Local Energy Rules

A project of the Energy Democracy initiative at the Institute for Local Self-Reliance, Local Energy Rules is a twice monthly podcast with Senior Researcher John Farrell, sharing powerful stories of successful local renewable energy and exposing the policy and practical barriers to their expansion. Our audience is researchers, grassroots organizers, and grasstops policy wonks who want vivid examples of how local renewable energy can power local economies. Most shows are 15-20 minutes in length, released twice a month.

“Utility regulation and rates is a contact sport,” says Karl Rabago, and that makes the implementation of a new "value of solar" policy complex. Will distributed solar grow better with a transparent, value-based contract price? How does it differ from ...

“Utility regulation and rates is a contact sport,” says Karl Rabago, and that makes the implementation of a new “value of solar” policy complex. Will distributed solar grow better with a transparent, value-based contract price? How does it differ from … Read More

A project of the Energy Democracy initiative at the Institute for Local Self-Reliance, Local Energy Rules is a twice monthly podcast with Senior Researcher John Farrell, sharing powerful stories of successful local renewable energy and exposing the policy and practical barriers to their expansion. Our audience is researchers, grassroots organizers, and grasstops policy wonks who want vivid examples of how local renewable energy can power local economies. Most shows are 15-20 minutes in length, released twice a month.

It's one thing to own your utility and have a commitment to renewable energy, but it's another thing to deliver. The municipal utility in Palo Alto, CA, set an ambitious target of 33% renewable energy by 2015 and to ultimately deliver a carbon neutral electricity supply. They will reach 48% renewable power in 2017 and met the carbon neutral goal starting last year. Learn more about the strategies one municipal utility pursued to drive down its carbon emissions and acquire solar energy in this interview with Jim Stack, Senior Resource Planner of the Palo Alto Utilities, recorded via Skype on Feb. 27, 2014.

It's one thing to own your utility and have a commitment to renewable energy, but it's another thing to deliver. The municipal utility in Palo Alto, CA, set an ambitious target of 33% renewable energy by 2015 and to ultimately deliver a carbon neutral electricity supply. They will reach 48% renewable power in 2017 and met the carbon neutral goal starting last year. Learn more about the strategies one municipal utility pursued to drive down its carbon emissions and acquire solar energy in this interview with Jim Stack, Senior Resource Planner of the Palo Alto Utilities, recorded via Skype on Feb. 27, 2014. How Can a Utility be Carbon Neutral? The foundation of Palo Alto's energy supply is hydro power, making up as much as half of their total electricity generation each year. But other renewable energy supplies the other half, at a time when most utilities have targets of 25% renewable or less. The chart illustrates how Palo Alto plans to get 23% of its energy from solar, 11% from landfill methane recovery, and 12% from wind power in 2017. The carbon neutral target, while impressive, doesn't mean that no fossil fuels are used. The statement means that on an annual, net basis, the cities electric customers produce no carbon emissions. Building on Low-Cost Solar The drive toward renewable energy and a carbon neutral energy supply was aided by dramatically falling costs for solar energy. When the utility went out for bids in 2012, it found solar producers willing to sell the utility power for 7¢ per kWh, a price that's remained relatively steady since then. Low cost solar energy has meant that the city's nationally recognized green energy purchasing program, with 20% customer participation, eliminated the price premium because clean energy was no more expensive than traditional power. Having Control Matters "If you were a customer of an investor owned utility, you’d be much less likely to see a program like [Palo Alto's] put in place simply because investor-owned utilities have a much more traditional business model focused on profits and the bottom line," says Stack. Local control was a key to the success of the pursuit of a low-carbon energy system in Palo Alto. They aren't hampered by regulators and the city's bond rating means the municipal utility can also access lower cost capital than investor-owned utilities. Municipal ownership has one big drawback, however, making the transition to renewable energy that much more impressive.  The city can't access the 30% federal tax credit for solar energy projects that private developers can.  While they can still sign contracts with these developers to deliver solar, they miss the economic opportunity of direct ownership. Keeping it Local Palo Alto hasn't been able to develop as much power in town as it would like, confesses Stack. As a mostly built-up urban environment with high land costs, and in a very sunny environment, local solar energy costs nearly twice what it costs to buy from projects nearby. All their renewable power comes from California, however, within a two hour drive of the city. The city does have programs focused on local distributed generation and energy efficiency, however. Already, 6.5 MW of solar energy has been installed on local rooftops (serving about 4% of peak demand). The utility intends to use its feed-in tariff, community solar, and other initiatives to increase local solar to 23 MW, serving 15% of peak energy demand and 4% of total sales. Can it Work for You? Stack says there's nothing stopping other municipal utilities from moving in the same direction.  Renewable energy is less expensive than just about anything else and offers long-term price stability. For communities without municipal utilities, he suggests lobbying for voluntary green purchase programs, community solar, and working on developing community-based renewable energy projects.   For more information on Palo Alto Utilities,

