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Utility Company's 'Green' Program Misleads Taxpayers Into Thinking They're Helping To Preserve Forests

Thousands of PG&E customers are effectively paying twice to "save" the same Mendocino County forests.

California’s largest utility company promises its customers green salvation through its ClimateSmart program.

For every bit of energy a PG&E ratepayer uses – turning on a vacuum cleaner, powering up a computer or heating up an oven – a little part of a tree or forest is saved to erase the carbon sins of the customer. The voluntary program costs ratepayers an average of $60 a year.

But the company isn’t telling its customers one crucial fact: Those forests were purchased years ago by a Virginia-based conservation group that used nearly $50 million in loans and grants from California taxpayers. That group, The Conservation Fund, then sold PG&E carbon credits on the land it had already purchased for preservation and selective logging.

Thousands of PG&E customers are effectively paying twice for the same Mendocino County forests.


The ClimateSmart program highlights the complex and murky relationship among big business, state environmental regulators and various conservation groups working on climate change – a relatively new and untested system in which a vast amount of money is traded without much public scrutiny.

ClimateSmart, which has operated since May 2007, has more than 30,000 enrolled residential and business customers, including the American Lung Association and the beloved Bay Area coffee maker, Peet’s Coffee & Tea. Participants pay a surcharge based on their power usage. The utility said it has collected about $8.6 million so far.

“We invest in these projects on behalf of our customers,” said Kathleen Romans, a spokeswoman for PG&E. “We’re procuring something for them. Their funds come to us, and we’re investing, under contract, projects that provide co-benefits – healthier habitat for wildlife, watersheds and native plants.”

The PG&E marketing campaign for ClimateSmart includes promotional inserts in power bills, direct mailings, newspaper and radio ads, and a website. The company is authorized by state regulators to spend $16.3 million marketing and running the program.

To some environmentalists, the program is designed merely to assuage the guilt of carbon polluters, and little else.


“Indulgences didn’t work in the Middle Ages, and they don’t work now,” said Rolf Skar, a campaigner with Greenpeace USA. 

PG&E’s investments in carbon sequestration include a company called California Bioenergy, which captures greenhouse gases emanating from cow manure, and a program that collects and destroys potent ozone-destroying gases from appliances.

The company also targets timber -saving programs, two of which were funded by California taxpayers. PG&E’s ClimateSmart website makes no mention of the public financing of these projects. And none of the company’s ClimateSmart press releases mention it.

But the forestland that ClimateSmart is saving to sequester carbon has long been targeted, and protected, by environmental programs.

In 2004, a large land trust, The Conservation Fund, bought nearly 24,000 acres of forestland in Mendocino County. The property, called the Garcia River Forest, is in California’s Coast Range, nearly 10 miles northeast of Point Arena. Redwoods dot the landscape like bristles on a brush – straight, true, and anywhere and everywhere the steep, shadowy surface allows.

Not far away, The Conservation Fund in 2006 acquired two more properties: 16,000 acres of the Big River and Salmon Creek forests, which are recognized by state officials and The Conservation Fund as one conservation project.


The total purchase price for both projects was $66.5 million.

The state provided nearly $50 million through taxpayer-funded bond money and a $25 million loan. The Conservation Fund and The Nature Conservancy, another national conservation organization, provided an additional $10.5 million. Private donors, including the charitable arms of major housing developers, such as Centex and the ACE Group, donated the rest.

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