Sep 6 - McClatchy-Tribune Business News Formerly Knight Ridder/Tribune Business News - Margaret Newkirk The Atlanta Journal-Constitution

State utility regulators unanimously approved a lower premium Tuesday for the so-called green energy Georgia Power expects to begin marketing this fall.

The state Public Service Commission vote lops a dollar off the premium price the commission had approved three years ago, when the company originally said it would begin marketing green power.

Customers who want to buy renewable energy resources can do so in 100 kilowatt-hour blocks, converting all or a piece of their monthly power consumption to green. Each block will cost an extra $4.50 on top of the roughly $8.58 they would normally pay for that power.

For example, a typical household -- which uses an average of 1,000 kilowatt hours per month -- might convert one block to green power.

Its monthly bill would then go from $85.80 to $90.30.

Georgia Power suggested the reduction because of the shrinking price gap between some green energy and power produced the old-fashioned way, a differential that had also drawn the attention of PSC staff. Most of Georgia Power's energy comes from burning coal. The company's green program will sell energy from a DeKalb County landfill, which is expected to be producing energy from methane by October.

The cost of traditional energy fuels has gone up so much since 2003 that Georgia Power will be able to buy energy from the landfill at a cost almost on par with the cost of producing traditional power.

It's a fact that led one commissioner, Angela Speir, to push for an even deeper cut in the green premium customers will pay.

Speir argued that Georgia Power could cut another dollar off the premium and still make enough of a profit to fund expansion of the program.

The PSC rejected that further cut by a 3-2 vote. Commissioners Stan Wise, David Burgess and Doug Everett voted against commissioners Speir and Robert Baker.

The PSC also rejected by the same 3-2 vote a second Speir motion, which would have required Georgia Power to at least try to get national accreditation of its program.

The accreditation is "a no-brainer," said Speir, who said it would help sell the program. "It will enhance the program for many and detract from it for none."

Georgia Power has resisted the accreditation since 2003, when environmentalists criticized the company for considering a green power source that didn't meet nationally recognized standards.

The company says the commission would be relinquishing its own authority if it required the green program to meet standards set by a third party.

Green power is power from renewable resources. Those resources include the sun, the wind and water. They also include waste wood chips and other biomass materials and the methane produced by trash buried in landfills: The methane would contribute to global warming if not burned off.

The DeKalb County landfill meets national accreditation standards.

It also costs the company just a fraction of a penny more per kilowatt hour than traditional power sources, and is expected to cost less than those sources in a few years.

That means Georgia Power's expenses for the green program -- at least initially -- will be largely marketing and advertising, not the cost of boutique energy: The company plans a multimillion-dollar advertising campaign when it goes green.

The campaign is intended to attract customers.

But the company isn't counting on attracting them in large numbers, at least according to the estimates used to set the green premium price.

In 2003, Georgia Power estimated that 1 percent of its customers would decide to buy its green product.

The company estimates that less than 0.4 percent of its customers will buy green, according to a PSC staff analysis.

Nationally, utilities sign up 1.5 percent of their customers under green programs, according to the staff analysis.

Utilities that spend what Georgia Power plans to spend on advertising sign up almost 7 percent of their customers.

A higher participation estimate would allow Georgia Power to charge a lower price.

The company says its price will allow it to pay its advertising expenses, buy power and collect a reserve that will allow it to contract for additional green power sources if there's demand.