July 27, 2020 | By Heather House and Lacey Shaver RMI
As US cities and counties transition to clean energy for their own operations and communities, many are finding that stakeholders and policies beyond their jurisdictions affect their ability to
July 27, 2020 | By Heather House and Lacey Shaver RMI
As US cities and counties transition to clean energy for their own operations and communities, many are finding that stakeholders and policies beyond their jurisdictions affect their ability to purchase clean energy. Policy and regulatory decisions made by states, utilities, public utilities commissions, and wholesale market governing bodies determine the clean energy procurement options available to cities and counties. This can create challenges for meeting locally-defined resolutions and commitments.
To overcome these challenges and drive faster progress on renewables and carbon-free goals, local governments are starting to engage with old stakeholders in new ways to change the rules of the game. By removing regulatory and legislative obstacles, local governments are creating new pathways to access affordable, clean energy.
To help cities and counties better understand potential high-impact engagement opportunities, the American Cities Climate Challenge Renewables Accelerator released a new interactive tool, the Local Government Renewables Action Tracker. The tool highlights efforts by local governments to work directly with the institutions and decision-makers who influence their ability to access clean energy and control the broader electricity system.
Here are four ways local governments are engaging with stakeholders to decarbonize their electricity supply:
1) Partnering with Investor-Owned Utilities
Cities and counties often are required by state law to buy electricity from a regulated investor-owned utility (IOU) and lack the ability to choose their electricity supplier or generation source. While some IOUs offer renewable energy programs, these options don’t always meet city needs. Worse still, some cities have no options for purchasing renewable electricity.
To overcome these circumstances, some local governments are partnering with their utilities. For example, the City of Denver and Xcel Energy developed a partnership agreement in 2018 to define and collaborate on shared climate and energy goals.
These types of partnership agreements can lead to the creation of new renewables programs or custom utility solutions that enable local governments to purchase renewables on a large scale. In North Carolina, Duke Energy and the City of Charlotte signed an agreement that laid out the ways they could partner on clean energy work. One year later, Charlotte became the first city to sign a large-scale deal through Duke Energy’s new Green Source Advantage green tariff program.
2) Engaging in State-Level Regulatory Proceedings
Many key decisions around the implementation of state energy policies, including decisions that govern IOUs, are made by state public utility commissions (PUCs). PUCs allow stakeholders to voice their needs as electricity customers, which can be a good opportunity for local governments to advocate for more renewables. However, engaging in commission proceedings can be a time-consuming and cumbersome process for local governments with limited resources to navigate.
Increasingly, cities and counties are asking for more renewables on the grid by commenting and providing testimony to their state PUC. This includes commenting on their utility’s integrated resource plans (IRPs), which are long-range plans that communicate how an electric utility intends to develop new generation assets over the next 10–20 years. In many states, utility IRPs are required by law and providing input on them can be an impactful way for local governments to influence their regional grid mix and increase renewable energy generation.
During the Indianapolis Power & Light Company (IPL) IRP process, the City of Indianapolis submitted a public letter to encourage IPL to explore a more aggressive retirement scenario for the Petersburg Coal Generating Station and increase renewable generation. Indianapolis cited an October 2019 report by Rocky Mountain Institute that found that clean energy portfolios declined in cost by 80 percent since 2010, are now lower-cost than new gas plants, and are projected to undercut the operating costs of existing gas plants within 10–20 years.
In comments to the Georgia Public Service Commission (PSC), the City of Atlanta asked Georgia Power to expand residential energy efficiency and renewable energy programs, provide greater access to utility data to improve energy efficiency efforts, increase municipal access to renewable energy, and build a new local microgrid to improve community resilience. In response to customer comments like these, the PSC required Georgia Power to more than double solar energy procurement over the next five years from one gigawatt (GW) to 2.2 GW.
Local governments are also increasingly advocating for alternative forms of utility regulation and business models. This includes performance-based regulation (PBR), a type of utility reform that incentivizes electric utilities to demonstrate performance on metrics such as greenhouse gas reduction, efficiency, and customer service.
This approach contrasts with traditional “cost-of-service” business models that incent utilities to build more physical assets, which generally result in new buildouts of gas power plants and pipelines, locking in emissions for years to come. The City and County of Honolulu and the County of Hawaii have been actively engaged in advancing PBR through workshops, working group meetings, filing written comments to Hawaii’s PUC and creating thoughtful proposals recommending new PBR mechanisms for their utility to adopt.
3) Influencing Statewide Energy Policy
When stakeholders come together to voice their needs to legislators, it has the potential to create large-scale change. Local governments are starting to get involved at the state level by calling for changes to state climate and clean energy legislation. There are a few