Collectives seek to lower cost of renewable energy, offer choice at local level

Collectives seek to lower cost of renewable energy, offer choice at local level
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Nonprofit public agencies that grant communities collective control over their power sources are broadening access to lower the cost of renewable energy in the few states where they are authorized to operate.

One such agency is East Bay Community Energy (EBCE), one of California’s growing number of Community Choice Aggregators (CCAs), which pairs with local governments to procure electricity on behalf of retail electric company customers. The idea is to lump together several retail electricity accounts to obtain wholesale prices and serve as the default electricity provider in certain areas. 

Dianne Martinez, the mayor of Emeryville, Calif., and the chair of EBCE’s board of directors, said the idea was surfaced locally by residents at an Alameda County Board of Supervisors meeting, who ultimately provided a startup loan.

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“The way that our CCA was born was very much out of activism,” Martinez said.

As of 2017, a National Renewable Energy Laboratory (NREL) report estimated that about 750 aggregators were serving about 5 million customers in eight states: California, Illinois, Massachusetts, New Jersey, New York, Ohio, Rhode Island and Virginia.

CCAs can only operate in states that “have enabling legislation as a gatekeeper,” which involves obtaining voter approval and ensuring that local governments have the infrastructure and contracting capacity to undertake energy procurement, according to Jenny Heeter, a member of the Market and Policy Impact Analysis Group in NREL's Strategic Energy Analysis Center.

But most U.S. states have traditional utility markets, in which a monopoly utility controls most of the territory — making the passage of that requisite legislation unlikely, said Eric O'Shaughnessy, an independent renewable energy research consultant who co-authored the NREL report with Heeter.

EBCE launched in 2018 with the goal of providing more renewable energy at competitive rates, and with the participation of Alameda County and 11 of its cities — which include Emeryville, Berkeley and Oakland.

EBCE says its customers are saving nearly $10 million annually in comparison to what they would have paid Pacific Gas and Electric, the traditional utility. EBCE buys most of its power from clean sources such as wind, solar and hydropower — selling that power to customers at low rates.

EBCE invests its earnings back into the community and creates local green energy jobs and clean power projects in the participating municipalities, according to the agency.

Martinez said she is pleased that her goal to reduce greenhouse gas emissions is in sync with those of EBCE.

“By setting these really, really high goals we can benefit everyone in our communities with cleaner air, and more hope for our environment and put those jobs right back into our local communities,” Martinez said.

Some 37 communities in the regions north and east of EBCE’s area of service belong to another CCA called MCE, which was California’s first such program.

MCE spans four counties — Contra Costa, Napa, Marin and Solano — and like EBCE, sources most of its power from renewables, according to the agency. It says its customers have saved more than $68 million since it launched in 2010. 

Another focus of MCE is to provide affordable clean energy to the underserved communities.

“It's really our goal to make clean energy affordable and accessible to everyone — with the understanding that communities of color and economically disadvantaged populations and other marginalized communities often receive the first and the worst impacts of climate change and fossil fuel pollution,” said Dawn Weisz, CEO of MCE.

Within MCE’s area of coverage, such disadvantaged populations include agricultural workers in Napa County and Contra Costa County, according to Weisz.

MCE and EBCE have discount programs available to qualifying lower-income individuals, which supply 100 percent renewable power to residents of disadvantaged communities.

They are now also both members of California Community Power, a Joint Powers Agency that includes 10 such CCAs, which Martinez says will increase collective buying power and lead to larger discounts.

CCAs are different from community solar arrangements, or shared solar gardens, which enables customers to purchase or lease part of an off-site shared solar panel system, on public buildings, private lands and brownfields, according to NREL.

As of December 2020, community solar projects were available in 39 states, plus Washington, D.C.

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“People can already buy renewables,” said O'Shaughnessy, the energy research consultant. “The key distinction that we always make is with community solar — community solar is opt in.”

CCAs also provide an instant convenience — and in the case of Californian agencies, customers are automatically “buying 60 recent renewables” with no additional effort, O'Shaughnessy said.

While O'Shaughnessy does not foresee CCAs dominating the entire U.S. electricity landscape, he emphasized their importance on a local level — particularly in California, where he views these agencies as responsible for accelerating the statewide shift toward curbing greenhouse gas emissions.

“CCAs in California are absolutely more ambitious in their targets than the state and utility was,” he said. “So much of California now is third-party CCAs that the idea of pulling the state target forward really matters.”