Local Energy Rules

"It's the only time I've done a rate increase when nobody was opposed," says Ed Regan of the Gainesville utility's feed-in tariff for solar power.  The program, launched in 2009, has resulted in nearly 15 megawatts of new, local solar energy generation on or near buildings in the northeast Florida town, enough to make it one of the leading communities in per capita solar worldwide.  The program is open to participation by anyone in Gainesville, with the utility buying all solar energy in the program on a fixed price, 20-year contract. It all started about ten years ago, when Pegeen Hanrahan was elected mayor of Gainesville and Ed Regan was serving as the assistant general manager for strategic planning.  Intern Wade Underwood and I spoke with them earlier this year. At the time, the Gainesville electric utility was heavily invested in coal power and was looking for ways to diversify its energy sources and protect itself from volatile fossil fuel prices.  Conservation and biomass were on the table (among other options) and solar energy was of interest, Gainesville being in the Sunshine State.  Ed said the utility had used net metering and rebate programs to encourage distributed solar development, but a few local agitators had been encouraging the utility to consider a feed-in tariff program (sometimes called a CLEAN Program in the U.S.). While the utility's options were being debated, Ed had an opportunity to travel to Germany with the Solar Electric Power Association and learn about their feed-in tariff program.  To his surprise, when he presented his findings to the local energy commission, their reply was, "why can't we do that here?" The utility set up the program, targeting 4 megawatts of solar per year from 2009 through 2016.  At the time, Ed recalls thinking to himself, "there's no way we'll ever get 4 megawatts of solar." He was wrong.  The simplicity of the program made it of great interest to residential and commercial customers alike.  It simplified a lot of issues for commercial participants in particular, where the utility customer might not be the same as the building owner.  It also made life a lot easier for tax exempt entities, like nonprofits and schools.  The feed-in tariff "opened the floodgates." Ed suggested that this kind of program is much easier for a municipal utility to provide than a for-profit, because there's a breakdown in utility regulation.  A for-profit (or investor-owned) utility expects to make a rate of return by owning their power plants.  With the feed-in tariff, they don't, but a municipal utility isn't in it for the money. The program was also not terribly expensive, resulting in a rate increase of less than 1%.  It also remains wildly popular, with support from over 70% of Gainesville residents. We asked Pegeen whether or not she felt the program's development hinged on utility support, or whether popular pressure on municipal utilities elsewhere could also get good local solar programs off the ground.  Although popular and political support was important, she said, it would be like "pushing a rope" to put a feed-in tariff in place without utility staff on board. The future of the feed-in tariff is uncertain, but largely because it has been successful at building a local solar market and driving down the price.  Will it continue?  Maybe not, but the city remains committed to helping its citizens invest in clean local energy. This is the 8th edition of Local Energy Rules, a new ILSR podcast that is published twice monthly, on 1st and 3rd Thursday.  In this podcast series, ILSR Senior Researcher John Farrell talks with people putting together great community renewable energy projects and examining how energy policies help or hurt the development of clean, local power.   Click to subscribe to the podcast: iTunes or RSS/XML, sign up for new podcast notifications and weekly email updates from the energy program!

In this episode of Local Energy Rules, John Farrell speaks to Brian Minish, CEO of South Dakota Wind Partners about a community wind project that attracted over 600 local investors. The project was the brainchild of four state organizations rooted in rural South Dakota--the East River Electric Cooperative, South Dakota Farm Bureau, South Dakota Farmers Union and South Dakota Corn Growers. Hoping to broaden ownership in a wind farm project proposed by Basin Electric in Crow Lake, these groups worked with Brian to figure out how to add local investors to the mix.

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.

