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Investing in Clean Energy

Sprint has committed to reduce its reliance on fossil fuels and increase its use of renewable energy sources for electricity. Specifically, Sprint's goal is to secure 10 percent of its total electricity through renewable sources by 2017. By expanding its use of clean-energy sources, Sprint is able to diversify its energy supply, hedge market volatility in traditional fuel markets caused by supply problems, reduce the environmental impact of its electricity use, and stimulate clean-energy demand and innovation.

Over the past decade, Sprint's involvement with clean energy has included installation of on-site clean-energy facilities, partnering with energy-research institutions to research clean-energy alternatives for back-up power at sites, advocating in support of clean-energy opportunities, purchasing renewable energy through utility partnerships, and investing in Renewable Energy Certificates (RECs).

On-site Clean Energy Deployments

Sprint has deployed several types of renewable-energy sources to assess their potential for long-term and widespread application within Sprint operations. These efforts include a wind turbine at the Sprint headquarters campus in Overland Park, Kan.; solar deployments in California, New York and Kansas; geothermal cooling in South Carolina; and the use of hydrogen fuel cells at nearly 500 network sites throughout the U.S.

To date, the technology with the best opportunity for widespread deployment has been the hydrogen fuel cells as back-up power at cell sites. Each deployment has advanced understanding of renewable-energy opportunities. However, Sprint remains concerned about the viability of significant on-site deployments of any of the tested renewable-energy alternatives. The issues include physical limitations at sites (wind, light, temperature, space, etc.), cost (installation, support and maintenance), and the expertise and time required to wade through the array of federal, state, and even local incentives available to encourage adoption. At this time, Sprint does not expect to make any significant investments in on-site renewable-energy projects but does expect to continue to make limited strategic investments in on-site renewable projects. The opportunity for off-site renewable energy projects and long-term power purchase agreements is much better, as is the potential for investment in fuel-cell technology. Click here to learn more about our hydrogen fuel-cell efforts.

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Renewable Energy Power Purchase Agreements

Sprint believes that its best option for investing directly in renewable energy is through long-term power-purchase agreements (PPAs). Sprint established a Renewable Energy Working Committee in the second half of 2011 to develop Sprint's strategy for achieving its 10 percent renewable-energy goal. Sprint's five-year power-purchase agreement for wind energy with Kansas City Power and Light (KCPL) ended on Dec. 31, 2011; as such, the company looked for a suitable replacement for that energy (equal to 2.5 percent of Sprint's total electrical use) to meet the full 10 percent reduction goal by 2017. After meeting with nearly 20 vendors representing many facets of the renewable-energy market, Sprint concluded that it should purchase Renewable Energy Credits to offset the KCPL wind contract in the short-term, and put out a Request for Proposal for long-term renewable energy PPAs. A PPA is a financial arrangement in which a third-party developer would own, operate and maintain the energy system (in this case, wind, solar or other renewable-energy sources), and Sprint would agree to purchase the system's electric output from the energy provider for a predetermined period. These systems could be sited on either Sprint property or the third party's property. This financial arrangement would allow Sprint to receive stable and potentially lower-cost electricity, while the third-party provider acquires financial benefits such as tax credits and income generated from the sale of electricity to Sprint.

Through the first half of 2012, the Sprint Renewable Energy Working Committee has reviewed responses from nearly a dozen providers and is meeting with several of the providers for a more in-depth discussion. The Working Committee hopes to provide a formal recommendation by the end of the year. Sprint expects several PPAs will be required to achieve its full 10 percent goal and that RECs will remain an option to provide flexibility while negotiating and implementing PPAs.

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Use of Renewable Energy Certificates (RECs)

Sprint purchased it first RECs in 2004 as part of a LEED-certification effort for one of its facilities. In late 2011, Sprint significantly increased its REC purchase activity by securing 20,000 MWH of Green-e certified RECs from American wind-energy projects. This purchase increased total achievement against Sprint's 10-percent goal to just over 3 percent. In early 2012, Sprint made a more significant investment by purchasing 156,000 MWH of Green-e certified RECs from American wind and solar projects. This purchase advanced Sprint's placement in the EPA Green Power Partner list (as of 2Q12) to the 14th-largest purchaser of Green Power within the Fortune 500, by far the highest ranking within the U.S. telecommunications industry. Before expanding its REC purchases, Sprint consulted with its NGO and SRI stakeholders to gauge their position on using RECs as part of the renewable-energy strategy. The response was consistent — use of Green-e certified RECs as a component for investing in green power was acceptable and seen as a flexible instrument to support on-site and off-site renewable energy investments. Sprint recognizes that RECs do not provide the degree of financial incentive to developers that direct investment offers, but do allow procurement of green power across diverse geographical areas, provide indirect investment for developers and maintain green-power demand.

The World Resources Institute defines RECs as a renewable-energy product that companies can purchase to reduce the environmental impact of their business activities. A REC represents the environmental attributes — for example, avoided CO2 emissions — that are created when electricity is generated using renewable resources instead of using fossil fuel sources such as coal, oil and natural gas. RECs can be sold separately from their associated electricity and thus enable customers to purchase the environmental attributes of renewable-power generation independently of their retail power supply. Sprint's REC purchase guidelines support only Green-e Certified RECs and RECs associated with renewable power sources within the U.S. Both the EPA Green Power Partners Program and WWF Climate Savers Program support Green-e Certified RECs.