A project of the Energy Democracy initiative at the Institute for Local Self-Reliance, Local Energy Rules is a twice monthly podcast with Senior Researcher John Farrell, sharing powerful stories of successful local renewable energy and exposing the policy and practical barriers to their expansion. Our audience is researchers, grassroots organizers, and grasstops policy wonks who want vivid examples of how local renewable energy can power local economies. Most shows are 15-20 minutes in length, released twice a month.

"We can't do it as an individual, But four hundred communities aggregating and asking for local wind power and solar power - that's really powerful." Oak Park, IL, is one of hundreds of Illinois towns using their authority to buy electricity in bulk on behalf of its residential and small business customers. So far, most communities have used the policy – known as community choice aggregation – to negotiate for less expensive electricity compared to the default electric utility, Commonwealth Edison. Many have also purchased renewable energy credits with their power, but it's not clear if the practice is greening or green-washing the power supply. Learn more about the incremental steps forward with community choice aggregation in Illinois and the potential for much greater collaboration between cities in this interview with outgoing Sustainability Manager K.C. Doyle of Oak Park, recorded via Skype on Mar. 28, 2014. K.C. is also the founder of the Prairie State Local Government Sustainability Network, providing peer-to-peer networking of municipal officials around sustainability and climate planning. Apologies for the egregious keyboard noise and sniffling, we had some technical difficulties with muting our host's microphone.

"We can't do it as an individual, But four hundred communities aggregating and asking for local wind power and solar power - that's really powerful." Oak Park, IL, is one of hundreds of Illinois towns using their authority to buy electricity in bulk on behalf of its residential and small business customers. So far, most communities have used the policy – known as community choice aggregation – to negotiate for less expensive electricity compared to the default electric utility, Commonwealth Edison. Many have also purchased renewable energy credits with their power, but it's not clear if the practice is greening or green-washing the power supply. Learn more about the incremental steps forward with community choice aggregation in Illinois and the potential for much greater collaboration between cities in this interview with outgoing Sustainability Manager K.C. Doyle of Oak Park, recorded via Skype on Mar. 28, 2014. K.C. is also the founder of the Prairie State Local Government Sustainability Network, providing peer-to-peer networking of municipal officials around sustainability and climate planning. Apologies for the egregious keyboard noise and sniffling, we had some technical difficulties with muting our host's microphone. Starting an Avalanche of Local Control in Illinois The Illinois state legislature authorized "community choice aggregation" in 2009, allowing cities in this already deregulated electricity market to buy energy in bulk for their customers.  It's a 20-year-old policy, and such local city (or county) aggregations serve about 5% of utility customers in Illinois, Ohio, Massachusetts, Rhode Island, and California. Most states Uptake of local aggregation was slow at first. Only a couple other communities had tried it when Oak Park city staff brought the issue to their town board in December 2010. The city held its referendum in April 2011, and two-thirds of voters approved of the city taking more control over electricity purchases. By the end of 2012, dozens of Illinois communities had held votes approving local electricity purchase aggregation. Cheap, Clean, or Both? Once the town board had voter approval for aggregation, it began discussing options. The city could simply bid for cheaper electricity, or it could focus on more energy efficiency and renewable energy. One of the city's goals was to use a small fraction of the potential energy savings to set up an energy efficiency fund to offer energy audits or upgrade city lighting. That concept was dropped because of concerns that, amidst what was already a somewhat complex discussion for a small city, residents might perceive this fund as some sort of energy tax. On clean energy, the decision was easier, although the outcome remains murky. Doyle notes that citizens were very clear in their interest in renewable energy: "The answer was overwhelmingly...yes, we want the best price possible and yes, we want renewable energy as our power mix.  In fact, we want it all renewable energy." In fall of 2011, the city went out to bid for green energy, with 100% of it covered by renewable energy credits (RECs) from wind power. RECs - Renewable Energy Credits ILSR and others have explained the concept of RECs elsewhere, but what's important to understand is that buying RECs didn't change the actual source of electricity flowing to Oak Park homes and businesses, nor did it mean the construction of new renewable energy facilities. "We are not getting wind power through our electric socket...we're getting the same mix everyone in northern Illinois is getting from ComEd...but we can say we offset that purchase with the purchase of wind RECs," says Doyle, by "buying the environmental benefit of an already built wind farm in our energy market area (PJM)," which spans five states and part of Canada. What's clear is that the competitive energy market doesn't offer small cities like Oak Park much choice.

