The Sacramento Municipal Utility District (SMUD) is setting the green standard for utilities to operate both green and efficiently. Residents of the California capitol pay much less for energy than their neighbors, get nearly 20 percent of their power from renewable resources, and receive among the best service in the state. Not bad for a municipally-owned outfit.

SMUD also is one of the first utilities to make solar power available for purchase to all its customers through its Solar Shares program. The utility provides incentives for customers to install residential solar, and works with developers to create "Solar Smart" homes that have integrated solar and several energy efficient features.

SMUD has been generating wind power since 1994, and operates some of the largest turbines in the nation. The utility is among the most aggressive utilities in embracing smart grid technology and renewable energy. SMUD will soon be rolling out smart meters to nearly half of its 1.4 million customers, and these meters will enable customers to save energy by programming thermostats remotely and by shutting off appliances online. SMUD has contracted with Silver Spring Networks to put the smart grid technology in place, with completion of the roll out scheduled for March 2011.

Consumers who proactively manage their energy with the smart meters can shave double-digit percentages off of their monthly utility bills. That's important for SMUD customers, because by doing so they can more than offset the future increase in their hourly rate. SMUD recently got approval to raise its consumer rate by 13 percent by 2011. But even after that spike, SMUD will be much cheaper than other California utilties. Neighboring Roseville Electric currently charges about 8 percent more, and Pacific Gas and Electric charges customers more than 40 percent more.

SMUD also has been ranked the best utilities in the state in a customer satisfaction survey.

While this is just one example, SMUD's success proves that when smartly run, utilities can implement clean energy and energy efficiency programs without levying a harsh penalty on customers. Some investor-owned utilities have been resistant to renewable power for this reason (such as PGE, which is currently fighting legislation that would require the installation of smart meters and a buy-back program for excess residential solar power).

It may not be easy, but Sacramento has proven that clean energy can be good business for customers.