Updated: Ecotricity questions Good Energy's ROC retiral claims

Ecotricity's outspoken boss, Dale Vince, has accused rival green energy provider Good Energy of continuing to mislead customers, even as it attempts to clear up confusion over its green tariff policies.

As previously reported, Ecotricity accused Good Energy earlier this month of misleading its customers by claiming it retires five per cent more Renewables Obligation Certificates (ROCs) than it is required to under the Renewables Obligation (RO). Ofgem figures show that Good Energy has never retired ROCs at this face-value level.

Good Energy responded to the accusation by arguing it retires ROCS at a level that is "financially equivalent" to five per cent and that this has always been its stated policy. It also accused Ecotricity of trying to "discredit" the firm with "unsubstantiated claims".

Under the rules of the RO, ROCs that are retired over and above that which is legally required do not qualify for a rebate from a buy-out fund that is paid for those ROCs retired in line with legal obligations. Good Energy said it retires ROCs at a level that is "financially equivalent" to retiring five per cent, were it to receive money at the same rate as for the ROCs it is required to submit.

However, Vince has now questioned whether Good Energy has adhered to the policy of financial equivalence, stating on his blog that calculations undertaken by Ecotricity suggest Good Energy has retired too few ROCs to meet its published "ROC equivalents" level over the past few years.

According to the calculations, which Vince said are based on the value of ROCs were they to receive a rebate from the buy-out fund, Good Energy exceeded its five per cent ROC equivalent retiral pledge in 2003/04, but then fell significantly short of its pledge for each year between 2004/05 and 2006/07.

The company has also not yet retired any ROCs for the past two years, but has until August to do so under Ofgem rules.

The latest accusation comes as Good Energy this week published an open letter to customers clarifying its ROC retiral policy.

The lengthy letter from chief executive Juliet Devenport outlines how the company developed its equivalence policy after the government axed the Future Energy scheme in 2002, which had previously validated suppliers' green energy claims, and reiterates its claim that it has operated the policy for seven years without any complaints.

The letter makes no mention of Ecotricity, or the allegation that the company has failed to retire ROCs in line with its pledge to retire five per cent of " ROC equivalents".

However, it stresses that its retiral claims are subject to independent verification. "The Government buy-out fund varies each year, as does the amount we pay our micro-generators. Therefore, the calculation to work out how many ROCs we should retire is complex," Davenport writes. "As a result, we decided it would be best to employ an independent firm, Smith & Williamson, to verify the figures and publish a statement confirming our approach and the figures."

In addition to detailing the company's ROC retiral policy, the letter takes a veiled swipe at Ecotricity's stance on levy exemption certificates (LECs) and new green tariff guidelines currently being proposed by Ofgem.

"Going forward, we hope that the work Ofgem is now undertaking for green tariff guidelines will provide greater clarity and transparency to the market and stop the practice of double-selling, as LECs will have to be retired for all domestic green tariffs," Davenport wrote. "We are planning to update our offerings and consider an alternative to retiring ROCs. However, until this is complete we will continue to follow the original guidelines from 2002."

Vince has written previously on his blog that Ecotricity has "chosen not to join Ofgem's proposed new system because it mandates that suppliers "throw away " LECs - which costs customers money and does nothing to bring on new renewables".

Both Good Energy and Ofgem, which is still yet to confirm whether or not it will be investigating Good Energy's ROC retiral claims, were unavailable for comment on the latest allegations at the time of going to press.