In this episode of Local Energy Rules, John Farrell speaks to Brian Minish, CEO of South Dakota Wind Partners about a community wind project that attracted over 600 local investors.  The project was the brainchild of four state organizations rooted in rural South Dakota--the East River Electric Cooperative, South Dakota Farm Bureau, South Dakota Farmers Union and South Dakota Corn Growers. Hoping to broaden ownership in a wind farm project proposed by Basin Electric in Crow Lake, these groups worked with Brian to figure out how to add local investors to the mix. The project took shape in the shadow of Basin Electric's proposed wind farm near Crow Lake, with local farmers and other South Dakotans interested in taking part in the wind project.  The result was a community-based carve out of the 100+ megawatt facility: 7 turbines owned by over 600 farmers and local residents.  The turbines were constructed as part of the larger wind farm, and the Wind Partners organization contracted with the cooperative electric utility for operations, maintenance, and purchase of the electricity. Brian Minish helped structure the offer to investors, using the now-expired federal cash grant (in lieu of the Investment Tax Credit) to broaden the opportunity for more local investment.  Each of the four organizations kick-started the fundraising with $20,000 and shares were sold in increments of $15,000 to other investors. As Brian notes during the interview, South Dakota Wind Partners (SDWP) structured the offering in a way that would make the program available to different groups of investors.  Some were able to invest as equity partners and share in the tax losses generated in the early years, while others just wanted a fixed return on the debt (basically making a fixed interest loan to the project). Brian attributes much of his success with SDWP to the willingness of Basin Electric to partner with local groups, making the process easier for everyone involved.  He continues to work with a number of groups in different states hoping to replicate the success of SDWP. Unfortunately, the federal cash grant has since expired, making it more difficult to make investment open to normal investors. In a previous interview, Brian notes that federal renewable energy policy matters a lot for community-based projects like South Dakota Wind Partners.  “There’s a lot of political benefit in letting local people become investors in the project,” Minish said, “local ownership can help reduce opposition to wind power projects.” Brian keeps searching for ways to open up opportunity for community-based energy projects and overcome barriers, and he may be having some success.  The SDWP website highlights two other community-based projects, one in New York and one in Texas.  It's a good sign that, despite the challenges, SDWP may be a model for community wind around the country. This is the 7th edition of Local Energy Rules, a new ILSR podcast that is published twice monthly, on 1st and 3rd Thursday.  In this podcast series, ILSR Senior Researcher John Farrell talks with people putting together great community renewable energy projects and examining how energy policies help or hurt the development of clean, local power.   Click to subscribe to the podcast: iTunes or RSS/XML, sign up for new podcast notifications and weekly email updates from the energy program! Photo credit: Flickr user tinney

This week John Farrell and Wade Underwood talk with Paul Spencer, President and founder of the Clean Energy Collective (CEC) in Carbondale, CO. The CEC is pioneering the process of delivering clean power-generation through medium-scale (mostly solar) facilities that are collectively owned by participating utility customers. In many ways, their community energy model is the “holy grail” because it has proven replicable in several places around the United States. “From the outset, we really strived to find something that was going to be widely applicable,” Paul says in the interview. It’s no easy task. Many other community solar projects have been one-offs, finding ways to work within a particular state or utility regime but unable to bring that model to another community.  The Clean Energy Collective did a great deal of research on taxation, incentives, and securities law before they launched several years ago.  As a result, the CEC model reaches beyond their start in Colorado to places like New Mexico, Minnesota and Vermont. They’ve also overcome the problem of sharing electricity output from their community energy projects.  Only eight states have so-called virtual net metering laws that allow individuals to share electricity output from a common energy project.  CEC has developed their own billing software for utilities that allows them to distribute the bill credits without needing any changes in state law.  The result is several partnerships with rural cooperatives that gives the CEC a new market and the cooperative members a chance to buy in to a community solar array. The Clean Energy Collective is also special because participants don't lease their panels, they own them.  Paul explains that this was a conscious decision: [A lease] was the first model we looked at...We ran the numbers...it's a pretty minimal return over time. You just break even, you don't own the thing anymore, and it goes away.  We then ran a comparison to ownership...it's night and day.  Over the life of a system, an ownership model will produce nearly 3 to 4 times as much asset value as a lease.  That's 3-4 times as much payback to the consumer...we said, 'we gotta figure out how to have people own this.' The Clean Energy Collective continues to expand their model into new places, continuing a tradition of partnership with local utilities.  It also benefits from making the process of participation remarkably easy.  Says Paul, Clean Energy Collective is "the only solar company I know of in the world where you can fully purchase a solar system online, any time of the day you want.  We never have to come out to your house, we never have check your roof...you don't even have to have a home." This is the 6th edition of Local Energy Rules, a new ILSR podcast that is published twice monthly, on 1st and 3rd Thursday.  In this podcast series, ILSR Senior Researcher John Farrell talks with people putting together great community renewable energy projects and examining how energy policies help or hurt the development of clean, local power.   Click to subscribe to the podcast: iTunes or RSS/XML, sign up for new podcast notifications and weekly email updates from the energy program!

