Cost structure generally reflects the contracted, long-term cost of the renewable energy resource, often called the PPA price. Some utility charges vary over time, particularly for customers participating in market-based rate programs (as explored above in the Review Key Program Terms section). Most green tariff programs will credit a customer for utilizing renewable energy. To do this, utilities may:

• Remove, or provide a credit for, the fuel charges associated with the traditional fuel mix used for grid electricity that the customer is avoiding through their renewable energy purchase;
• Provide a credit based on “avoided costs”, which reflect the costs the utility otherwise would have incurred if it had generated or purchased energy from a non-renewable generation source to meet the customer’s demand;
• Provide a credit for the capacity value – the ability to reliably meet demand – of the resource. Depending on the credit and cost structure, it is possible for a city to receive a credit that brings the overall cost to a level that is lower than its standard fuel rate.

Contract terms can vary substantially and range from month-to-month to more than 10 years. In some cases, charges and credits may vary with different contract time commitments. Longer terms typically receive lower rates.

Administrative fees vary between programs and sometimes within a program. Although such fees may initially appear small, in some instances these administrative costs can add up and greatly increase the total price of the program. For example, Georgia Power’s REDI program has an initial administrative fee of $0.00005 per kWh plus an ongoing administrative fee of either $0.001 or $0.0005 per kWh depending on the subscription level. Other programs:

• Include the administrative costs in the fixed price, such as Evergy’s (formerly Westar Energy) Direct Renewable Participation Service program;
• Require an application fee to sign up for the program, such as Rocky Mountain Power’s Schedule 34 which has a proposed $5000 application fee; or,
• Assess fees based on the number of electric meters or accounts utilizing the green tariff.

Often a utility will retire the RECs on the customer’s behalf. In some instances, however, the customer will need to be responsible for the management of the RECs and any associated retirement costs.

Many programs have fees associated with early termination. Termination fees vary; they can be based on the net present value of the remaining PPA cost, reflect the customer’s usage and the time remaining in the program agreement, or be based on other factors. In some cases, the customer is responsible for negotiating these fees directly with the utility when contracting for participation in the program.

• Utilization or subscription amount: The amount of renewable energy purchased under the green tariff may be selected by the customer. This may include the option to subscribe to a fixed percentage or a block of kilowatt-hours.
• Expansion of resources:  Some green tariffs are designed to be pilots or otherwise limit the initial amount of renewable energy that can be acquired through the program. Often, this is to demonstrate to regulators that the program does not harm other ratepayers. Once this is demonstrated, it is common for a utility to expand the program (see the Monitor and Share section for more information).

Participation in a green tariff program is based on electricity consumption, and there may be fees/ adjustments if consumption changes significantly. For example, suppose a customer of Xcel Energy Colorado signs up for Renewable *Connect to cover 100% of their load but later transfers their subscription to a new, more efficient facility. If this customer’s consumption during the first 12 months at the new meter is lower than the prior consumption, their contract will be readjusted to a participation level that matches the 12-month energy usage at the new meter; the customer would then pay a pro-rated portion of the early termination fee.