Local Energy Rules

In New York, community choice aggregation is an especially compelling prospect. It dovetails with a wider effort to reorient state energy policy around renewables, distributed generation, and energy efficiency called Reforming the Energy Vision. Expected to take a decade to fully iron out, the regulatory overhaul -- which stands to reconfigure the longstanding monopoly model -- is underway. But community choice aggregation is already available, and the number of cities opting in is on the rise. John Farrell, who heads up the Energy Democracy initiative at ILSR, recently spoke with Glenn Weinberg, who helped launch Westchester Power, a community choice aggregation program for 20 communities just north of New York City.

A 2015 mayoral proclamation that Rochester target an all-renewable energy mix by 2031 added the city to a wave of others across the country deepening their commitment to clean energy. The pledge wasn’t binding, but it set an ambitious goal for the community, Rochester City Council Michael Wojcik said. Wojcik spoke with John Farrell, who leads the Energy Democracy Initiative at the Institute for Local Self-Reliance, in February 2017.

New England offers some of the nation’s biggest incentives for renewable energy generation, but high upfront costs and complicated financing mean many residents are still missing out on the opportunity to go solar. But one cooperative, with a series of pioneering programs, is beginning to change that. Co-op Power, headquartered in Massachusetts, has steadily built up its credentials over the past decade. In a significant milestone, it mounted a $4.3 million community-based fundraising campaign for a biodiesel plant set to go online early next year. It has supported hundreds of rooftop solar installations, and fueled the region’s green job growth. Leveraging its cooperative structure -- underpinned by 500-plus member-owners who help set its strategy and back projects in Massachusetts and New York -- the group plans to sharpen its focus on bringing more community solar projects to the grid, then delivering benefits more people in the communities it serves. To date, Co-op Power has developed a series of innovative projects driving continued success in the marketplace. John Farrell, who leads ILSR’s Energy Democracy Initiative, explored the group’s past, present and future in a November 2016 conversation with Isaac Baker, a founding member of Co-op Power and its vice president of community solar.

Minneapolis garnered national attention when it formed a first-of-its-kind partnership with local utilities to advance sustainable, efficient energy policy. Now, as communities across the U.S. increasingly push for influence over their energy futures, the Midwestern city offers a blueprint for what works and a taste of the challenges that come with cooperation. John Farrell, who leads the Energy Democracy Initiative at ILSR, was a key player in forging the hard-fought Clean Energy Partnership in 2013. He’s still involved as a member of the advisory committee formed to steer the city and its two investor-owned utilities toward policies that favor renewable energy and efficiency. Officially two years in, the Minneapolis model offers deeper insight to other communities chasing meaningful change. Farrell outlined the key takeaways in the latest episode of Local Energy Rules, the ILSR podcast that highlights innovative pathways to local, renewable energy.

A widening chasm between what customers want and what Santa Fe’s electric utility delivers is bolstering a campaign to rejigger power production and distribution, possibly putting the city itself in charge. The municipalization campaign, years in the making, comes as the Public Service Company of New Mexico (PNM) leans on a long-term strategy that shortchanges renewables, includes shaky financial analysis, and diverges from what most ratepayers say they want. Now, New Energy Economy -- the Santa Fe advocacy group spearheading the effort -- is vetting its options for toppling a monopoly criticized for its resistance to renewables and market-leading fees. Santa Fe could form a municipal utility on its own, or aggregate demand with communities nearby and form a utility alongside them. John Farrell, ILSR’s Energy Democracy Initiative Director, spoke with Mariel Nanasi, executive director of New Energy Economy, in August 2016.

On June 17, John Farrell delivered a keynote address to the annual Midwest Energy Fair in Custer, Wisconsin. In this presentation, John detailed the growth of renewable energy and how new technologies and smart policies can lead to the downfall of the monopoly electric utility. Thank you to the Midwest Renewable Energy Association for the recording of John's talk.

“We just need to become the Ben and Jerry’s of the utility world!” So said Mary Powell (pictured left), CEO and president of Green Mountain Power, as she announced in 2014 that her electric utility had just become certified as a Benefit Corporation. The “B-Corp” designation means that the utility must follow certain standards of accountability, transparency, and sustainability alongside its traditional commitment to shareholder returns. There are more than 1,700 B Corps in 50 countries, spanning 130 industries. For an electric utility, that means moving from just selling energy, toward “energy as a service.” We’ve written about them before. Back in January, Powell talked with John Farrell about what it means to make energy into a service, and how a utility can transform itself into a societal good.

Incentives designed to make rooftop solar feasible for a wider range of consumers are under attack nationwide, threatening new solar development as well as the consumers that already have rooftop panels. The staunchest opponents? Utilities who say, despite a growing body of research to the contrary, that rooftop solar hurts other ratepayers and their bottom lines. In particular, utilities have railed against net metering policies that require them to provide credits to customers that produce energy from their own solar arrays. Those programs, and other key incentives supporting rooftop solar, are at the center of fierce debates in several states -- notably in Arizona, on former U.S. Rep. Barry Goldwater Jr.’s home turf. Arizona’s fraught energy policy landscape sprouted the advocacy group Tell Utilities Solar won’t be Killed, or TUSK, in 2013. The group is led by Goldwater and now active in more than a dozen states facing similar discord. Goldwater spoke with ILSR’s Director of Energy Democracy, John Farrell, in May 2016 about solar energy as a source of freedom and the threat from incumbent monopoly utilities.

