Purchasing Power! Bullfrog Power’s green electricity is hot in Headwaters, but is it worth the premium price?
Deep in Toronto’s financial district, I’m sitting across the boardroom table from Tom Heintzman, the president of Bullfrog Power. This slim, smartly dressed executive with a formidable resumé thinks that I’m interviewing him for a magazine story. What he doesn’t know is that, as a non-Bullfrog customer, I am also a cynical consumer wondering why I should pay this man to wash my underwear, heat my bathwater, and cook my meals.
Not many customers get to sit down with the president of the company before they buy electricity. But Bullfrog is different in many ways. Their electricity is more expensive. And with about five one-hundredths of a per cent of Ontario’s residential market, they’re fighting to build their customer base one person at a time.
Bullfrog Power, in case you haven’t heard the buzz, is Ontario’s first and only 100-per-cent green electricity retailer. It’s a private company that came on the scene in September 2005 and now serves nearly 2,500 Ontario residential customers and close to 200 businesses, many of them in the Headwaters region.
Bullfrog’s local connection runs deep, starting at the tadpole stage. Heintzman’s parents, Mary Jane and Tom, have a farm in Hockley Valley where Heintzman and his brother bring their families on weekends. Back in November 2004 when the company didn’t yet have a name, Heintzman took a walk near one of his parents’ ponds, noticed that the usual chorus of frogs was unnervingly silent, and realized that Bullfrog would be a pretty good name to capture the environmental zeitgeist.
Then there is Mono resident John Wilson, who occasionally gives tours of his solar- and wind-powered sustainable home. He rides the GO train or drives his Toyota Prius to a job as Bullfrog’s vice-president of operations.
One of the first businesses in Ontario to buy Bullfrog was the Elm Tree Dental Clinic in Palgrave. Owner Dr. Richard Ehrlich is your typical dyed-in-the-wool green Bullfrog customer: solar panels on his house, bikes and skis to work. He writes a column on energy conservation for a local newspaper.
“I do a lot of outdoor activities and I can’t stand smog days when you’re not even supposed to walk your dog outside,” Ehrlich says. “Burning coal, we’ve got the biggest air polluter in North America right in Ontario.”
Another customer, Caroline Doyle, owner of Brightwater Farm Equestrian Centre in Erin, learned about Bullfrog in the word-of-mouth fashion that is the key to the company’s success – in fact it was straight from the company’s vice-president of marketing, Jo Coombe, who brings her daughter to riding lessons at Brightwater.
Next door to Brightwater lives Jay Mowat, the retired CBC journalist who runs Erin’s new community radio station. He had already signed up for Bullfrog at home when he phoned Jo Coombe to do an interview. Erin Radio made the switch to Bullfrog when the company offered to buy three months’ worth of ads. “That’s going to compensate us for any extra costs,” said Mowat. “In turn, we’re the first radio station that’s Bullfrog powered.”
By far the biggest local Bullfrog splash happened last May when the Town of Caledon became Ontario’s first Bullfrog powered municipality, agreeing to power the town office for the remainder of the year at a premium of three cents per kilowatt-hour – a total cost to taxpayers of about $10,000.
“To people who say, ‘But you’re spending more money purchasing this,’ I say, yes, but we have a commitment to reduce our greenhouse gas,” said Mayor Marolyn Morrison. “And we wanted to demonstrate leadership.”
The decision flows from a cascade of environmental initiatives that have helped win Caledon the title of “Greenest Town in Ontario.” They include a commitment to reduce its corporate greenhouse gas emissions to 20 per cent below 1990 levels, and to 6 per cent below 1990 levels community-wide. Those targets were set as a part of the town’s membership in Partners for Climate Protection, a national organization that is acting on climate change in partnership with the Federation of Canadian Municipalities. Of the more than 140 Canadian municipalities that have signed on to PCP, Caledon is the only one in the Headwaters Region.
