A startup nonprofit group wants to be the first company in Rhode Island to offer customers a “green choice” when buying electricity.
People’s Power and Light is more of a concept than a company: It has no office and no staff. But it does have a thumbnail sketch of a business plan, and its eight-member board of directors recently got some seed money from the Rhode Island Foundation.
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The $28,000 grant will help pay for an executive director. By the end of next year, the firm hopes to begin signing up new customers to buy environmentally friendly green electricity, which is generated from renewable sources like wind, solar or small-scale hydro rather than fossil fuels.
“The environmental community had hoped one of the advantages of (electricity) deregulation would be that consumers would get a green choice,” said Erich Stephens, a board member of People’s Power and Light. “It hasn’t happened in Rhode Island, so we’re acting to bring that choice to Rhode Islanders.”
Although its business plan isn’t finalized, Stephens said People’s Power and Light likely would buy electricity from a renewable-energy supplier and then resell it to residential and small-business users. Customers still would pay Narragansett Electric for transmission and delivery, but would pay People’s Power and Light for the generation costs.
The group’s organizers – mostly environmental and consumer-advocacy groups -are modeling the company after nonprofit, renewable-energy suppliers in Connecticut and Massachusetts. Hartford-based Connecticut Energy Cooperative, for example, last year became the first company ever to switch Connecticut residents off the state utility’s standard offer.
The cooperative supplies about 2,000 residents and small businesses with green electricity by purchasing power directly from renewable generators – including a small-scale hydro facility in Pawtucket. Its other generation sources include wind farms in Vermont and New York and methane gas from landfills in New Hampshire and Massachusetts.
The cooperative’s customers pay 6.5 cents per kilowatt hour, or about a penny more than the state utility’s standard offer, according to Robert Maddox, marketing director for Connecticut Energy Cooperative and also a former state legislator.
“The average household spends about 25 cents more (than the standard offer) a day,” Maddox said, or about $91 a year.
Stephens said People’s Power and Light envisions offering a similar service, adding that Connecticut Energy Cooperative is “two or three years ahead” of the startup. He said one option initially might be to sign up new customers and contract with the Connecticut cooperative as the supplier, essentially acting as its marketing arm in Rhode Island.
“It might make it easier to get things going quickly and start signing up customers sooner,” Stephens said.
He estimates that People’s Power and Light needs about $100,000 over the next year to fund operations.
The firm hopes to take advantage of a program offered by the Rhode Island Renewable Energy Collaborative, a coalition that includes Narragansett Electric, the Conservation Law Foundation, The Energy Council of Rhode Island and several other groups.
The collaborative recently set aside $1.75 million for a “green-power incentive program” that would entice retail electricity suppliers to offer green power to residential and small-business customers. Suppliers would get a $125 rebate for every new residential customer they sign up and $250 for every new small-business customer – potentially a substantial revenue stream for People’s Power and Light.
“That’s something we plan to go after aggressively,” Stephens said of the incentive program.
The group also plans to organize home heating-oil buying pools as a way to build its membership and generate some revenue by taking a small cut for forming the buying group. The firm plans to organize the heating-oil purchasing group within a year and begin offering green electricity shortly thereafter.
