Frequently Asked Questions
What is clean energy?
Clean energy is considered to be “environmentally” clean – meaning it is typically non-polluting. It is commonly used interchangeably with green energy or renewable energy. Energy consumers will purchase clean energy to help reduce the environmental impacts from their consumption of conventional energy and to support further development of clean energy resources.
What types of power generation are included?
Renewable clean energy is generated by the sun, wind, earth, and water. These resources replenish themselves naturally. Some low-impact hydro facilities as well as geothermal and biomass facilities may be considered renewable. Renewable energy can be accessed right here at home, which reduces our dependency on foreign oil and increases domestic economic opportunities.
How do I know the clean power I am purchasing is really creating an environmental benefit?
The Healthcare Clean Energy Exchange requires third party, nationally accepted standards and verification (Green-e) for both the clean power and renewable energy credits our members want for their facilities. The standards require a clean “chain of custody” from the clean energy generation facility to the customer. You can read those standards at Green-e. We can also work with you to create custom standards for your RFP to meet your particular needs. All suppliers review and agree to abide by these standards or they can’t participate in an Energy Exchange auction. We will work with you to make sure the proper wording and standards are used to ensure supplier and product integrity and reliability.
In the case of Renewable Energy Certificates (RECs), (aka Green Tags, Green Certificates, Clean Energy Certificates) the standards require certificates to represent new clean generation that would not otherwise exist or be built without the RECs being sold.
Adapted from MTC’s Renewable Energy Trust
In some states, the best indicator of how much a purchase will contribute directly to the development of more renewable energy is the percentage of the product that is classified as new. New renewable energy facilities are generally considered to be those created after 1997.
Many states have Renewable Portfolio Standards, which require all electricity suppliers (utilities) to get a gradually increasing percentage of the electricity they sell from these new renewable energy facilities. This increasing demand should lead to the construction of additional renewable energy facilities.
When a consumer purchases new RECs, those RECs are retired. Because these purchased RECs have been taken out of circulation, electricity suppliers can’t use these same RECs to fulfill their legal obligation under the Renewable Portfolio Standard. They then need to get RECs from other renewable energy facilities. One goal of voluntary clean energy programs is for more renewable energy facilities to be built than the Renewable Portfolio Standard requires.
Currently, because of a shortage of renewable energy generating facilities, energy suppliers are having difficulty obtaining a sufficient supply of new RECs to meet their obligations. In a situation like this, some Renewable Portfolio Standards require them to make an Alternative Compliance Payment (ACP) which will be used by the issuing state to help develop renewable energy facilities. Because of the difficulty of siting and financing renewable energy power plants in some regions, it can be hard to know how soon a given renewable energy facility will be built due to any particular entity’s RECpurchases. Yet, at a minimum, a purchase of new RECs increases the amount of money the state will have to spend through the Alternative Compliance Payment fund.
The purchase of new RECs remains considerably more likely to lead to increased renewable energy generation than “old” RECs. Consumers should therefore consider the percentage of new RECs in the renewable electricity products they purchase. The higher the percentage of new RECs, the more the consumer is helping to spur clean energy development.
How much extra does clean (green) power cost?
It varies. Just as power prices fluctuate so does the cost of buying clean power. The competitive nature of the auction has driven some suppliers to provide clean power at little or no premium compared to “brown” or 0% clean power. We can run multiple auctions to test the pricing of varying levels of clean energy, just as we can run multiple auctions for different terms such as contract duration, payment schedule, etc.
Can I buy clean natural gas?
There is no clean natural gas sold, but the Exchange can help you determine your gas purchase’s impact on the environment and then purchase natural gas bundled with third party verified carbon offsets (learn more at Green-e) to reduce your carbon footprint.
My facilities are in a regulated state, but I wish to buy clean power. How can the Exchange help?
As previously mentioned, the Healthcare Clean Energy Exchange can enable you to get Renewable Energy Credits (a.k.a. green tags, RECS, or Certificates) at the best possible prices.
How do I know that the clean energy or renewable energy certificates I’m buying haven’t been sold to somebody else?
There are third party verification/certification services such as Green-e available to support quality assurance through supplier qualification and rigorous environmental and consumer protection standards as set out by the FTC and National Association of Attorneys.
What information do I need to gather and provide to begin the process of using the Exchange for our energy procurement?
To begin the process you should gather the following:
- Annual electric power consumption in kWh
- Annual natural gas consumption in therms, if this is an energy commodity used by the hospital
- Contract termination dates for both electric power commodity and natural gas commodity
Am I obligated to take the lowest price? What if I don’t like any of the bids?
There is no obligation to move forward and you are free to choose whichever supplier and price you like best. Hardly ever does someone choose a price other than the lowest bid, but it can and does happen. Sometimes a slightly higher price with a different duration or payment term (e.g. 90-days for payment) is a better choice.
The Exchange would be conducting a lot of work for nothing if members were unhappy with our results, because our (modest) costs only get covered when members are satisfied and sign a contract with a supplier. There is no charge for an auction or monthly fees, regardless of your decision to move forward or pass.