A project of the Energy Democracy initiative at the Institute for Local Self-Reliance, Local Energy Rules is a twice monthly podcast with Senior Researcher John Farrell, sharing powerful stories of successful local renewable energy and exposing the policy and practical barriers to their expansion. Our audience is researchers, grassroots organizers, and grasstops policy wonks who want vivid examples of how local renewable energy can power local economies. Most shows are 15-20 minutes in length, released twice a month.

Community choice aggregation describes a situation where a town can become the bulk buyer of electricity on behalf of its residential and small business customers. Such local aggregations serve about 5% of utility customers in Illinois, Ohio, Massachusetts, Rhode Island, and California, but it's Marin Clean Energy in California that stands above the crowd for their commitment to renewable energy and their nearly decade-long fight to offer service. Learn more about the struggle for local control of the energy system and its numerous advantages in this interview with Marin Clean Energy Executive Director Dawn Wiesz, recorded via Skype on Feb. 13, 2014.

A project of the Energy Democracy initiative at the Institute for Local Self-Reliance, Local Energy Rules is a twice monthly podcast with Senior Researcher John Farrell, sharing powerful stories of successful local renewable energy and exposing the policy and practical barriers to their expansion. Our audience is researchers, grassroots organizers, and grasstops policy wonks who want vivid examples of how local renewable energy can power local economies. Most shows are 15-20 minutes in length, released twice a month.

Community choice aggregation describes a situation where a town can become the bulk buyer of electricity on behalf of its residential and small business customers. Such local aggregations serve about 5% of utility customers in Illinois, Ohio, Massachusetts, Rhode Island, and California, but it's Marin Clean Energy in California that stands above the crowd for their commitment to renewable energy and their nearly decade-long fight to offer service. Learn more about the struggle for local control of the energy system and its numerous advantages in this interview with Marin Clean Energy Executive Director Dawn Wiesz, recorded via Skype on Feb. 13, 2014. Why is Local Aggregation Worthwhile? I began by asking Dawn if the effort to form an aggregation in Marin County, almost 10 years in the making, was worthwhile. Definitely, she said: "We've been able to achieve many of the goals we set out...purchasing more than double the amount of renewable energy...offering rates that are competitive and in many cases lower."  Marin Clean Energy has prices that are competitive with incumbent Pacific Gas & Electric, and also advertises power that is 50 or 100% renewable. When Did you Know You'd Beat the Utility? Dawn said that it wasn't clear they'd made it until they finally offered electricity service on May 7, 2010. "It was a down to the wire development." The incumbent utility, Pacific Gas & Electric, had financed a ballot campaign to kill community choice aggregation by increasing the vote threshold from a majority to two-thirds, fought them at the Public Utilities Commission, and set up phone banks to dissuade potential customers from signing up. "There's really not a level playing field," says Weisz.  The incumbent monopoly provider has "brand recognition, an army of lawyers" and other resources that it deployed to stop the locals.  Ultimately, Marin Clean Energy won, and about 75% of customers in their service territory now take electricity from Marin Clean Energy. What Makes Local Aggregation Competitive? Dawn notes that the local aggregation has several factors in their favor in offering competitive energy service to, and more renewable energy than, the incumbent utility.  As she says, "we have low operating costs - we are a small and nimble shop – we procure in a very prudent way, maximizing renewables within our portfolio, and we don't have shareholder profits." More Local Energy? Marin Clean Energy only has about 1 megawatt of local renewable energy, a solar array at a local airport, but they have big plans for more. The mechanism for more local energy is a Deep Green fund, money from customers who have opted for 100% renewable electricity.  Half the revenue from that fund will help finance pre-development for renewable energy built within the utility service area. The utility also offers a feed-in tariff program, long-term contracts for buying solar or other renewable energy projects 1 megawatt or smaller that are built locally. Dawn says they also have plans to support community solar or "syndicated solar," allowing customers to buy energy from solar arrays built locally. Advice for Other Aggregators? Dawn has two pieces of sage advice for communities jumping into local aggregation: Walk before you run Don't let the perfect be the enemy of the good In particular, the first piece of advice refers to the desire of Marin Clean Energy organizers to offer a high renewable energy share to everyone right away, but that they phased it in slowly in order to make it work. Also, she notes that it's really essential to get community buy-in with lots of local conversation and that taking the time to do so is what ensures all the pieces fall into place. What’s Next? Dawn says they're seeing a real change with the utilities in California that may indicate a smoother road for future community choice aggregation efforts. Sonoma Clean Power is planning to launch in the next year,

