PG&E Cashing in on Climate Change
Utility Companies are cashing in under the guise of fighting climate change, and PG&E is leading the pack. TURN is demanding an end to wasteful spending by PG&E and other utilities, which routinely bulk up environmental programs with huge, unnecessary expenses for "administration and marketing." PG&E's ClimateSmart is the most recent example.
ClimateSmart offers customers the option of balancing their home's greenhouse gas (GHG) emissions with the purchase of carbon reductions acquired from a variety of projects certified by the Climate Action Registry. PG&E charges residential customers an average of $3 a month to participate, and all PG&E customers contribute to the costs of the $16.4 million program through rates.
The bulk of the money, $12 million, is devoted to marketing and advertising. PG&E initially justified the high marketing costs with claims it would jumpstart the program, create a national model, and entice 4.4% of customers to subscribe. Now in its third year, the program has only persuaded 0.6% of customers (other than PG&E employees) to subscribe. At this much lower level of subscription, PG&E has spent approximately $400 to attract each customer currently subscribing to ClimateSmart. At an average of $3 per month in fees, it would take a typical residential customer over 11 years just to pay for the marketing costs incurred on their behalf by PG&E.
In documents filed at the CPUC (California Public Utilities Commission), TURN warns that PG&E faces the prospect of continuing to spend more to acquire customers than it will be able to devote to purchasing greenhouse gas reductions. TURN staff attorney Matt Freedman says PG&E has "the right idea, but the wrong approach." According to Freedman, there are two things that can be done to stop ClimateSmart from becoming a cash cow for PG&E.
"PG&E hasn't burned through all of the money yet," Freedman said. "Instead of spending millions more to publicize the program, PG&E should simply use the remaining money to purchase greenhouse gas reductions on behalf of all its customers." In addition, "PG&E Corporation must follow through on a commitment to purchasing 1.5 million tons of reductions," a concession made in response to TURN's original demand that at least some of the funding for the program come from corporate profits if customer enrollments are below PG&E's projections.
Wasting money on green advertising instead of a real green agenda is nothing new for PG&E. TURN has also discovered that PG&E, Edison, SoCal Gas and SDG&E are wasting billions that customers have contributed to various conservation programs by inflating marketing and administrative costs.
"PG&E likes to paint itself as green, but its favorite kind of green is money," said TURN executive director Mark Toney. "Customer-funded programs should be delivering more green benefits to consumers, not putting more green in PG&E's pockets."