A surge of interest in residential solar arrays threatens traditional utilities’ outdated business model of selling more and more electricity, prompting them to adopt a controversial fee that hurts efficiency and diminishes long-range cost savings -- even for themselves. Mandatory fixed fees on utility bills force consumers to pay up no matter how much, or how little, electricity they use. Utilities are increasingly pushing higher fees, skewing rate plans to erode benefits for customers with rooftop solar that offsets power demand and eases strain on the grid. Solar and conservation advocates call it a knee-jerk response from utilities facing upheaval in a fast-evolving marketplace. As rooftop arrays become more accessible, traditional power providers have showcased a toolbox filled with tactics for curbing the viability of solar -- including by piling on costs.

Andy Johnson works with the soil. When younger, he served in Peace Corps in Central America for three years, working on conservation practices. Then he worked in the Natural Resource Conservation Service for years, the same agency that his father Paul Johnson headed by appointment from Bill Clinton in 1993. After moving back to northeast Iowa in 2007, he started farming christmas trees and grass-fed beef cows, but thinking about how the concept of conservation applied to his community’s energy use and economy. When stimulus money became available in 2009, Andy used his knowledge of soil and water conservation districts to promote the idea of using those funds toward a energy district around Decorah, IA. The idea became more popular than he imagined, as he and an assembled board of directors won a federal grant. In December 2015, Johnson talked with ILSR’s John Farrell about the Winneshiek Energy District and how they promote energy efficiency and renewable energy for all county residents, as well as what the future holds for distributed energy everywhere.

When people pay their electric bill to an investor-owned utility such as Minnesota’s Xcel Energy, they are generating energy for themselves, but the profit and wealth accrues to the utility’s investors. But now, customers have an opportunity to buy in. Community solar programs are popping up rapidly across the country, offering electric customers an opportunity to own a slice of solar energy production. Most are utility-owned, and almost all limit customer benefits to energy credits on their electric bill. But some community solar models are going further, letting the customers themselves take ownership. One such model is offered by Cooperative Energy Futures. It launched in Minneapolis in 2009 under the leadership of Timothy DenHerder-Thomas, offering members energy efficiency upgrades and renewable energy installations on their own property. Now, thanks in part to a 2013 state law, they’re offering members an opportunity to “own” a share of a community solar garden atop a North Minneapolis church.

Electric cooperatives arose from New Deal legislation that provided government-backed low-interest loans to bring electricity to rural areas that for-profit companies wouldn’t serve in the 1930s. They were engines of the rural economy. But today they face unique challenges, including a disproportionate reliance on coal-fired power, often purchased on decades-long contracts. Additionally, even though rural coops serve 90% of counties with persistent poverty, member engagement has declined precipitously from the golden years, and now few cooperative members even realize they are owners of their electric company. This week Ed Marston, former board member of the Delta-Montrose Electric Association in western Colorado, joins John Farrell on Local Energy Rules to talk about the electric cooperative world. He highlights the good, the bad, and what his and other cooperatives are doing to spur clean energy investment in a region that so desperately needs local economic development.

It’s not sexy. But it can make you warmer. It can even make you cooler. On-bill financing provides loans for energy efficiency improvements through the local utility company, paid back with energy savings on monthly electric (or gas) bills. And it’s a powerful tool for simplifying the financing for energy savings, and for making home comfort and lower bills available to those without the credit to borrow money on their own. On-bill financing is not new. The Tennessee Valley Authority has offered it for years. More recently, numerous municipal utilities and electric cooperatives have created programs. But Midwest Energy, on the prairies of western Kansas, might have the best track record. Brian Dreiling, manager of energy services at Midwest Energy, shared his utility’s story with Local Energy Rules this week, explaining the on-bill program, what makes it successful, and how an investment in the member-owner’s home is an investment in the utility.

Former CEO Dwight Brown did a number on the Cobb Electric Membership Corporation (EMC). Cobb EMC serves around 175,000 member-owners just outside of Atlanta, Ga., and is one of 900 member-owned electric cooperatives in the United States. From the late 1990s on, the co-op’s members lost nearly $400 million dollars to Brown’s for-profit Cobb Energy, a shell entity Brown engineered to drain money from the cooperative. Over a 15 year span, Brown personally pocketed more than $21 million through self-dealing and conspiring with other business entities, including a proposed $2 billion coal-fired power plant that would’ve raised members’ electric rates by 10 to 20 percent in its first year of operation alone. Brown was indicted on more than 30 charges including theft and racketeering in 2011; he is still awaiting trial. Brown and Cobb EMC’s story is more than a story of greed. It remains a stark reminder of just how much can go wrong when a member-owners of an electric cooperative fail to participate in the very electric utility they own and regulate. (For the most part, states do not regulate electric cooperatives.) Mark Hackett, president of member-driven Cobb EMC Forum, joins John Farrell this week to talk about how an engaged membership continues to be essential to defending the vitality of a locally owned electric company.

ILSR's John Farrell was a plenary speaker at the Northeast Sustainable Energy Association's 2016 annual conference in Boston, MA. The conference was held from March 8th through the 10th and focused on advancing the adoption of sustainable energy practices by bringing over 3,500 renewable energy professionals together. John's opening plenary pinpointed key challenges of our current centralized energy infrastructure and the opportunity to ensure local ownership and distributed energy resources. Later on in the conference, John gave a session presentation focusing on the question: Does Electric Grid 2.0 Mean Energy Democracy?