Bullfrog is working with the Association of Municipalities of Ontario to convince other towns to go green. Orangeville Mayor Rob Adams hadn’t heard of Bullfrog until I asked him about it, but the town is already conducting an energy audit to find ways to conserve. “The next step would be talking to Bullfrog and learning what they can do for us,” said Adams. The Town of Aurora is further along. Its environmental advisory committee has recommended the switch – at an annual cost of $21,000.
The extra money buys more than clean air. Bullfrog is an incredible marketing machine. The Caledon news garnered over two million “media impressions” in the first month. Every new customer gets to publish their name in the “Bullfrog Founders Club.” Businesses get their names advertised in The Globe and Mail, and everyone gets Bullfrog stickers for their windows. The company boasts celebrity endorsements from Margaret Atwood and Graeme Gibson, Bob Rae, Gord Downie of the Tragically Hip, garden guru Mark Cullen and many others.
The day before I interviewed Heintzman there was a full-page Bullfrog ad in the Globe; the musical group Barenaked Ladies was extolling Bullfrog on CBC radio; and Tom Heintzman was out late at a Bullfrog powered Tragically Hip concert at the Air Canada Centre. All the PR perks help explain why businesses like Wal-Mart, the Royal Bank and Cadbury have leaped on board, and Ivanhoe Cambridge, a national property management company, has just converted thirteen of its malls across Ontario to Bullfrog power.
But for critical consumers and taxpayers, a question arises. If it’s so much about image, how green is the frog beneath its skin? Is Bullfrog really delivering on its clean air claims?
Since Bullfrog has effectively zero competition in Ontario, it helps to look to more open electricity markets for a benchmark. Over a million electricity consumers buy green in Europe. There are over 200 green pricing options in Germany alone. In Great Britain, about 200,000 households pay a green tariff – less than one per cent of households but 20 times Bullfrog’s penetration here. In the United States, over 600 utilities offer a green pricing option in addition to many companies that sell purely green power.
Where there are so many options, green comes in many shades. A report by the National Consumer Council in the U.K. found that many green tariffs do not deliver significant environmental benefits. By the council’s standards, however, Bullfrog looks good.
Bullfrog power comes from 20 per cent wind and 80 per cent “low-impact” hydro. By comparison, regular electricity in Ontario is about one per cent wind and two per cent low-impact hydro (the bulk comes from nuclear, fossil fuel, and large hydro). All of Bullfrog’s power comes from Ontario facilities and all is third-party EcoLogo certified under Environment Canada’s Environmental Choice Program.
What about the fact that most of Bullfrog’s hydro comes from dams on northern Ontario rivers owned by Brookfield Power, many of which were operating for decades before Bullfrog? That’s one potential wart in the company’s green complexion, according to Tom Adams, executive director of the Energy Probe Foundation.
“When Bullfrog was established, what they were doing was entering into contracts with renewable generators that were pre-existing, and there was really no sense in which the Bullfrog contracts could be justifiably claimed as changing the electricity supply,” Adams says. “People were paying more but it was having absolutely no effect on the operation of the grid.”
Not so in the long term, according to Bullfrog. The Ontario government has committed to generating 10 per cent of electricity from renewable sources by 2010 and has promised not to count Bullfrog’s generation in these numbers, says Tom Heintzman. “The OPA [Ontario Power Authority] has made it explicit that they won’t be relying upon the voluntary market in order to hit their thresholds of new renewable generation.”
That means that if Bullfrog buys from existing renewable supplies like Brookfield’s, the government has to build new renewables to make up the difference elsewhere – at least until it reaches its 10-per-cent target. The Melancthon wind farm near Shelburne is one example of new renewable power that’s been contracted by the province. The Standard Offer Contract being offered to small renewable energy producers is another. Those projects can’t sell power to Bullfrog.
It sounds complicated (“What we’re talking about here is mostly an accounting exercise,” explains Tom Adams), but the net result is that every kilowatt-hour purchased from Bullfrog actually increases the proportion of Ontario’s electricity that comes from clean generation. And besides, as Bullfrog grows it is directly increasing the renewable energy supply by helping companies, like Sky Generation, to build new capacity.
