David Parkinson
Globe and Mail
May 6, 2006

As Muppet philosopher Kermit the Frog so aptly observed, it’s not easy being green. It’s not cheap, either, as it turns out. But that’s not stopping Margaret Atwood or David Crombie. Tragically Hip front man Gord Downie and chef Jamie Kennedy have gone green too.

They are among the first wave of Toronto customers to sign up with Bullfrog Power Inc., Ontario’s first – and so far only – retailer of 100 per cent renewable, environmentally friendly electricity. Together, they help to form fledgling Bullfrog’s vanguard: green pioneers who are willing to pay a premium of roughly 30 per cent on their monthly electrical bills in support of clean power generation in the province.

Bullfrog, which launched last September, is up to about 1,000 residential customers province-wide. About half of them are from the Greater Toronto Area, says Bullfrog president and co-founder Tom Heintzman. While he acknowledges that this “doesn’t even register” in terms of market share in a province with more than four million households (about 1.7 million of them in Toronto), it’s a start.

It doesn’t hurt to have some of the city’s leading citizens on Bullfrog’s list of early customers, and the company isn’t shy about name-dropping in its press releases, on its website and in its newsletter. While the size of the client list is still modest, the company is already receiving recognition from high places: This week, it received a Green Toronto Award from the City of Toronto for its “leadership in market-based environmental solutions,” with Mayor David Miller presiding over Tuesday night’s awards ceremony.

For home consumers, Bullfrog’s service is remarkably uncomplicated. Once you sign up (an on-line application is available at http://www.bullfrogpower.com), you receive your electricity from the Ontario power grid as always, along existing power lines, with no additional equipment needed. The only difference is that you are billed by Bullfrog, which buys an amount of power equal to the amount its customers consume from suppliers who meet the Canadian government’s EcoLogo standard for renewable power generation. (Its current mix of power consists of 20 per cent wind power and 80 per cent low-impact hydroelectric generation, two sources that combine for less than 3 per cent of the supplies on the overall Ontario power grid. Roughly three-quarters of Ontario’s electricity come from decidedly un-green nuclear and fossil-fuel-burning plants.) In effect, all the power consumed by Bullfrog customers “is being offset by green [power] going on the grid,” Mr. Heintzman says.

This does, of course, come at a price. Bullfrog’s residential customers pay 9.1 cents per kilowatt-hour for their power under a one-year contract, compared with 5.8 to 6.7 cents under the Ontario Energy Board’s regulated prices. It works out, on average, to about an extra $350 annually for the privilege of supporting green power.

“There’s no doubt it adds cost to the household budget, and that’s something you have to work out,” says customer Kevin McLaughlin, president of Toronto-based AutoShare, which offers customers hourly time-sharing of a fleet of vehicles as an alternative to owning a car in the city. He was among Bullfrog’s first customers, signing up both his home and his business last fall.

“I’m really trying to be committed to living a green life here in the city,” he says. “It’s not easy to make every consumer decision a green one. But as a province, these energy issues . . . are some of the biggest issues we face.

Tom Adams, executive director of Toronto-based power-industry watchdog Energy Probe, says Bullfrog, even with its adherence to more expensive green power, does offer a competitive price for its contract compared with other fixed-price offerings in the market.

According to price-comparison website Energyshop.com, only Canadian Hydro offers a lower fixed-price contract for Toronto customers, at 8.99 cents per kilowatt-hour. Direct Energy charges 9.65 cents per kilowatt-hour under its standard five-year contract, and 9.99 cents under a five-year Green Power offering that competes with Bullfrog for environmentally conscious buyers. But Energyshop.com notes that Canadian Hydro and Direct Energy’s prices exclude various fluctuating rebates and charges from the Ontario government, which, it says, can reduce the price by as much as 2 cents a kilowatt-hour. Bullfrog’s price is net of these price adjustments.

Still, cost is not the only consideration for customers choosing a green alternative for their power needs, and Mr. Adams agrees that Bullfrog is offering a credible alternative. “Bullfrog has been effective in producing a product that passes muster with the environmental community.”

Ultimately, though, Mr. Adams is not optimistic that we’ll see a boom in demand for products like Bullfrog’s in the Ontario electricity market, simply because the cost of renewable power has yet to prove competitive. In fact, he notes, the costs for wind power, a key part of Bullfrog’s strategy (it is working with Sky Generation to co-develop wind turbines on the Bruce Peninsula), have actually been rising in the province, which simply doesn’t have the right geography or climate for efficient wind-power generation.

“The market of people willing to pay a premium is a pretty small one,” Mr. Adams says. “If the renewable energy industry can’t make progress with the cost of production, then its opportunities are limited.”