US firms issue RE buyers manifesto

Eleven US firms have issued so-called corporate renewable energy (RE) buyers’ principles they say frame the procurement challenges large businesses face in a marketplace struggling to provide cost-effective project opportunities on favorable terms.

“We developed these principles to help facilitate progress on these challenges, and to help add our perspective to discussions underway across the country on the future of our energy and electricity system,” they say in a communique.

Sixty percent of the largest US companies have set public climate and energy goals to increase their use of RE. They are doing this “because reducing energy use and using renewable energy have become core elements of business and sustainability strategies,” it continues.

Yet, even though businesses are actively and successfully adding RE to their own facilities and entering into contracts to buy or invest in offsite solar, wind and other sources, they still need millions of megawatt-hours to meet their goals, it adds.

The 11 firms include blue-chips Hewlett –Packard, Intel, Johnson and Johnson, Proctor and Gamble, Sprint and Wal-Mart. The others are privately-held Mars, the world’s largest candy maker, and Bloomberg, a Recharge competitor; General Motors; REI, an outdoor gear supplier whose former chief executive is Interior Secretary Sally Jewell, and Novelis.

The companies were convened by the World Resources Institute and WWF.

The principles include:

-Greater RE procurement options choice to meet business and public goals.

-Need for cost competitiveness between traditional and RE rates. With direct procurement, companies would like to buy RE that accurately reflects the comprehensive costs and benefits to the system. “Many of us are willing to explore alternative contract arrangements that can bring down the costs of capital,” the communique says, such as long-term deals with utilities and other suppliers to provide revenue certainty.

-More choices for fixed-price, longer-term power purchase agreements.

-Have the ability to promote new projects and ensure that purchases add new capacity to the system. One way to do this is by increasing access to bundled renewable energy credit products. Another is finding new market mechanism that enable greater voluntary growth of RE while maintaining accounting integrity. A third is to find ways to procure more RE from projects near company facilities so that benefits local communities and economies.

-Increase access to third-party financing vehicles as well as standardized and simplified processes, contracts and financing for RE projects. For some companies, PPAs and lease arrangements can be complex and costly since they are outside their core business functions. Simplifying and standardizing policies, permitting, incentives and other processes for direct procurement are high priorities for many firms.

-Opportunities to work with utilities and regulators to expand RE purchase choices. “We seek to purchase renewable energy that reflects the net costs and benefits to the systems, including the actual cost of procurement and benefits, such as but not limited to, avoided energy and capacity benefits, without impacting other ratepayers."