Working Assets Stands
Editor's Note: This article is the third draft received by the
Progressive Populist. It was received on the eve of publication,
after Jon Entine had replied to an earlier draft. Passages were edited out
of both the letter and the reply.
for Renewable Energy
The Progressive Populist recently [June 1997] ran a story
by Mr. Jon Entine entitled "Green Shell". This is the latest version
of an article Mr. Entine has circulated widely on the internet. The article
is riddled with misinformation which would lead any reader to conclusions
widely at odds with the truth.
The mission of Working Assets is to be a catalyst for building a more just
and sustainable world. Over the past decade, we have produced about $10
million in donations to progressive groups and generated nearly 3 million
calls and letters to selected officials on critical matters of public policy.
We have worked to achieve this by being a telephone company, and have recently
started considering the energy industry -- one of the most environmental
destructive industries in the world. We believe that the energy industry
needs a fundamental overhaul.
Unfortunately, most readers of the article would conclude that we favor
the destruction of renewable power rather and are in bed with corrupt politicians
and greedy utilities.
In fact, we have been strong and consistent supporters of renewable power,
working to hold giant utilities accountable, and charging fair prices which
are clearly disclosed. What follows is our attempt to set at least part
of the record straight. We have set up a special site at "www.wald.com/thefacts"
for those who would like additional background.
Some Truths About Working Assets and Green Electricity
A major debate is happening in Washington and in most state capitols over
the future of electricity. It is a debate that really matters, and we have
worked with many groups to defend the interests of consumers and the environment.
Here are six critical positions we have taken, all of which are pro-consumer
1. Every single utility must incorporate renewable power. Our own citizen
action program has generated more calls and letters to Congress in support
of these so-called portfolio standards than anyone else.
2. Every single marketer or distributor of energy must be required to disclose
the sources of their power.
3. Public financial support should continue for developing renewable power
4. Ratepayers or taxpayers should not bail out nuclear utilities from having
to pay for their earlier costly and foolish investments in nuclear power.
5. Much tougher new clean air standards must be imposed on utilities. Again,
our own citizen action program has generated more calls and letters in support
of such standards than other group[s].
6. Consumers should have the ability to choose an electricity provider other
than their local monopoly just as soon as big businesses can do so.
These are our public positions. Mr. Entine, who been informed of them, ignores
Mr. Entine cites a number of individuals expressing concern about deregulation
in general, none of whom mention Working Assets. Each one attacks deregulation
as potentially damaging renewables. We agree and have a consistent position
across a number of critical policies. Under these policies, we believe rates
would fall, the environment would be protected, and renewable sources strengthened.
Working Assets Participated in Two Tiny Pilot Programs
Public officials in New Hampshire and Massachusetts conducted two small
pilot programs to learn more about how deregulation might work prior to
passing legislation to change the market. We participated in these two trials.
In New Hampshire, the pilot can last up to two years and could serve no
more than 17,000 customers, and in Massachusetts, the pilot will last one
year and serve no more than 8,000 customers.
Working Assets would like to be able to construct new renewable power plans
to help clean up the air. But nobody would do that for a few customer in
a pilot that will end in a year. Mr. Entine ignores this and argues that
anything other than building new facilities and actually connecting them
with new wires to each home (how about that for an environmental disaster
-- doubling the number of power lines!) is a shell game.
Phony Alliance is Red Herring
In the article, Mr. Entine creates an "alliance of convenience"
which includes Working Assets with Rep. Tom Bliley and Pacific Gas and Electric.
No such alliance exists. Working Assets opposes almost everything that Rep.
Bliley and these major utilities support and they oppose almost everything
that we support. This is a matter of public record easily accessible for
Electricity Rates in New England
Mr. Entine argues that electricity rates have dropped in New England due
to below-market pricing by companies seeking to gain a toe-hold in a new
market. He may mean below-cost pricing, which is another thing entirely.
For the most part, we believe that rates dropped because regulators forced
them to drop by not allowing full recovery of the costs of prior nuclear
investments. We do know that Working Assets basically priced electricity
at our power cost with no margin. So much for huge premiums and gouging.
