The cost of going green is going up in Madison

From an article by Tom Content in the Milwaukee Journal Sentinel:

Madison Gas & Electric Co. is proposing to increase the surcharge paid by more than 11,000 utility customers who voluntarily pay a premium for green power.

Under green pricing programs, customers who want to buy renewable energy are charged extra. The power company then agrees to obtain that power by signing contracts for electricity from wind farms, landfill gas and other renewable electricity sources.

MG&E raised its surcharge in January and is proposing a bigger increase in 2011. For a typical residential customer using 550 kilowatt-hours of electricity a month, the surcharge rose from $5.50 a month to almost $7 this year, and about $11 a month in 2011.

In its application, Greg Bollom of MG&E said the cost of wind power isn't going up because "the fuel is free." But, he said, the gap between the cost of wind power and the cost of electricity from burning coal and natural gas has widened as the price of fossil fuel-derived power has dropped over the past year.

Concern about the environmental impact of fossil fuels has helped MG&E win national recognition for its green-pricing program.

MG&E ranked third in the country - behind only Palo Alto, Calif., and Portland, Ore. - in the percentage of customers that subscribe to green pricing, according to rankings published last week by the U.S. National Renewable Energy Laboratory.

But increasing the rate could have a chilling effect on the program, said Michael Vickerman, executive director of the advocacy group Renew Wisconsin.

"It's a 'heads-I-win-tails-you-lose' proposition that will wind up rewarding customers who drop out of the renewable energy program because coal is cheaper," Vickerman said. "It would be short-sighted to penalize renewable energy purchasers just because fossil fuel prices are in a temporary slump."