Lilburn, GA 30247

Businesses Usurp Citizens' Responsibility

Allow me to draw your attention to the enclosed two-page ad from the Washington Post, which has to do with global warming. I point in particular to where the ad says, "At the Business Roundtable ... we have a responsibility to protect our environment for future generations."

This is a ruse, a bold one. For corporation heads to profess a responsibility to protect the environment is to intrude upon a right and duty of the citizenry. Yet this has been done for decades. It amounts to crashing the debate in order to fend off, delay and minimize any protection of the natural environment which runs counter to business imperatives.

What business big and small is about is making a profit from products or services. When in a given case a corporation, industry or group of industries perceives that reducing environmental damage will to any degree put its existence or short-term profitability in jeopardy, its top people are obliged to dig in their heels.

There is no disguising the conflict. Necessarily, almost everything corporation heads say or do in such circumstances is a means of stalling, opposing, or beating back others until minimum protection of the environment, where it means maximum protection of the company or industry, can be put into place. The Business Roundtable's ad in regard to global warming fits right in here.

In the face of inherently relentless business pressure, the exclusive right and duty of the citizenry to set policy in the environmental area through its elected representatives cannot be insisted upon too loudly or too often. To the extent this responsibility is met knowledgeably, honorably, tirelessly, and successfully, the making of environmental protection policy will be kept out of the hands of those who make protection necessary.

J.C. MALONE
Rt. 5 Box 290
Radiant, VA 22732
email jcmalone@summit.net

The Earth's People are More Liberal!

Not since the Great Depression of 1932 have we witnessed such a phenomenon.

Britain elects a labor party majority. France elects more socialist. Mexico ousts a government that has ruled for 68 years. India has elected a president from its lowest caste; the first time ever.

Liggett's CEO testifies in Florida that cigarettes cause cancer, heart disease, and emphysema, and are "very addictive -- for many people". Episcopalians elect a liberal as their new leader who teaches that sexual orientation is "morally neutral" and that faithful monogamous committed relationships among gays and lesbians are worthy of honor.

An ex-prostitute and madam of a massage parlor in Oak Grove, Kentucky is elected to the City Council there, confessing to the bribing of officials for three years who covered up the slaying of two of her employees.

A Dallas District Judge, trying the Catholic Dallas Diocese for juvenile sex abuses by their Reverend Kos, steps from her court bench and preaches love and forgiveness.

Does this portend that Jesus, a liberal, is returning to earth?

OTTO B. MULLINAX (Idion II)
11806 Cheswick St
Dallas, Texas 75218

Fruitful and Multipliable

Excited by your radical populist stand. Thank you for your commitment to the rest of us. May folks like you be really fruitful and multipliable. Go and replenish the earth with your hope and a good sense of what really matters to most -- people who fight against people who pick on other people.

RANDY BACA REYNOSO
Email: RANDYBACA@aol.com
(No address given)