Natural Gas Sellers Offer Users a Green Payment Option

May 3, 2007

Vancouver Sun

The deregulation of British Columbia’s natural gas market means consumers can use the fossil fuel to heat their homes and fight global warming at the same time.

Some newcomers to the B.C. residential gas market are offering one- to five-year contracts at fixed prices -- with the option to pay slightly more and have their new gas company direct the money to projects helping reduce greenhouse gas emissions.

The idea itself isn’t revolutionary -- electricity customers in several U.S. jurisdictions already have the option of paying slightly more for power to support green energy projects such as wind power. However, hydroelectricity-rich B.C. is apparently perceived as a hot spot for initiatives focusing on neutralizing the carbon dioxide emissions coming from residential natural gas heating.

At least two of the dozen-or-so gas supply firms that are looking to sell fixed-priced gas contracts in the newly opened B.C. residential market are offering to purchase carbon dioxide offsets on behalf of customers who want to pay a bit more for each gigajoule of gas they burn in their homes.

The market opened to competition on Tuesday, with Terasen Gas retaining its position as B.C.’s primary distributor of gas, while newcomers can now compete to sell the actual gas that moves through Terasen pipes to the homes of customers.

MXenergy CEO Jeff Meyer said his company commenced a soft launch of its carbon offset program six months ago -- it already has a market presence in 14 U.S states and in Ontario -- announcing it only to people phoning into the company’s North American call centre.

“We’ve saved the launch of the program for the British Columbia market because we know how sensitive to environmental issues the British Columbia market is,” Meyer said in a telephone interview.

The company is offering a $100 rebate, plus a chance to contribute to its “Earth Friendly Partnership” via a small contribution on each gigajoule of gas purchased on a three-year fixed price contract.

On a three-year deal, an MXenergy customer will pay $9.72 per gigajoule for gas -- a typical B.C. home uses eight to 10 gigajoules a month. That price is competitive with rivals, even without the eco-payment.

Some carbon credit schemes emerging in recent years to either mitigate carbon dioxide emissions -- or possibly consumers’ guilt -- have been criticized by academics, environmentalists and even government officials as having unidentifiable benefits, such as tree-planting in the Amazon rainforest or Mongolia.

But Meyer said MXenergy’s s “carbon offset” is easily verified -- the money goes to a Montana hardwood reforestation project.

“We wanted to make sure the project we sponsored was reliable, verifiable and legitimate.”

In addition, he said, the company is not charging customers the full cost of buying offsets. “We decided we would give up some of our profit in order to encourage our customers to come in and join us.”

Meanwhile, Direct Energy Canadian operations president Bob Huggard said in an interview his company has also chosen B.C. for the launch of its first North American “carbon-neutral” gas plan.

Consumers pay an extra 50 cents per gigajoule for gas purchased in one-, three-, and five-year plans, with the money going to purchase of what Huggard describes as “certified carbon emission credits.”