The Federal Trade Commission will not investigate allegations of deceptive trade practices by Green Mountain Power, but urged Vermont’s largest utility to be more clear about how it advertises renewable electricity in the future, according to a letter sent to the company last week.
A September complaint by the Environmental and Natural Resources Law Clinic at Vermont Law School cites more than a dozen examples where they say Green Mountain Power told customers electricity from wind and solar projects was “renewable” when it had sold the legal rights to make the claim.
The utility sells renewable energy credits, or RECs, which represent the environmental attributes of the power, to out-of-state power supplies for nearly all its renewable energy generated in Vermont with the exception of hydropower. Much of the money, totaling $30 million for Green Mountain Power, is used to reduce rates.
The law clinic said Green Mountain Power told customers much of this power was renewable when the RECs were sold. The clinic said this was a deceptive trade practice.
The utility denies the allegations, arguing the claims about the Kingdom Community Wind farm in Lowell, for example, were made before the project was built. Green Mountain Power is a regulated monopoly and does not have an incentive to market its power, it said in an Oct. 14 letter responding to the petition.
The FTC letter states, however, that utilities must be clear about how they will market their power during the siting, construction and operation of energy generation projects. It also said even retail customers who don’t choose their utility may want to change their consumption habits based on their electricity.
“Although no findings have been made that these claims violate the law, we urge GMP in the future to prevent any confusion by clearly communicating the implications of its REC sales for Vermont customers and REC purchases,” the letter states.
Kevin Jones, a professor of energy technology and policy at Vermont Law School, who was involved in the complaint, said the letter was a victory for transparency.
“I honestly believe that Vermonters care about climate change – and support paying more money for electricity that is cleaner,” he said. “I think this is a good step forward for there to be more transparency for the Vermont consumer.”
Though the commission decided not to open an investigation into the utility’s marketing practices, it said previous “unqualified claims” about the power it sells to customers “raise concerns” about its so-called “Green Guides,” which are used to regulate environmental claims about certain products. The FTC’s enforcement division reserves the right to take further action if necessary, the letter states.
“I’m happy with this because I think they put GMP on notice. I think they put all of Vermont’s utilities on notice. Anyone that makes misleading statement in the future won’t have the types of excuses that GMP is making here,” he said.
Kristin Carlson, of Green Mountain Power, said the utility was pleased the commission did not open an investigation. She said the letter indicated the FTC “rejected” the clinic’s claims as “meritless.”
The company posts a chart of its power supply portfolio on its website, before and after the sale of RECs. However, Carlson said the company will continue to work hard to communicate regularly and effectively with customers about its power.
“We always want to be clear and open to customers,” she said. “To the extent that the FTC is offering us areas where we can improve, we appreciate that.”
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