"We have a perfect storm for renewables," says Jan TenBruggencate, second-term board member of the Kauai Island Utility Cooperative. The Hawaiian utility, made local when the investor-owned utility left the business a decade ago, is surging toward 40% renewable energy in the next year, with a third of that total from customer-generated solar. Half its daytime energy will come from solar arrays by the end of 2015. Learn more about how a cooperative utility has blown past purported technical barriers to renewable energy and pioneered energy storage to make solar a prominent part of their energy mix in this interview with Jan, recorded via Skype on Feb 25, 2014.

"We have a perfect storm for renewables," says Jan TenBruggencate, second-term board member of the Kauai Island Utility Cooperative. The Hawaiian utility, made local when the investor-owned utility left the business a decade ago, is surging toward 40% renewable energy in the next year, with a third of that total from customer-generated solar. Half its daytime energy will come from solar arrays by the end of 2015. Learn more about how a cooperative utility has blown past purported technical barriers to renewable energy and pioneered energy storage to make solar a prominent part of their energy mix in this interview with Jan, recorded via Skype on Feb 25, 2014. Half Their Power from the Sun Solar energy made sense even before it became so cheap for the island utility, which has long been reliant on oil to fuel its power plants. The price spikes in 2008 and persistently high oil prices made fuel-free renewable energy an imperative for gaining control over electricity costs. By 2014, the 65 MW utility's combination of large-scale projects at their substations plus a substantial amount of customer-sited solar energy (nearly 14 MW) mean that half of daytime energy demand is met with sunshine-fueled electricity. The achievement is notable since the solar resource, while good, isn't extraordinary. In fact, it's only about 5% better than Minneapolis. Customers an Unexpected Source of Power Although shifting to renewable energy was a conscious move, "it wasn't deliberate at all. It's not clear to me that we anticipated that," remarked Jan. The improving economics of solar, and generous state and federal tax credits sufficient to cut the cost by 65%, created an avalanche of interest in solar. Jan estimates that as many as 10% of their customers now have a solar array: "it's a slam dunk for folks who have the cash to do the projects." Not Net Metering Offering net metering to its customers (with retail electricity prices in excess of 30¢ per kilowatt-hour, was not the utility's idea, confesses Jan. Rather, it was a pilot program imposed by the state's Public Utilities Commission. KIUC shared the concern of many utilities about the balance of costs and benefits of net metering, an issue still being hotly debated (see a compilation of studies on net metering from RMI). When the net metering pilot expired, the utility switched to an avoided cost payment for projects 100 kilowatts and smaller. Customers with solar arrays still buy all their power from the utility, and sell all their generated electricity back to the utility for 20-25¢ per kilowatt-hour (the utility's avoided cost of getting energy from traditional sources, nearly 10 times what mainland utilities quote for the price of acquiring energy). That avoided cost figure may change soon, says Jan, since soon renewable energy will be the "traditional source," rather than fossil fuels. Why a Cooperative? Most cooperative utilities were formed in the 1930s to electrify rural areas where investor-owned utilities didn't see a profit, but KIUC was formed about 10 years ago. The investor-owned utility serving the island left the business, and local leaders helped establish a cooperative. They've found many advantages to this structure: We’re operating under the cooperative model...The cooperative tool is a remarkable tool for small communities ... a combination of being able to make our own decisions as a community, as opposed to having those decisions made far away...Our access to low-cost capital helps our membership...the fact that we don’t need to make a profit...helps keep our costs under control. The Role of Energy Storage "Storage is the great, fascinating story of the next 10 years in energy," says Jan. KIUC is already using battery storage to overcome limitations of existing fossil fuel generation to handle “ramp rates,” or the speed with which intermittent cloud cover can cause solar arrays to go from low to maximum production in a matter of seconds.