Sprint has chosen to align its January 2012 REC purchases with specific facilities and functions within Sprint, providing value to specific business units and locations. Sprint was proud to work with 3Degrees on the purchase of 156,000 MWH, which is related to the following projects:

100,000 MWH Blue Canyon Wind Power II
50,000 MWH US Green Power
5,000 MWH Catalyst Wind
1,000 MWH Brighter Schools Solar

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Clean Energy Advocacy

Sprint has taken several steps to actively promote the use of clean energy and advocate on the importance of clean energy for the U.S. Sprint believes encouraging green energy can decrease our use of fossil fuels and dependency on foreign oil, reduce and stabilize utility costs for businesses and consumers, and improve the U.S. energy supply's security and reliability. Sprint's actions have included lobbying with Kansas City Power & Light to get approval to build the Spearville Wind Farm in Kansas, having Sprint CEO Dan Hesse meet with the head of the U.S. Department of Energy regarding green-energy opportunities, speaking publicly about the importance of renewable energy and Sprint's renewable-energy efforts, and in June 2012, sending a letter to the leaders of both the U.S. House of Representatives and Senate urging them to support the extension of the Production Tax Credit (PTC) for wind energy. The PTC has enabled the industry to slash wind-energy costs — 90 percent since 1980 — enabling companies like Sprint to purchase increasing amounts of renewable energy. Wind supplies 3 percent of US demand and accounts for 35 percent of new power capacity installed from 2008 through 2011. In the seven years that the PTC has been continuously in place, installed wind capacity has grown sevenfold to nearly 47 gigawatt hours (GWh) representing more than $79 billion in private investment. Sprint recognizes the valuable role federal and state incentives play in encouraging investment in green-energy projects and in stimulating innovation that will lead to additional jobs in the U.S. and the opportunity to increase our exports of energy products.

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REC Project Highlights

Blue Canyon Wind Farm is the largest wind farm in Oklahoma as of the end of 2011. The project, located in the Slick Hills north of Lawton, consists of three phases: I, II and V. Sprint's RECs are associated with phase II, which consists of 84 Vestas V80-1.8 MW wind turbines, with a collective nameplate capacity of 151.2 MW. It is owned and operated by Horizon Wind Energy, a subsidiary of Energias de Portugal, a world-leading Portuguese utility, and began commercial operations in December 2005. Sprint has aligned these RECs with power consumption from the Sprint headquarters campus in Overland Park, Kan., as well as other facilities in the Kansas City area.

U.S. Green Power: 3Degrees US Green Power REC option provides renewable energy generated by wind, solar, geothermal, biomass and low-impact hydro projects located across the U.S. When Sprint retires these RECs, it will receive an attestation from 3Degrees naming the specific projects from which the RECs were sourced. These RECs are aligned with electricity use from the Sprint Network organization, which is distributed across the U.S.

Catalyst Wind: These RECs are sourced from wind farms coming online in 2011 or 2012 and provide higher REC revenues for the wind-farm owners, encouraging them to develop new projects. One of the attributes Sprint looks for in its purchase of RECs is "additionality" with the idea being to stimulate additional investment in renewable-energy projects and not just purchase RECs associated with old renewable energy projects. That is one reason Sprint requires all RECs be Green-e certified. As with the U.S. Green Power RECs, when Sprint chooses to retire these RECs, it will receive an attestation from 3Degrees naming the specific projects from which the RECs were sourced. Sprint has chosen to align these RECs with its electricity use from its retail stores, distributed across the U.S.

Brighter Schools Solar: Increasingly, schools are discovering that the installation of solar panels can provide them with significant financial and educational benefits. 3Degrees' Brighter Schools Solar RECs are generated from solar projects located at schools on the west coast of the U.S. Sprint paid a premium for these RECs to signal rising demand for solar power at schools. This project also aligns with Sprint's interests in education — advancing environmental education in schools (as supported through our grant to the Green Education Foundation) and in providing product and service solutions to schools that help bridge the digital divide. These RECs are aligned with Sprint electricity use from retail stores in California and Oregon.

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Hydrogen Fuel Cell Leadership

Sprint has one of the largest deployments of hydrogen fuel cells within the U.S. wireless industry. Beginning in 2005, Sprint gained expertise through a first deployment of more than 200 early-generation fuel cells to wireless-network cell sites in largely hurricane-prone areas like New Orleans, Houston, and Jacksonville, Miami and Tampa, Fla. The cells proved to be dependable, required little maintenance and could be deployed in places where diesel generators couldn't due to noise or emissions restrictions. This first deployment also outlined some key lessons, the greatest being that cells needed to provide 72 hours of back-up power versus the 16 to 20 hours these early cells provided.

Sprint approached the DOE with a grant request that could address some of the identified barriers to adoption, and in April 2009, Sprint was awarded a $7.3 million grant from the U.S. Department of Energy as part of the American Recovery and Reinvestment Act (ARRA) funding earmarked for fuel cell technology. The award was finalized in March 2010 and provided funding to support Sprint's effort to develop and deploy improved hydrogen fuel cells as back-up power for cell sites. The purpose of the project is to demonstrate the economic and operational viability of 72-hour fuel cell systems that can provide critical back-up power to Sprint's wireless networks and to provide a cleaner, more renewable alternative to diesel-powered back-up generators.

Sprint has collaborated with hydrogen fuel-cell manufacturers and hydrogen suppliers to improve and standardize the technology and refueling process (on-site refillable hydrogen storage tanks) to enable broader adoption. Sprint also worked with the DOE to train local fire marshals and code officials on the benefits of hydrogen fuel cells, and to facilitate installation approvals. The new hydrogen fuel-cell technology provides 72 hours of backup power, making it a cleaner, more viable alternative-energy solution for many industries.

Through the end of June 2012, Sprint has deployed more than 410 fuel cells to critical cell sites across the country. The fuel-cell deployment associated with the DOE grant will be completed by the end of 2012, with a total of approximately 500 cells expected to be in service.

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