Now PG&E wants to extend the ClimateSmart program, even as consumer watchdogs question whether it's worth the money.
"Everyone agrees that reducing greenhouse gas emissions is important - this just might not be the best way to go about it," said Diana Lee, an attorney representing the consumer protection office of the California Public Utilities Commission.
Launched with great fanfare in 2007, ClimateSmart gives PG&E customers a way to go "carbon neutral."
People who sign up for the program pay a monthly fee - usually less than $3 - to offset greenhouse gas emissions from the power plants that supply their electricity. Most of the money funds forestry projects that pull carbon dioxide out of the atmosphere. While other, smaller companies - such as TerraPass in San Francisco - offer similar services, ClimateSmart was the first such program from a utility.
But so far, only 31,000 PG&E customers have joined. That's 0.6 percent of the utility's 5.1 million customers, far fewer than expected. The California Public Utilities Commission, which approved the creation of ClimateSmart, predicted that 3.3 percent of PG&E customers would sign up.
The commission approved ClimateSmart as a three-year experiment and gave it a $16.3 million operating budget. Those expenses are paid by all of PG&E's customers, not just the ones who volunteer for the program. The fees collected from ClimateSmart participants pay for greenhouse gas reductions rather than the program's day-to-day operations.
But in its first two years, the program collected just $2.6 million from participants. During the same two years, it cost $9.7 million to run.
"This is a bad ratio, and there's no indication that it's going to get better anytime soon," said Matt Freedman, staff director for The Utility Reform Network, a consumer advocacy group.
ClimateSmart's three-year run is supposed to end late this year. But PG&E, which is based in San Francisco, has asked the commission to extend the program through 2011.
"As with any first-of-its-kind program, it's taken time to educate the customers about climate change and their carbon footprint and what they can do about it," said Robert Parkhurst, manager of climate protection and analysis at PG&E. "We still think the program's a great opportunity for our customers to deal with climate change."
If the commission agrees, the company would run the program for the next two years with money left over from the original $16.3 million operating budget. So only the PG&E customers volunteering for the program would continue paying for it.
The extension also would give ClimateSmart two more years to meet its greenhouse gas reduction goals. When it approved the program, the utilities commission required that PG&E offset 1.5 million tons of greenhouse gas emissions. By the end of this year, PG&E expects to have funded enough projects to offset 1 million tons.
If the commission doesn't extend the program, PG&E will be required to buy another 500,000 tons of emission reductions using money from the company's shareholders, not its ratepayers.
"We're confident that in two years, we're going to be able to meet our goals," Parkhurst said. PG&E has asked the commission to vote on the extension by the end of September.
Freedman said the program should devote all its remaining cash to buying more greenhouse gas reductions.