This week John Farrell and Wade Underwood talk with Paul Spencer, President and founder of the Clean Energy Collective (CEC) in Carbondale, CO. The CEC is pioneering the process of delivering clean power-generation through medium-scale (mostly solar) facilities that are collectively owned by participating utility customers. In many ways, their community energy model is the “holy grail” because it has proven replicable in several places around the United States.

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.

In this episode of Local Energy Rules, John Farrell and Wade Underwood talk with Susan Osborne, the former Mayor of Boulder, CO, about that city’s effort to take control of its energy future. Thanks to Susan’s leadership and the vision of Boulder’s citizens, the city adopted a ballot measure in the fall of 2011 to break free from its incumbent utility, Xcel Energy, to pursue cleaner, local power on its own terms. As Susan tells us, Boulder didn’t set out to “blaze a trail,” but for a growing number of cities across America considering municipalization, there’s a lot to learn from their remarkable story.

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.

In this episode of Local Energy Rules, John Farrell and Wade Underwood talk with Susan Osborne, the former Mayor of Boulder, CO, about that city’s effort to take control of its energy future. Thanks to Susan’s leadership and the vision of Boulder’s citizens, the city adopted a ballot measure in the fall of 2011 to break free from its incumbent utility, Xcel Energy, to pursue cleaner, local power on its own terms. As Susan tells us, Boulder didn’t set out to “blaze a trail,” but for a growing number of cities across America considering municipalization, there’s a lot to learn from their remarkable story. The process started in 2003 when Boulder resumed studying the option to create a municipal utility.  With a climate-action plan already in place, and a local carbon tax already financing conservation and clean energy, the once nascent issue became a serious option in Boulder. Creating a municipal utility would allow for more control over the grid, reductions in greenhouse gas emissions and an increase in clean energy production. Xcel forestalled the city's investigation when it offered to pilot its Smart Grid City in Boulder – a program that deployed advanced meters and fiber optic cables to improve information flow on the local electricity grid. Unfortunately, the smart grid pilot came in over budget and underwhelming for the city's residents. Despite further efforts to negotiate with Xcel to secure a lower carbon energy future, the city's franchise contract with Xcel wasn't renewed, and citizens replaced the lost revenue with an electricity tax to give the city time to study alternatives.  Municipalization was back on the table. By 2011, it became clear that Xcel wasn't willing to give the city what it wanted (a last-ditch offer was stymied when Xcel insisted that the status quo also be placed on the ballot).  The city put municipalization on the ballot in 2011 and the campaign began.  Xcel spent over $1 million dollars in a failed attempt to kill the ballot initiative, outspending local energy advocates 10-to-1.  In the end, Boulder citizens voted in November 2011 to part ways with Xcel, voting to form a municipal electric utility and to tax themselves to fund the investigation of whether this new utility could meet ambitious clean energy targets. The effort continues, with city officials still talking to Xcel about options.  But the release of a recent report on municipalization suggests that the city can significantly increase renewable energy, reduce emissions, lower costs, and improve reliability. In other words, there seems little reason to settle for the status quo. Like hearing from Susan Osborne?  Check out this video of her talking to Minneapolis citizens about Boulder's efforts for clean, local energy. This is the 5th edition of Local Energy Rules, a new ILSR podcast that is published twice monthly, on 1st and 3rd Thursday.  In this podcast series, ILSR Senior Researcher John Farrell talks with people putting together great community renewable energy projects and examining how energy policies help or hurt the development of clean, local power.   Click to subscribe to the podcast: iTunes or RSS/XML, sign up for new podcast notifications and weekly email updates from the energy program!

