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PepsiCo Makes Largest Corporate Purchase Yet of RECs

PepsiCo announced the purchase of renewable energy certificates (RECs) to match 100 percent of the purchased electricity used by all of its US-based manufacturing facilities, headquarters, distribution centers and regional offices. The EPA says the purchase marks the largest REC deal to date. The deal is for 1 billion kWh per year for three years. How much is that in real money?

At entry-level quantities, RECs effectively add a penny or two per kWh to the cost of a company's net electricity purchases. The terms of PepsiCo's negotiation were not disclosed in the announcement.

Sterling Planet, a retail provider of renewable energy, is identifying and acquiring the RECs for PepsiCo. Sterling Planet will seek to source the RECs to model PepsiCo's purchased electricity use geographically.

PepsiCo now tops the EPA Top 25 green-power purchasers list, joining Starbucks, Wells Fargo and Co., Whole Foods Market, U.S. Air Force and Johnson & Johnson.

In 2001, PepsiCo formed an Environmental Task Force. Among the company's green claims: two LEED GOLD certified facilities, and one plant that burns landfill gas in its boiler.

PepsiCo is one of the world's largest food and beverage companies, with 2006 annual revenues in excess of US$35 billion.