Misrepresenting Public Officials
Mr. Entine asserts that state officials "say that the pilot has resulted
in no clean energy being added into the overall energy mix, despite claims
by green marketers who are charging consumers a price premium".
This is almost certainly a misrepresentation of the positions of state officials,
not a single one of whom is cited by name.
Because of the nature of the pilot, neither Massachusetts nor New Hampshire
had the slightest hope that new clean energy would be generated.
Customers Were Fully Informed
We support public disclosure of power sources and have fully informed all
of our customers in both pilots about the source of their power by category
and will continue to do so. In addition, all customers were informed that
the underlying supplier of our power was New England Electric. Far from
hiding this fact, we broadcast it widely so that customers would have little
fear that we could not deliver the power.
In addition, in Massachusetts, every customer who participated or expressed
interest in the pilot was given a booklet explaining the pilot and comparing
the power sources for all companies. This disclosure was uniform for all
companies and was created by and distributed by an organization called Environmental
Futures. Our power sources were described and we have updated our customers
We could have bought power that is just the mixture in the wires, but we
chose to purchase power that comes from eleven specific facilities -- facilities
which are not nuclear, not coal burning, not pumped hydro, and don't use
Hydro-Quebec. The cost of using this cleaner power is greater.
Mr. Entine dismisses this as an accounting device. We call it a trail of
money -- and money is one thing that influences utilities. Electrons cannot
be traced once in the power grid, but dollars sure can.
Our customers' dollars are being used to increase the demand for clean sources
of power. If they demand more because they turn on the television, the owner
of the cleaner facilities gets more money and will eventually generate more
cleaner power. This is only [a] small piece of a good electricity policy
which contains clean air standards, requirements for renewable power and
no bailouts for nuclear power.
Our Long Distance Rates Are not Higher than Our Competitors
In a strange detour in the middle of an article about electricity, Mr. Entine
suddenly claims that we gross[ly] overcharge our telephone customers.
He is wrong.
Beware of anyone who seeks to compare telephone rates on the basis of a
single phone call or a single plan. This is only appropriate for those who
seek to make a point not supported by broader comparisons.
Mr. Entine compares a single AT&T promotional plan as the basis for
In charging its telephone customers, AT&T has filed literally hundreds
of rate plans with regulators so it can pick and choose. The rate plan that
AT&T is currently promoting, with hundreds of millions of dollars of
television advertising, direct mail, and telemarketing, is called One Rate.
It is hard to miss but is not the one Mr. Entine considers.
If every Working Assets customers switched to One Rate, they would pay 13%
more than if they stayed with us. This is an average. Some would pay more,
some would pay less.
Mr. Entine hopes that nobody notices that he compares us to One Rate Plus
-- which is not advertised, and compares someone billing over $1,450 per
year with Working Assets (our average customer bills about $360 per year).
Much of this billing traffic does not even get the 10 cents per minute touted
by Mr. Entine. He ignores the fact that customers on One Rate Plus also
have to pay monthly fees that total over $59 per year just to get lower
And, even after all that, if all of our customers switched all of their
traffic to One Rate Plus, they would still pay 9% more than they do to us.
Again, this is an average. Some would pay more and some would pay less.
Interestingly, Mr. Entine also cites a small competitor of ours -- Earth
Tones -- as having lower rates and "kicking back a far larger share
of profits" to environmental causes. We have great respect for Earth
Tones and wish them well as we both attempt to make the world a bit better.
But, they do not charge less and give more. Earth Tones' domestic interstate
rates are 15 cents per minute. Our average domestic interstate rates are
13.2 cents per minute.
Working Assets donates 1% of our bills to progressive non-profits in an
annual ballot of our customers. When combined with donations from our credit
cards and donations to our pool that customers voluntarily add, we have
donated about $10 million since we started.
Earth Tones contributes 10% of its profits to environmental campaigns. What
Mr. Entine fails to mention, although fully disclosed by Earth Tones, is
that all this really means is that Earth Tones is owned by a group of environmental
groups, so any profits go to these non-profits -- none to campaigns selected
by customers. According to a customer service representative of Earth Tones,
contributions to environmental campaigns have totaled about $1,000 so far.
How About Full Disclosure for our Critics?
