As an example, if it costs roughly six cents per kilowatt hour (kWh) to produce and distribute traditional forms of electricity, and it costs about eight cents per kWh to produce renewable energy, consumers would need to pay eight cents per kWh to justify the production of renewable energy. In order to make the economics of renewable energy work, developers will, therefore, produce and deliver their renewable electricity onto the transmission grids for the cost of traditional forms of electricity (about six cents per kWh), and then find voluntary purchasers to help make up the difference (two extra cents per kWh).

The "difference" (which represents the environmental benefit of the green power) is sold in the form of Renewable Energy Certificates (RECs). Voluntary purchases of RECs are a primary driver behind the current growth of renewable energy in the U.S. Because LG&E and KU are required to supply energy at the lowest possible cost, customers' voluntary purchases of this higher cost energy source are necessary to renewable energy developers to develop more projects.

By enrolling in the LG&E and KU Green Energy program, you pay for the supply and distribution of your electricity (roughly six cents per kWh), plus the extra amount for the benefits of the specific renewable energy electrons that are on the grid. Since LG&E and KU are offering Green Energy at $5 per block of approximately 1800 kWh, this means that you pay about 0.3 cents extra per kWh (for each block of Green Energy you purchase).

When a renewable energy facility operates, it creates electricity that is delivered into a vast network of transmission wires, often referred to as "the grid." The grid is segmented into regional power pools; in many cases these pools are not interconnected. To help facilitate the sale of renewable electricity nationally, a system was established that separates renewable electricity generation into two parts: the electricity or electrical energy produced by a renewable generator and the renewable "attributes" of that generation. The renewable attributes or "green" attributes are sold separately as renewable energy certificates (RECs). Only one certificate may be issued for each unit of renewable electricity produced. The electricity that was split from the REC is no longer considered "renewable" and cannot be counted as renewable or zero-emissions by whoever buys it.

This product is comprised of RECs. With the purchase of RECs, you are buying the renewable attributes (i.e. environmental benefits) of a specific amount and type of renewable energy generation. You will continue to receive a separate electricity bill from your utility. Your purchase of renewable certificates helps offset conventional electricity generation in the region where the renewable generator is located. Your purchase also helps build a market for renewable electricity and may have other local and global environmental benefits. The renewable certificates in this product are verified and certified by Green-e Energy. Each supplier of renewable certificates is required to disclose the quantity, type and geographic source of each certificate. Please see the Product Content Label for this information. Green-e Energy also verifies that the renewable certificates are not sold more than once or claimed by more than one party. For information on Green-e Energy please visit its Web site, www.green-e.org, or call them toll-free, 1-888-63-GREEN.