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Green Energy Claims Hard to Pin Down; Public Citizen Asks Governor to Investigate

Jan. 23, 2002

Green Energy Claims Hard to Pin Down; Public Citizen Asks Governor to Investigate

Public Citizen Got the Runaround From Telemarketers, Company Representatives Pitching “Green” Energy for Pepco Energy Services

WASHINGTON, D.C. ? Public Citizen is calling on Virginia Governor Mark Warner to investigate questionable telemarketing practices of Pepco Energy Services, which is pitching “green” energy to consumers but was unable to provide information about how the energy is created.

In addition, the public interest organization is asking the governor look into changing the state?s electricity deregulation law to address the lack of competition in Virginia. Public Citizen made the requests in a letter sent to the governor today.

“In many markets, power marketers attempt to sell well-meaning customers electricity at a higher price because it is allegedly produced in a more environmentally friendly manner,” said Wenonah Hauter, director of Public Citizen?s Critical Mass Energy and Environment Program. “While we are fully in favor of consumers having the option of purchasing renewable energy, we don?t want people to be taken advantage of by dishonest marketing practices.”

When Hauter heard recently of a friend who got a call from a telemarketer pitching Pepco Energy Services “green” power, she was intrigued. But when Hauter attempted to learn more from the company about its power source, she got the runaround.

She called the company?s toll-free customer service line more than a dozen times and was alternatively told that the ?green? power came from the sun, the wind or the water. One customer service manager said the energy came from “wind in California, solar in New York and biomass from somewhere else.” He then explained that it “goes to the Pacific grid in the state of Maryland, where different electricity is sectioned off from that grid” and pulled to Virginia.

Virginia law requires a competitive service provider to “provide in any advertisements, solicitations, marketing materials, or customer service contracts, accurate, understandable information, in a manner that is not misleading.” But there appear to be no penalties for violating this provision.

One telemarketer told Hauter that the energy came from a biomass plant in Arlington. Hauter called Arlington?s county clerk, but the clerk knew of no such plant in the county. Another time, Hauter was told she would have to request the information in writing. Eventually, a vice president of marketing told Hauter that the source of the power was landfill gas, but he couldn?t provide any more information because it was proprietary.

“Not only are these practices deceptive, but they likely will make consumers skeptical of renewable energy,” Hauter said. “We urge the governor to require Pepco Energy Services to provide truthful information to customers.”

Virginia enacted the Virginia Electric Utility Restructuring Act in 1999. It requires a phase-in of deregulation between Jan. 1, 2002, and Jan.1, 2004. On Jan. 1, 2002, statewide phase-in of electric retail deregulation began for all consumers in the following utility service areas: American Electric Power, Allegheny Power (Potomac Edison) and Conectiv (Delmarva Power). For Dominion Virginia Power, the largest utility in the state, phase-in began with residential consumers in Northern Virginia and a third of all non-residential consumers throughout its service territory. Pepco Energy Services is an unregulated subsidiary of Potomac Electric Power Company.

On Sept. 1, 2002, statewide phase-in of electric retail deregulation continues with Dominion Virginia Power?s residential customers in Central Virginia and another third of its non-residential consumers from throughout its service territory. On Jan. 1, 2003, statewide phase-in continues with Dominion Virginia Power?s residential customers in Tidewater, Va., and the last third of its non-residential consumers. All other consumers are scheduled to phase in on Jan. 1, 2004.

Please click here to view a copy of Public Citizen?s letter.