Green utility lowers its rates to match giant Texas competitor

By Sudeep Reddy, The Dallas Morning News Knight Ridder/Tribune Business News

Green Mountain Energy Co. is ratcheting up its battle for residential electricity customers, offering a renewable power plan pegged to the rates of TXU Energy.

Until now, consumers who wanted the company's pollution-free power plans had to pay several dollars more a month over TXU, the area's incumbent provider.

The new plan, a mix of hydroelectricity and wind power, means that consumers wouldn't pay more to switch to a pollution-free plan.

Green Mountain's move is the latest attempt by power providers to convince customers to switch. Almost three years into retail competition for electricity, TXU has kept more than 80 percent of its original residential customers.

Green Mountain has attracted the "early adopters" of renewable energy plans, said John Savage, the company's senior vice president of marketing.

But many customers may hesitate in choosing a higher-priced plan even if they would be helping the environment.

"They are sitting there, paying more than they have to, buying electricity that's dirtier than they have to," Mr. Savage said.

Austin-based Green Mountain still offers a plan for electricity generated entirely from wind for about $10 a month more than TXU's rates, known as the price-to-beat.

The majority of the new product includes power generated at hydroelectric plants. At least 10 percent reflects wind power.

Coal is used to generate about 44 percent of TXU's electricity, with 1 percent coming from renewable sources and the rest from natural gas and nuclear plants.

Due to rules governing the transition to full competition, TXU Energy can't offer electricity plans in its incumbent area other than the price-to-beat.

Houston-based Reliant Energy Inc. is the only other provider operating in North Texas to offer a renewable energy plan.

At times, the price of the plan has matched TXU's standard rates. But the company has called the similarity coincidental and hasn't promoted the renewable offering.

Reliant and most other providers also offer rate plans that are priced lower than those of TXU or Green Mountain. The lowest-cost provider, Cirro Energy Corp., charges about 15 percent less than the price-to-beat.

-----

To see more of The Dallas Morning News, or to subscribe to the newspaper, go to http://www.dallasnews.com .

(c) 2004, The Dallas Morning News. Distributed by Knight Ridder/Tribune Business News. For information on republishing this content, contact us at (800) 661-2511 (U.S.), (213) 237-4914 (worldwide), fax (213) 237-6515, or e-mail reprints@krtinfo.com. TXU, RRI,