Only one person is mentioned by name directly criticizing our New England
work. Rob Sargent is the legislative director with the Massachusetts Public
Interest Research Group. A reputable journalist subject to fact checking
would have disclosed that Mr. Sargent is employed by one of the principal
owners of Earth Tones, our direct competitor. This is not a secret, is easily
available to journalists, and is known by Mr. Entine. We welcome Mr. Sargent's
views and are in agreement with many of his policy positions, but readers
deserve to know his organization's financial stake in the outcome.
Quoting Out of Context and Without Permission
Mr. Entine quotes at length from Professor Paul Joskow of MIT. He does not
reveal that the cited quotations are from an interview conducted by somebody
else. He uses Professor Joskow to argue that participants in the New England
trials are having no effect on generating or any positive effect on the
Here is the next sentence from the actual interview:
"However, in the long run, if it's recognized that customers are willing
to pay more for green power, it may attract additional investment."
The implication is obvious, which is presumably why Mr. Entine chose to
leave off the sentence.
Professor Joskow has many comments on the use of his thoughts by Mr. Entine,
all of which are available to the reader at the web site noted above: "www.wald.com/thefacts".
The Massachusetts Pilot Was a Success for Green Electricity
One of the goals of the Massachusetts pilot was to determine whether residential
customers were even interested in electricity from cleaner sources. If consumers
are not interested, there is little reason to include consumer choice in
any plan to restructure electricity.
Mr. Entine asserts that the results of this pilot were a failure for green
electricity. In fact, the pilot was limited to a small number of participants.
Of those who participated, 31% [of residents] chose a green option. This
was widely considered a surprising success. The 750 customers who signed
up for Working Assets exceeded our expectations dramatically.
Entine's Article has a History
Mr. Entine's article is a familiar one to many on the internet. It has been
circulated to literally hundreds of thousands of people over a number of
months, as Mr. Entine has sought to find a publisher for it. The material
distributed under the title "Green Shell Game" is simply the most
recent version of articles recently published by Mr. Entine and distributed
by Environment News Service (ENS) on the Envirolink web site. That material
also contained many errors and was not fact checked prior to distribution.
We have repeatedly told Mr. Entine, who sends us drafts of this article
on a regular basis, that his material is full of errors. He has never corrected
or retracted a single one. Given his evident hostility and disregard for
the truth, we more recently told him that we are willing to fact check his
materials only when a publication informs us that they are considering the
material for publication. He has consistently refused to do so, and does
not inform his editors of this request (including, we believe, The Progressive
As you consider Working Assets role in electricity, we hope that you will
consider all of our positions rather than the outright misinformation provided
by Mr. Entine.
701 Montgomery St.,
San Francisco, CA 94111
Jon Entine replies:
'If You Don't Ask, They Won't Tell'
"Does the power come from a company owned by the developers and owners
of Seabrook nuclear power plant?," reads the brochure sent by Working
Assets Green Power to prospective customers in New England. "If you
don't ask, they won't tell you."
WAGP was apparently betting that no one would ask. As it turns out, it acts
as a green shell, buying all of its power from New England Electric Systems
(NEES), part-owner of Seabrook and the "dirtiest utility in New England,"
in the opinion of the Massachusetts Public Interest Research Group.
The same Working Assets is now betting that the readers of the Progressive
Populist will buy its "response" to "Green Shell."
Working Assets CEO Laura Scher and her PR spin artists are trying to shift
the focus from its marketing tactics to spurious allegations about the messenger.
Once the innocent, twice the fool.
Specifically, spokesman Michael Kieschnick contends that "no fact checking
was done with Working Assets."
None? I have had 16 direct communications with WA dating to March 7, 1997,
when I first contacted Laura Scher's office.
* March 14, Scher writes: "I am happy to assist you in whatever way
I can ... send me your questions in writing and I will respond in writing."
* March 26: I forwarded WA 64 questions and request for documentation. Received
no answers or documents.
* April 8: renewed request.
* April 12: sent Scher early version of article.
* May 2: Sent Scher updated version; from March to June, WA was sent more
than a dozen requests for information.
* May 20: called Scher directly; she said she did not want to talk and would
not send me documentation.
* Late May: sent Scher current draft of article. No response.
