A Greener Provider

Just Energy's CFO, Beth Summers, explains why it's worth paying more for green energy

“We have some-thing great to offer. We’ve created a market that clearly demonstrates that energy customers are looking for green products and will pay a premium for it.” —Beth Summers, CFO

No one likes to open an electricity bill only to get “shocked” by the high rate. So if consumers of electricity and natural gas were given the choice to pay more for energy produced in a green way, would they willingly do so? Surprisingly, the answer is yes, according to Beth Summers, CFO of Just Energy Group Inc., a leading, competitive North American retail-energy provider.

Operating in 13 US states and 6 Canadian provinces, Just Energy appeals to deregulated markets where consumers can choose their energy supplier.

Summers has spent her entire career working in the energy sector, once serving as executive vice president and CFO at Hydro One, and also as a chartered accountant at Ernst & Young. She explains that this complex market is dependent on a number of factors, including whether an area is regulated or deregulated.

“Our focus has expanded significantly to offer residential and commercial consumers green-energy alternatives through renewable-energy credits and carbon-offset projects that enable them to offset the emissions associated with their everyday energy consumption,” Summers explains. “Essentially, the green-energy technologies that we invest in mean we’re putting more choice and control in the hands of consumers who want to act now to reduce their ecological footprint.”

But as the original source of this energy is invisible to the consumer, how does the end user know if the energy they are buying is in fact green?

First, it’s essential to understand how this intangible system works. Pinpointing exactly how the company sells its products presents an exercise in defining an abstract consumer concept. With the exception of its Hudson Solar Energy division, Just Energy does not produce the power, nor does it own the transmission and distribution lines or equipment involved in providing consumers with electrical power. What it does, however, is act as a broker between the energy producers and the consumer to provide the energy supply.

As a measure of accountability, Just Energy has its green purchases reviewed yearly by an independent third-party accounting firm to verify that Just Energy’s green purchases match its green-energy sales. This provides validation that Just Energy’s green-energy investments reconcile with customers’ energy selections.

“In terms of energy, it’s more expensive to produce green,” Summers explains. “It is pricey technology. Also, with respect to electricity, in most instances the energy infrastructure is aged and not designed to take the generation feed into the system where this sustainable energy can be created. For example, a wind farm works best where there is lots of wind. But that’s not necessarily a place where there’s lots of population or readily available transmission and distribution. Same with large-scale solar.”

So while the goal of purchasing green power is a good one, it’s definitely not the easiest nor the least expensive. However, it is something consumers are demanding in larger and larger numbers.

“When the company first started selling this product, we were pleasantly surprised to see the extent of customer demand for green,” Summers says. “No one expected it.”

In select regulated markets, Just Energy offers a product called JustClean. Unlike its commodity-based green-energy options (JustGreen Power and JustGreen Natural Gas), JustClean is a non-commodity-based carbon-offset product specially designed to help consumers offset their carbon footprint and the related environmental pollution.

Figures from Just Energy’s third quarter of the 2012 fiscal year reveal that of the company’s new customers over the last 12 months, 33 percent elected to buy the green product over traditional energy. Summers says that the products are offered such that customers can offset a portion or 100 percent of their energy consumption.

“We have something great to offer,” says Summers of the third-quarter sales. “We’ve created a market that clearly demonstrates that energy customers are looking for green products and will pay a premium for it.”