Creating Choice
Through Information:
Educating Consumers to Consider Environmental Impact
When They Purchase Electricity in a Deregulated Market
Hugh Jeffrey Brandt
This thesis report provides an introspective response to the progeny of deregulation. We are on the verge of sweeping change in the electric utilities industry. The new market economy forges change on many levels. For the consumer it creates an imbroglio of questions: How will household decision makers faced with an abundance of choices know which electric services to choose, which are "green" producers, and what is the true definition of green electricity? Without the guidance of the Public Utility Commission, who will review and control environmental impact from new power plant designs or proposals for alternative sources? How will we balance and curtail the new economic incentives that bolster use of aged power plants that are operationally low cost and highly polluting.
I respond to the new market conditions through an inquiry that is comprehensive in its scope, flexible and effective in its technique. The solution is non-regulatory, and depends on equipping consumers to ensure that the new scenario becomes an opportunity for influence, rather than a venue for confusion and distress. I propose a methodology to assess environmental degradation from energy producers, and a way to communicate the results to consumers. The physical manifestation of this work is the Energy Score Card, an environmental ranking of electricity providers from which consumers can perform their own cost benefit analysis, weighing environmental harm against concerns for environmental protection and the cost of each electricity offer. Individuals have the opportunity to create change through purchasing decisions by placing pressure on energy producers to retire or clean up old facilities, and design new low polluting sources of energy.
The discussion develops through the use of real case studies, three power plants whose differences in generation and sources of fuel, give a sense of the breadth of the environmental issues we face. Through the examples, the need for whole system thinking becomes evident. Unlike many studies which quote air pollutants only, the Energy Score Card comprises evaluations of entire fuel cycles: Human and ecological impacts of fuel extraction, transportation, combustion, generation, disposal of byproducts, electricity transmission, decommissioning of power plants, efficacy and success of energy conservation efforts, and the sustainability of each technology’s fuel reserves. The evaluations are both quantitative and qualitative, relying on a matrix format of scoring, instead of a dollar valuation. The matrix allows relative comparison of environmental impacts within each stage of the fuel cycle, a means to weigh impacts across the fuel cycle, and a summation equation which grades the results.
The ultimate goal of this project is to change industry incentives through consumer involvement in a way that keeps a check on environmental harm and provides a model for developing energy policy.