Rationale
The results of this research are presented in the following section. Note that because we tailored the interviews to the participants' time and interests, the results present a general sense of the participants' attitudes and beliefs, rather than a precise count of their responses to each question. When percentages are cited, caution should be exercised in applying them to a more heterogeneous mix of business customers.
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Overwhelmingly, Traverse City's business customers said that they signed up for the green rate for environmental reasons. |
Probably the most important aspect of the research is an understanding of why business customers signed up for the green rate in Traverse City. Overwhelmingly, participants cited environmental reasons. In response to an open-ended question, respondents frequently said that they like the idea of generating electricity from a non-polluting resource. Several mentioned that they like renewable energy: in the words of one participant, "renewable energy makes sense." Several linked their participation to energy conservation. One customer, an architects' office, viewed participation as a social responsibility. One mentioned being ecology-minded and linked her participation to helping offset impacts of tropical deforestation. Another had a more local perspective: "We live in an attractive environment and want to keep it that way." Several also mentioned diversifying their power sources, one specifically to shift production away from coal and another to reduce dependence on overseas oil.
Perhaps the most interesting rationale offered by several respondents was the desire to show business leadership in the community. As one interviewee put it, "It's a chance to be visible as a business in the community. Our support means something." However, most respondents said that their decision to participate was a personal decision rather than a business decision. Because of the size of their enterprises, small business owners can easily make business decisions that reflect their personal philosophy without having to convince a corporate hierarchy.
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In many cases, the cost of the green rate was a consideration, but not a significant factor in whether or not the business participated. |
In many cases, the cost of the green rate was a onsideration, but not a significant factor in whether or not the business participated. For some customers, cost was not a factor at all. In fact, no one interviewed said that it was very important. The primary reason interviewees gave was that they are small electricity users and therefore have low electricity bills. Most of the participants made no effort to calculate the added cost they would have to pay, relying instead on the utility's word that it would add about 20 percent to their bills. One participant said, "Of course, cost could not be ignored" but "I wanted to put my money where my mouth is." A few mentioned that they pay the green rate at home, too; others said that they could not afford to pay the rate as residential customers. Note that businesses, unlike residential customers, may deduct the cost of electricity as a business expense.15
In their interviews, two businesses who guessed the amount they will pay overestimated by far the actual cost. One estimated that she will pay an additional $20 per month; in reality, she will be charged about $5 per month more. The other customer guessed that he will pay an additional $300 per year, while his bill suggests that he will actually owe an additional $81 per year. These responses indicate that a few businesses would be willing to pay significantly more for this program than it now costs.
Several customers mentioned long-term costs. Either they thought that their green rate would pay off in the long run through protection against rate increases from fuel price escalation, or they felt that their purchase would help lower the cost of windpower over time.
With one exception, none of the business customers use their participation in the wind project to their company's advantage, though some would like to receive more recognition. Perhaps half of the participants had not even thought about promoting their business in this way, but several perked up at the thought. The reaction to this idea varied by business type. For example, a funeral home, a dance studio and the law firms saw no reason to advertise that they pay the green rate, while retail stores could see some advantage. The one customer who said he is using his participation for business purposes viewed the green rate as a marketing cost, although there was no marketing evidence on site. Instead, he said that as the largest participating business, he usually is mentioned in newspaper articles about the project.
The interviewees suggested several promotional concepts, including window stickers for retail stores, a windmill model for display, copies of news articles that could be framed,16 a listing of business supporters in articles or displays about the project, and bumper stickers. Bumper stickers with a phrase like "I Support Traverse City Wind Power" also could be used by residential participants to advertise their participation. They also would help raise public awareness if another project is undertaken.
A safe generalization of these results is that public recognition of participation in a green power project is not a motivating factor for most small businesses, but in many cases would be welcome. Such recognition could help participants gain credit as leaders in the community.
A clean and healthy environment is very important to Traverse City and to the businesses on the wind rate. When asked, "How important is a clean environment to the local economy?" many respondents looked either startled or amused, as if to say "Isn't it obvious?" All said that a clean environment is very important to the local economy.
Most interviewees cited tourism as a reason why the environment is important to the local economy, and over half stated that their business is highly dependent on tourism. Several respondents, however, emphasized the importance of the environment to the quality of life that has attracted arts professionals and other educated people to the Traverse City area. This quality of life is what keeps the area attractive to residents and non-residents alike.
When asked if they would make any changes to the program or the way it is offered, most respondents drew a blank. A few, perhaps prompted by an earlier question, mentioned the desirability of more recognition for those who are on the green rate. Several said they would like to see more wind projects.
This question did launch several respondents into an unexpected discussion about the Bayside coal plant, located on the waterfront near downtown. The presence of the plant irritates several of the participants. Two of the interviewees are convinced that it produces the soot they have to wash from their awnings or boats, although the plant operates infrequently and for short duration. All respondents who mentioned the plant believe it is a visual blight and should be moved. All these respondents also mentioned without prompting that they would be willing to pay a higher rate or buy more windpower if it would lead to the removal of the coal plant. Only one respondent seemed to be aware of long-range plans to shut down the plant.
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Linking the purchase of renewable energy to the offsetting of a visible and objectionable polluter could be a powerful incentive for some consumers to buy green power. |
Given the role the Bayside plant plays in guaranteeing power to Traverse City and the intermittent nature of windpower, it may not be feasible to link the purchase of windpower to the decommissioning of the plant. However, the example suggests that coupling the purchase of renewable energy with the offsetting of a visible and objectionable polluter could be a powerful incentive for some consumers to buy green power.
Factors in the Decision to Participate
At the close of the interviews, respondents were asked to indicate the importance of several factors that the researchers hypothesized might have influenced the decision to participate.17 These results are depicted in Figure 3.
Responses to the open-ended questions indicate that the environmental benefit ("clean power") was very important to all businesses interviewed, except one who said that it was only somewhat important. This respondent was unhappy with his participation, stating that he felt pressured into signing up by a personal visit from an advocate. The visibility of the project was not a major factor for most (fourteen respondents said it was not very or not at all important); several respondents noted that the project was not even under construction when they joined. A few noted that while visibility was not a factor in their decision-making, it "became important" and "now it's great."
Two respondents indicated that price was very important. This contradicted their earlier responses to open-ended questions that they were not concerned about price. In fact, one of these respondents said near the beginning of the interview that "price didn't enter into the decision," but then later indicated that price was a very important factor in her decision. This is probably a case of ambiguous wording in the interview. They may have downplayed the importance of price because it was affordable, but in the overall scheme of decision-making, price cannot be ignored.
Some observers have postulated that an important element in the success of the Traverse City wind rate is that it is offered by a publicly-owned utility. For this reason we asked if the credibility of the utility was important to the decision to participate. In several cases, the meaning of the question was unclear, so it was restated as, "Would you have signed up if it had been offered by a different utility?" Fourteen respondents (58 percent) said it was either very or somewhat important, but ten (42 percent) said it was not very or not at all important.
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