To imagine where my power will come from if I buy from Bullfrog, I drove up to Ferndale on the Bruce Peninsula to visit Glen Estill. In 1999, Estill left his former life as a computer executive to start Sky Generation, the company which currently provides most of Bullfrog’s wind. He owns three industrial-scale wind turbines, two of them installed last year with a contract from Bullfrog. (Last month, Bullfrog announced it was expanding its wind resources through an agreement with Schneider Power to install two new turbines on Manitoulin Island.)
Estill met me by the side of Highway 6 in his hybrid car – the status symbol of the green capitalist – and walked me inside the base of one of the new turbines, which was rumbling like the bowels of a ship under the strain of a February gale. A digital readout said it was blowing over 40 kilometres per hour and generating its maximum output – 1,650 kilowatts – enough every half hour to feed my house for a month.
Estill powers about 25 per cent of the Bruce Peninsula. While Bullfrog customers in southern Ontario never get his electricity, it replaces power that would otherwise have to come up the wires from the Bruce nuclear station on Lake Huron, which in turn can send more power south to the mayor’s computer in Caledon or the dental drills in Palgrave – power which might otherwise come from coal or gas.
“When it’s windy like today and the wind farms in Ontario are producing, we’re burning less fossil fuel,” said Estill. “Think of the electric grid as a bathtub and you’ve got 200 faucets putting water into the tub and you’ve got six million drains. You want to make sure that as many of the taps putting water into that tub are coming from as green a source as possible, and then all the water in the tub will be a little bit cleaner.”
Using a formula that’s explained on its web site, Bullfrog is able to tell its consumers exactly the amount of polluting emissions they are avoiding, and the numbers are startling. The average household can meet Paul Martin’s old “one-tonne challenge” several times over, or displace the carbon emissions of an SUV.
Richard Ehrlich estimates that buying Bullfrog electricity has reduced his carbon dioxide emissions by over 14 tonnes, several times what he’s achieved with $20,000 of home solar panels. “You’ll never get such big reductions for such a little cost and zero lifestyle change. We talk of hitting the Kyoto targets. If one house in five was on this thing, we’d be there.”
So Bullfrog qualifies as green. What about the price? At 9.1 cents per kilowatt-hour, it’s in line with prices in the U.S. For example, Maine Interfaith Power & Light sells a similar 80:20 mix of hydro and wind for a premium of 3.12 cents per kilowatt-hour. Ontarians have only two other options for green electricity and both are a worse deal. For $60, you can buy a “Green Light Pact” from Oakville Hydro Energy Services that puts 1,000 kilowatt-hours of renewable energy onto the grid. That’s six cents per kilowatt-hour for a paper certificate and good karma – electricity sold separately.
The other option is green electricity from Direct Energy, which charges 8.99 cents per kilowatt-hour on a five-year contract. Direct Energy then buys renewable energy certificates somewhere within Canada to cancel out the pollution of 15 per cent of an average household’s – not your actual household’s – consumption. It’s a bit cheaper than Bullfrog, but it’s a lot less green and doesn’t necessarily clean up the air around here.
Bullfrog’s good for the planet and it’s fairly priced, but who can afford it? This is where Bullfrog buyers get religion – the religion of energy conservation, that is. If anyone in the province can squander electricity without guilt, it would be Bullfrog customers. But every one I met espouses the “pay more, use less” philosophy.
Caledon’s council and staff were so convinced they could conserve enough to cover the Bullfrog premium that council approved the purchase without increasing the budget. Although the town is still assessing whether that conservation target was met, it recently renewed its Bullfrog contract for the coming year.
“The employees try very hard to come up with the savings to make it worthwhile,” said Mayor Morrison. “People don’t leave their lights on anymore. People don’t leave their computers on anymore. I know when I’m not in my office right here, the light’s off.”
