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Customers Willingly Pay More for Wind-Generated Electricity

January 1, 1997

TRAVERSE CITY, Mich. (AP) _ Dick Dell’Acqua says he believes in doing business the environmentally friendly way, even if it costs a bit more.

So when the local utility sought volunteers to pay extra for power generated by a windmill, Dell’Acqua signed up.

His Omelette Shoppe & Bakery became a leading sponsor of the project, described by the American Wind Energy Association as the nation’s biggest electricity-producing wind turbine.

It’s also the first wind power project to be financed by a voluntary surcharge on electrical customers, says Ed Holt, a utility industry consultant who publishes a newsletter on such ``green rates.″

The monthly electric bill for Dell’Acqua’s eatery jumped from roughly $1,600 to $1,900.

``When we got our first bill, I said, `Holy smoke,‴ he said. ``But this is cleaner energy ... and it kind of goes along with the whole idea of trying to be a better steward.″

The 160-foot-high, 600-kilowatt windmill was installed in June in an alfalfa field a few miles west of Traverse City.

Positioned atop a bluff where breezes off Lake Michigan average 14.5 mph, the machine is expected to produce 1.2 million kilowatt hours of electricity a year, enough to supply about 200 homes.

To pay for the project, 145 residential and 20 business customers of city-owned Traverse City Light & Power accepted rate increases of 17 percent to 23 percent. For the average residential customer, that’s an extra $7.58 a month.

Along with power, the windmill is generating excitement nationwide among advocates of renewable energy. They say it represents a new concept in environmentalism _ the green rate.

``It really puts the onus on the customers,″ said Randy Udall, director of the Community Office for Resource Efficiency, a nonprofit group based in Aspen, Colo., that promotes green pricing in that state.

Environmentalists ``have always kind of banged up utilities and businesses,″ Udall said. ``But here’s a way for us to step up ourselves and make tremendous cuts in air pollution, acid rain, greenhouse gases, all that stuff.″

Green pricing debuted in the United States in 1993, said Holt, who publishes his newsletter in Harpswell, Maine. The Sacramento Municipal Utility District in California asked customers for an extra $4 per month to have solar panels atop their houses.

About 10 green pricing programs for electricity are in place and two dozen more are in the works, Holt said.

Some simply ask customers to contribute regularly to a fund for renewable energy projects. Another model was introduced this year by Detroit Edison, which began operating a solar-powered generator near Ann Arbor and sells 100-watt blocks of electricity from it for $6.59. About 200 customers have signed up, Detroit Edison spokesman Scott Simons said.

Utilities across the nation are exploring green pricing to finance alternative energy projects, said Chuck Linderman of the Edison Electric Institute, a trade association for investor-owned utilities.

``Whether it will sweep the country, it’s too early to tell,″ said Linderman, the institute’s director of renewable energy programs. ``But I think it’s going to be more than just a novelty.″

The Traverse City green rate was the brainchild of Steven Smiley, a local consultant who advises businesses on reducing energy costs. Convinced that the area was ideal for wind power, Smiley approached Chuck Fricke, then executive director of Traverse City Light & Power, about putting up a wind turbine.

Fricke said the utility was pleased so far with the project. If it continues to be successful, the company may consider a second turbine.

Fricke said that when Smiley suggested the windmill project, he agreed to back it if it wouldn’t require a rate increase for all 8,000 customers. With the volunteers paying the green rate surcharge, plus a state grant and federal tax incentive, the project went ahead.

Electricity from the windmill doesn’t go directly to the volunteers’ homes and businesses; it simply becomes a part of the utility’s power grid.

Nonetheless, Fricke said, participants can rightfully say their electricity is wind-generated. Each residential green rate customer saves the equivalent of three tons of coal, he said.

Businesses can offset some of the cost by publicizing their participation in hopes it will draw customers. Dell’Acqua said that was one reason he took part.

``It gives us a little higher profile, shows that we’re doing our bit to be good citizens,″ he said.

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