* Mid-July: faxed WA modified version of March questions. No documentation,
just a two-page letter reiterating company propaganda.
Working Assets now claims that it has "repeatedly told Mr. Entine ...
that his material is full of errors." Indeed it has. It just has never
identified the errors, nor supplied any documentation of its claims. On
the other hand, its claims of offering "nuclear free energy" have
mysteriously disappeared from its web page.
Does WAGP Increase the Generation of 'Clean' Energy?
From its response, we are assured that WA is pure as the driven snow, has
the best of intentions and that its "mission" is to achieve a
"just and sustainable world."
Now for substance: Will the green marketing free-for-all pioneered by WA
result in more renewable energy or less? Here's a primer.
* Did the pilot projects in NE result in the generation of even one new
"green" or clean electron? A: No.
* Did WAGP disclose the energy mix going to its customers? A: Not in NH
[at least before this year]. There was a limited disclosure in MA.
* Did WAGP supply solar and wind power to fulfill the commitment it reportedly
made? No; there is zero solar or wind energy in the NE energy grid.
Scher has gotten fried by environmentalists. Her mea culpa on WA's web page:
"Time constraints limited our ability to incorporate more renewable
sources and work more closely with environmental groups." ...
Phony Alliance is a Red Herring
Throughout our history, there have been innumerable alliances between political
opposites, each betting that their policies would prevail. In some cases,
the alliance blows up in the face of those who believe they are the "good
guys." In this instance, conservatives like Rep. Bliley, who have joined
hands with WAGP in support of green energy, understand deregulation is a
windfall for corporate customers which will get almost all the benefits.
Rural communities will be hit hard, and consumers will be asked to pay for
debts from unprofitable investments in nuclear plants. As the deregulation
wave sweeps across the United States, whose policies can we expect to ultimately
prevail -- Bliley and his corporate allies or Working Assets and its "good
Electricity Rates/Customers Saved Money
Kieschnick claims that "all we know is that Working Assets basically
prices electricity at our power cost with no margin." According to
New Hampshire officials, pilot participants are charged 2.29¢/kilowatt
hour to 3.5 cents. WAGP is the most expensive -- 53% higher than the lowest-cost
supplier. According to NEES, in Massachusetts rates ranged from 2.3 to 3.41¢/kWh.
WAGP charges 3.35¢ -- 46% more.
Customers Fully Informed?
WAGP writes that it supports "requiring every single marketer ... to
disclose the sources of their power." That's its alleged intention.
What's the actual practice?
It claimed that its energy is "nuclear free" when it wasn't. According
to the San Jose Mercury News [and apparently its own web site before
a recent alteration], WAGP was committed to supporting non-polluting power,
such as solar or wind generators. ... In reality, it bought access to ZERO
solar and wind power.
In Massachusetts, "disclosure" was limited to a booklet published
by NEES subsidiary Massachusetts Electric which had a one sentence description
of energy sources. Environmental Futures, which wrote the brochure, says
that the pilot was primarily designed to address "metering and billing"
"We're trying to ensure that misleading claims never happen again,"
says Jonathan Raab, facilitator for the New England Disclosure Project.
In the wake of the NH fiasco, the Disclosure Project was set up by regional
utility commissioners with input from sixty stakeholder groups. "People
know that Working Assets is getting flamed. Everyone now knows that if they
screw up they'll get caught. Power marketers will not be able to get away
with questionable and undocumented claims."
New Hampshire Customers Are Saving?
What's the difference between buying "unit contracts" of already-generated
electricity and adding clean energy to the mix?
Kieschnick claims that WAGP"s tactic of buying "unit contracts"
of already-generated energy contributes to a greener environment.
On April 22, I e-mailed my article to MIT department chairman and NEES board
member Paul Joskow. He e-mailed back: "I am aware of the points in
your note ... Unless 'green power' is done differently, it will give the
environmental movement a black eye. If you would like to ... you can call
me." I called.
