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Voluntary Green Pricing Programs
1. What is voluntary green pricing?
Traditionally, customers receive their power from the local utility and the power is generated by a range of different sources such as coal, natural gas, nuclear, and renewable energy. Voluntary Green Pricing (VGP) allows a customer to voluntarily specify a certain amount of electricity purchases to be from renewable energy resources. This is also known as green pricing programs. The costs of the programs are billed to participating customers.
2. What is renewable energy?
Renewable energy is defined as power generated by a resource that is replenished within a human timeframe. In Michigan, renewable energy is primarily generated from wind, solar, water (hydroelectric), woody biomass, municipal waste and landfill gas.
3. Are all utilities in Michigan required to offer customers a VGP program?
Yes. Section 61 requires utilities regulated by the MPSC, municipal utilities, cooperative utilities and alternative electric suppliers to offer VGP programs to customers. The MPSC reviews and approves VGP programs for utilities regulated by the MPSC, not municipal utilities, cooperative utilities or alternative electric suppliers.
4. Where can I find information about utilities’ VGP programs?
For regulated utilities, information may be found on the MPSC website under the Green Pricing Programs or in each utility’s filed request in the case docket. Information for non-regulated electric providers’ programs can be obtained by contacting each electric provider.
5. Are customers required to participate in VGP programs?
No, VGP programs are voluntary. A customer who wishes to participate enters into an agreement with the utility.
6. Who can participate in VGP programs?
Nearly all customers can participate in VGP programs whether it is a residential customer renting an apartment or owning a home or a large industrial customer. However, participation criteria will depend on each individual utility’s VGP program offerings. Generally, customers that are served by an alternative electric supplier cannot participate in the local utility’s VGP program and instead would need to work with their supplier.
7. Who pays for VGP programs?
Since VGP programs are voluntary, only program participants will be charged using a cost of service formula, which means non-participants will not subsidize VGP programs. Participating customers are responsible for increased costs of the programs, but also realize savings if costs of the program decrease.