Service Co. of New Mexico (PNM) to purchase 267 megawatts (MW) of wind, solar and storage to supply clean power to a $1-billion Facebook data center under construction in the state. All the power under the approved contracts — which lock in prices for 20-25 years — will likewise come from new projects either in development or under construction. Beyond the megawatts and companies involved, what’s important here is that the contracts involved are based on a “green rider” — basically a contract template. PMN had developed the template, and regulators had pre-approved it as part of the utility’s green tariff for corporate customers. The template could then be customized for individual projects, allowing for a faster and more streamlined approval process.
The PNM example reflects a potentially critical development in utilities’ response to U.S. corporations’ ever-more voracious demand for clean energy. Companies, from Facebook to Budweiser, are now demanding green power programs with “additionality” — that is, which add new clean energy projects to the grid and provide ownership of renewable energy certificates, or RECs. The result is a growing number of utilities are beginning to offer green tariffs that ensure additionality, long-term price stability and RECs.