Joskow said that green marketers in New England purchased no additional
clean energy, but merely rearranged existing contracts -- WAGP with NEES
and NU with itself. According to Joskow, they duped consumers. "I think
that people who sell green power have an obligation to reveal precisely
what it is they're selling," he said in a recorded interview. "In
some cases you can sell green power and you use the money to develop new
power sources that wouldn't have otherwise been developed and they're environmentally
benign. In New England, they're basically reselling contracts ... designated
for hydroelectric facilities that have no short-run effect whatsoever on
the dispatch of generation in the area, and have no positive effect on the
"Working Assets ... produced results that were less than exemplary,"
agrees Michael Vickerman of RENEW Wisconsin, a renewable energy activist
group. "They did not get us what we want: new renewables on the ground
to displace dirty power."
In her defense, Scher says her intention is to create a critical mass of
demand so she could offer green energy sometime in the future. Joskow was
skeptical. "In the long run," he said, "if it's recognized
that customers are willing to pay more for green power, it may attract additional
investment." But that's a long-shot, in my opinion. If consumers want
to pay boutique prices in hopes that, in the future, renewable energy might
actually be brought on line, so be it.
WAGP tries to fill a near-empty glass by claiming that "31% chose a
green option." What's the reality? While 31% of residents chose
a green option, WAGP does not say that only 60% of the energy available
was subscribed. Moreover, According to EF, only 1.2% of eligible participants
chose green and 10.1% of the total amount of energy selected was "green."
The real shocker: only 3% of small businesses chose "green" --
a disturbing figure, since the vast majority of deregulated energy will
go to business customers. ...
Inside the 'Green Shell' Telephone Reseller
Behind Working Assets' hyperventilation is: assets of course! Let's be clear:
WA has no products of its own. It is a shell that buys products at wholesale
(long distance access, Internet, paging, electricity), then slaps on a green
label and a steep green premium.
A recent Working Assets Long Distance advertisement in Mother Jones
claimed "lower" rates than competitors (it now claims rates are
"competitive"). Are they?
California Energy Markets wrote in June that, "Working Assets
has become a target for environmental groups, primarily because it charges
a substantial premium for its phone services." How big is this premium?
It's almost impossible to compare its rates to competitors since it has
what in my opinion is probably the most consumer-unfriendly structure in
the business. Its rate chart has three time periods, 11 mileage bands, and
until recently had two time limits -- 66 separate cells. According to its
web page, its basic rates range from 10.64¢ per minute to 33.73¢.
So, let's compare rates using publicly available information. WALD has twice
modified its rate structure since word of its premium prices stirred a controversy
... We'll give it the best break possible and include a 5% rate cut that
took effect July 15 (after its complaint letter).
If you live in Miami and phone Seattle, how many one-minute calls could
you make in a month using various companies if you had a $40 budget?
WALD MCI AT&T Sprint
Daytime 173 333 (+92%) 351 (+98%) 160 (-8%)
Evening 249 333 (+34%) 351 (+37%) 400 (+38%
Night/Wkd 358 333 (-8%) 351 (-2%) 400 (+12%)
Note: WALD (25% discount), MCI One Rate (12¢), AT&T One Rate
Plus (10¢ + $4.95/month), Sprint Sense 25¢/day, 10¢ night/wkd.
Greenkeepers customers pay a flat 9.5 cents; and it gives 5% of revenue
to charity, 500% more than WALD's rate. For $40, consumers could make 421
calls -- 144% more than with WALD during the day.
What's the conclusion? The "majors" are considerably cheaper,
unless you make most of your calls when the rest of society is asleep or
on weekends. If you're determined to spend with a "green" company,
you can save a minimum of 18% up to 144%
WALD brags in ads: "Finally, Straight Talk from a Telephone Company."
In the final analysis, the most important issue isn't Working Assets --
its market-driven ethics are now public record, and consumers have the right
to pay boutique prices for commodity services -- but the future of renewable
energy. Still, one has to be struck by the experience in New England, where
the overall energy pie remains the same. Every "green" slice of
electricity offered by Working Assets has resulted in an identical "browner"
slice going to NEES' other customers. No green electrons, no wind or solar
energy, has been generated. In the electricity industry, that's called "greenwashing."
Are you listening Laura Scher?
Editor's Note: The Wall Street Journal reported on July
23 that the Federal Trade Commission, reacting to criticism of marketing
tactics during a pilot test in New Hampshire, is considering "establishing
rules on what environmental claims utilities may make."
Copyright © 1997 The Progressive Populist