A Bullfrog customer in Orangeville, Jan Smith-Bull, works as the parks facilitator for the Town of Caledon. She’s a single mom and living proof of something the dentist Richard Ehrlich told me – that most Bullfrog customers he knows aren’t necessarily rich: “It’s people who care about their health.”
When Caledon celebrated its switch to Bullfrog, Smith-Bull picked up a loot bag of brochures and a $25 coupon. “I had it hanging here by my desk for a couple of months and kept looking at it. Finally in the summer I went and talked to my kids and said look, I want to do this, it does cost more, but if we reduce our consumption, which we need to do anyway, it won’t cost more.” So she stopped using her dryer entirely, except for five minutes per load to fluff things up, and her electricity use dropped by 45 per cent.
Smith-Bull’s first Bullfrog bill, which covered two months, was for $153.33 for 957 kilowatt-hours (which is about what an average four-person household uses in one month). It’s 30 per cent more than she would have paid for the same bill with Orangeville Hydro – about 50 cents a day – but as a result of the family’s conservation efforts, it’s still less than it used to be.
Smith-Bull feels so good about Bullfrog that she’s joined its legion of enthusiastic promoters. She has the Bullfrog lawn sign, two Bullfrog stickers on her house and a Bullfrog sticker on her car. She answers questions from neighbours and talks to people about Bullfrog at parties.
When I visited Bullfrog’s headquarters, I expected a glitzy office for the company that had generated so much hype. But it was impossible to sustain any impression that Bullfrog is a marketing scam aimed at people who have lots of money left over after they buy fair-trade coffee and organic chocolate. Bullfrog’s offices are in a heritage building – the kind with windows that actually open – dwarfed by the giants of Bay Street. John Wilson shares an office with the software developers working on the web site, steps away from where Denise answers phones in customer service.
Tom Heintzman turns out to be a 44-year-old nature lover and an idealist who gave up much higher-paying jobs in corporate law and management consulting to help Bullfrog’s chairman, Greg Kiessling, start a company that would make a difference.
To loosely paraphrase a long conversation, Heintzman sees Bullfrog as a free-market underdog with a role to empower the individual consumer within the elephantine bureaucracy and mega-project mania that is currently dictating Ontario’s electricity future. What’s at stake is whether we have any say in where our electricity comes from for the next 50 years.
In other words, you may think you’re buying electricity, but what you’re getting is power. And it all goes back to why Heintzman chose to name the company after a frog.
“They’re small but they have a big voice. We’re like that. Our customers are like that. We’re not a big group, but we’re trying to have a big voice in the energy dialogue in the province.”
So says the president of my new electricity company. Now where’s my sticker?
HOW MUCH FOR THAT FROG?
Most Ontarians now have the option of buying green electricity from Bullfrog Power. Nothing changes in the way you get electricity. You sign up at www.bullfrogpower.com and Bullfrog arranges to take over billing from your old provider and to put enough 100 per cent renewable-generated electricity onto the grid somewhere in Ontario to match your consumption.
You’ll pay 9.1 cents per kilowatt-hour, instead of the 5.5 cents (or 6.4, for usage above 1,000 kilowatt-hours per month) you’re paying now. This 42- to 65-per-cent premium per kilowatt-hour gets diluted by the delivery, regulatory and debt retirement charges on your electricity bill, which remain unchanged, so your total bill will only go up by about 30 per cent.
To figure out exactly how much you’d pay, just multiply the number of kilowatt-hours on the “Electricity” line of your power bill by 9.1 cents and compare it to what you’re paying now. For the average household, the difference works out to about a dollar a day. “We all spend a dollar a day on something we can do without,” says Bullfrog president Tom Heintzman.
Many customers find that signing on with Bullfrog motivates them to conserve so their bills go up less. Your Bullfrog bill and on-line account let you track your historical usage and exactly how much carbon dioxide, nitrogen oxides and sulphur dioxide you’ve kept out of Ontario’s air.