Greenwashing Claims in the Electricity Sector

Greenwashing claims in utility green power programs are emerging as a new area of consumer litigation, raising questions about clean energy marketing.

Greenwashing litigation has become a familiar part of consumer protection law. Most cases to date have focused on consumer goods such as food, cosmetics, electronics, or apparel. However, a newer and less developed area is starting to draw attention from plaintiff attorneys and is a growing frontier for litigation: greenwashing claims tied to electricity and utility “green power” programs.

As utility companies increasingly market renewable energy options directly to consumers, consumers often form expectations that do not align with the actual product delivered. This disconnect creates concrete litigation opportunities, particularly as data and technology now allow attorneys to investigate and substantiate these claims more efficiently.

This article outlines the legal theory behind electricity-related greenwashing claims, explains how renewable energy programs actually function, and explores why these cases are becoming more viable for plaintiff attorneys.

What Greenwashing Means in the Energy Context

Greenwashing refers to the use of environmental claims that misstate or overstate the environmental benefits of a product or service. These claims become actionable when they diverge from the underlying facts or are framed in a way that would mislead a reasonable consumer.

In the electricity sector, these claims often concern how energy is produced or sourced. Utility companies frequently market programs that promise renewable or clean energy in exchange for a higher monthly fee. Common statements include assertions that a consumer’s home is “powered by renewable energy” or that participation in the program supports local clean energy development.

These claims implicate false advertising, deceptive trade practices, and misrepresentation statutes. The question is whether an ordinary consumer, viewing the utility’s marketing as a whole, would reasonably believe they are receiving renewable energy or directly contributing to increased clean energy generation based on the claims made.

How Utility Green Power Programs Actually Work

Many utility green power programs rely on Renewable Energy Certificates, commonly referred to as RECs. A REC represents proof that one megawatt-hour of electricity was generated from a renewable source, and can be sold separately from the electricity itself.

This means a consumer may receive standard grid electricity generated from fossil fuels while the utility company purchases RECs from renewable projects located elsewhere. Those renewable projects may be in a different state and, in some cases, the electricity associated with the REC may have been generated years earlier.

This structure is legal and widely used. The issue arises when marketing materials blur the distinction between purchasing renewable electricity and purchasing certificates that merely represent renewable generation somewhere on the grid. Many consumers reasonably believe they are directly powering their homes with clean energy or meaningfully increasing renewable generation in their region.

Where Greenwashing Risk Emerges

The legal risk lies in how utility companies describe these programs and whether disclosures are sufficient for consumers to understand what they are actually buying.

Statements such as “powering your home with renewable energy” or “making your state more renewable” may be misleading if the underlying program relies on unbundled RECs sourced from unrelated locations or older projects. Courts evaluating these claims will focus on consumer perception rather than industry norms.

Another important factor is cost. Utility companies often charge consumers a premium for participation in green power programs. Purchasing unbundled RECs can be significantly cheaper than investing in new renewable generation. When these companies collect premiums without meaningfully changing their energy mix, the disconnect between price and impact becomes more pronounced.

Why These Cases Were Historically Difficult to Bring

Green utility programs have existed for decades, yet litigation in this area has been limited. 

One reason is complexity. Evaluating these claims requires understanding utility filings, REC registries, marketing materials, and consumer behavior. The relevant information exists, but it is scattered across regulatory filings, public databases, and corporate disclosures.

Historically, uncovering and connecting these data points required extensive manual effort. That barrier made many cases economically unattractive, even when the underlying conduct raised concerns.

How Technology Is Changing Case Discovery and Proof

Advances in data analysis, legal intelligence, and AI-driven tools are lowering those barriers. Large language models and related technologies can review massive volumes of utility filings, marketing materials, and regulatory disclosures much more efficiently. These tools help identify inconsistencies between public representations and actual sourcing practices.

Technology also enables broader discovery. Web-based intelligence can surface consumer facing claims, program terms, and public complaints at scale. Instead of waiting for individual consumers to come forward, attorneys can proactively identify patterns that suggest systemic misrepresentation.

Early Litigation Signals and Regulatory Movement

Greenwashing litigation in the electricity space is still developing. One of the few cases to address similar issues, Bloom v. Northwest Natural Gas, has survived a motion to dismiss and remains closely watched. While not directly about electricity, it reflects judicial willingness to scrutinize environmental marketing claims tied to energy.

Regulatory attention is also beginning to surface. Some states now require utility companies to disclose when green programs rely on unbundled RECs. While these requirements are limited, they suggest growing awareness of consumer confusion in this area.

At the same time, demand for green utility programs continue to rise. Subscription rates have increased steadily, demonstrating that consumers are willing to pay more for environmentally responsible options. That demand strengthens reliance arguments and underscores the importance of accurate disclosures.

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