This week, John Farrell and Wade Underwood talk community wind power with Randy Caviness, an Iowa farmer and member of Green Energy Farmers.  Working with over 180 investors in the local community, Randy helped build eight utility-scale wind turbines with community ownership, providing clean, local power to municipal and rural electric utilities in southwestern Iowa.   The idea began back in 2007, when Randy had an idea to build two wind turbines for the rural electric cooperative serving nearby farming communities. With grants from the USDA rural development program, Iowa production tax credits, and the section 1603 cash grant incentive from the 2009 Recovery Act, the two turbines were built by 2010. With that federal incentive slated to end by 2011, Randy and his fellow energy farmers made plans to erect six more turbines, financed by 180 local investors.  Shares in the projects were sold to friends and neighbors in the community. Most of the investors live within 30 miles of the turbines they own, and the dividends, tax-credits, and economic benefits remain in the community. The legal work was complicated, but not insurmountable.  The state tax credits were capped at 2.5 megawatts, so each of the wind turbines are financed and owned by separate LLCs. Randy, along with local banks, was instrumental in setting up the financing schematics for all eight turbines. Community support for the projects was and is strong, and the local utilities have appreciated the source of clean, local, low cost power.  Unfortunately, the expiration of the federal cash grant means there are limited opportunities to replicate the project, but the work of Randy and Green Energy Farmers stands testament to the power of collective ownership of clean energy. This is the 4th edition of Local Energy Rules, a new ILSR podcast that is published twice monthly, on 1st and 3rd Thursday.  In this podcast series, ILSR Senior Researcher John Farrell talks with people putting together great community renewable energy projects and examining how energy policies help or hurt the development of clean, local power.   Click to subscribe to the podcast: iTunes or RSS/XML, sign up for new podcast notifications and weekly email updates from the energy program! Photo credit: Dan Brouillette, found here

This week, John Farrell and Wade Underwood talk community wind power with Randy Caviness, an Iowa farmer and member of Green Energy Farmers. Working with over 180 investors in the local community, Randy helped build eight utility-scale wind turbines with community ownership, providing clean, local power to municipal and rural electric utilities in southwestern Iowa.

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.

In this edition of Local Energy Rules, John Farrell and Wade Underwood speak with Steve Johnson of Convergence Energy about a successful 660 kilowatt community solar project near Delavan, WI.  The project required 33 separate LLCs to take advantage of the state's net metering rules, and also used the limited-time federal cash grant program to pull it together.  Unfortunately, the policy environment isn't as favorable for repeats, and Convergence has interest in, but no plans to replicate the project. Just north of Delavan, Wisconsin, is Dan Osborne’s nursery farm. Where you once found a bean field now sit 80 solar panels on 100 tracking towers, generating power for over 125 homes. It’s a small, but successful energy harvest.  The solar farm was developed by Convergence Energy of Lake Geneva, WI. Steve Johnson, vice president of business development, spoke to John Farrell and Wade Underwood about the solar farm in Delavan, “The genesis of the project from the beginning was to try and provide an offsite location for individuals interested in investing in solar.” Many individuals interested in going solar can be stymied because their property has tree cover or inadequate roof space, so Dan Osborne’s fields offered a better option, a community solar project. Dan, who had worked with Convergence in the past, offered up 14 acres of his farm for the 660 kilowatt (kW) facility outside of Delavan. From there, Convergence arranged for 33 individual Limited Liability Companies to invest in 20 kW increments, which are sold back to the utility at retail price as a part of the net-metering policy (note: the utility’s net metering policy does not require the solar project to offset on-site load).  The state’s net metering policy caps projects at 20 kW, hence the 33 separate companies. In addition to receiving the retail electricity price for solar electricity produced, the projects also received grants from the state’s Focus on Energy program and used the cash grant option (since expired) in lieu of the 30% federal tax credit.  Project investors signed up for either an 11-year or 20-year investment term (with an 8% return on investment) after which the project ownership reverts to Convergence Energy. As Steve says, their investors are happy with the solar farm, but there have been precious few opportunities for similar networked projects to grow.  The federal cash grant program has expired and the Focus on Energy incentives have been reduced.  Despite the changed landscape, Steve and Convergence Energy are keeping their eyes open for opportunities where the success from the Osborne farm might be replicated. It’s small seed that they want to see growing in many places. This is the third edition of Local Energy Rules, a new ILSR podcast that will be published twice monthly, on 1st and 3rd Thursday.  In this podcast series, ILSR Senior Researcher John Farrell talks with people putting together great community renewable energy projects and examining how energy policies help or hurt the development of clean, local power.   Click to subscribe to the podcast: iTunes or RSS/XML, sign up for new podcast notifications and weekly email updates from the energy program! Photo credit: Dan Lassiter, from Walworth County Today

In this edition of Local Energy Rules, John Farrell and Wade Underwood speak with Steve Johnson of Convergence Energy about a successful 660 kilowatt community solar project near Delavan, WI. The project required 33 separate LLCs to take advantage of the state's net metering rules, and also used the limited-time federal cash grant program to pull it together. Unfortunately, the policy environment isn't as favorable for repeats, and Convergence has interest in, but no plans to replicate the project.