Community Electricity Options project

A strategy and six ways to address ambitious community (and corporate) energy goals

Many Colorado cities and large businesses have ambitious renewable energy goals but no practical, cost-effective way to reach them.  This project, and the associated white paper, reviews six possible solutions and recommends an open and inclusive stakeholder process, led by decision-makers at the state level, to investigate the options, identify the best solution for communities and businesses, and determine the legislative and regulatory changes needed to implement it.

Downloads:   Full paper   |   Executive summary   |   One-page brief   |   Example bill title

INTRODUCTION AND PURPOSE

Many Colorado cities have ambitious energy goals but no practical and cost-effective way to reach them. Over one million Coloradans live in cities with the goal of obtaining 100% of their electricity from renewable energy sources. Many large companies also have aggressive renewable energy goals. This paper reviews six possible solutions that would allow cities and large companies to reach their energy goals. Each approach requires state-level legislative and regulatory action.

This paper also suggests a process to move forward. Change requires that decision-makers at the state level (Legislators, Public Utilities Commissioners, and/or the Governor) initiate a process to evaluate the options, identify the best approach, and then bring it into existence. To be widely accepted, the process must be transparent and must invite input from a broad variety of stakeholders, including cities with energy goals, business interests, environmental and consumer advocates, utilities, independent power producers and marketers, and the general public.

The primary intent of this paper is to provide city leaders, lawmakers, regulators, large energy users, and stakeholders of all types with background information on six possible ways that communities could exercise more choice and control over the energy sources used to produce their electricity. The six approaches focus on cities and companies that are served by investor-owned utilities (IOUs); however, options are also described for those served by electric cooperatives ("co-ops") and municipal electric utilities.

Readers who are less interested in the details of the six approaches are invited to read only the Executive Summary and Conclusions sections, or download the one-page brief. Those who wish to dig deeper are provided with an extensive reference list.

TABLE OF CONTENTS

  • 1. Executive summary
  • 2. How Coloradans get their electricity: The three utility types
  • 3. Six ways that cities could reach their energy goals
    • 3.1 Community Choice Aggregation (CCA)
      • 3.1.1 CCA as implemented in California
      • 3.1.2 CCA in a fully competitive state – Illinois
    • 3.2 Community Energy Act (HB18-1428), with improvements
    • 3.3 Municipalization  –  when a city takes over its electricity system
    • 3.4 Utility-provided 100% renewable energy for everyone
    • 3.5 Green tariffs  –  adapting programs for large corporations to cities
  • 4. What about electric co-ops and municipal electric utilities?
  • 5. Conclusions  –  an inclusive stakeholder process led by decision-makers
    • • A legislative interim committee (or other lawmaker-led forum)
    • • A Governor's select committee on community and corporate energy options
    • • An investigatory docket at the Public Utilities Commission (PUC)
  • 6. References

EXECUTIVE SUMMARY

This paper reviews six possible ways that communities could address ambitious renewable energy goals, some of which also apply to large businesses with energy or sustainability goals. The paper recommends a public stakeholder process, led by state level decision-makers, to evaluate the options and determine the best solution(s).

A growing list of Colorado communities have committed to obtaining 100% of their electricity from renewable energy sources – solar, wind, hydro, geothermal – including (as of this writing): Denver; Pueblo; Pueblo County; Boulder; Fort Collins; Lafayette; Longmont; Breckenridge; Summit County; Nederland; and Aspen [1]. Denver's goal of 100% renewable energy** by 2030 [2,3] is an interim goal of its Climate Action Plan to achieve an 80% reduction in greenhouse gas emissions by 2050 [4]. Active campaigns in Colorado that may lead to additional such commitments in the future include: Jefferson County; several Metro Denver cities; Durango; Grand Junction; Manitou Springs; and others. Many large companies, some with a Colorado presence, also have 100% renewable energy goals [5].

The problem:
Over one million Coloradans live in cities or counties with ambitious near-term energy goals, but there is currently no practical way to reach those goals because they have little choice or control over the energy sources used to produce their electricity. These communities, as well as businesses with energy or sustainability goals, deserve a solution that is timely and cost-effective.

The solution:
Six possible approaches are reviewed that would each provide communities with some form of choice or control over the energy sources used to produce their electricity. Each approach requires either modest or major legislative and regulatory action by state level decision-makers.

The recommended approach:
This paper does not advocate for any particular solution, but rather calls for an inclusive and transparent public process to evaluate all of the options – led by state level decision-makers, informed by a broad variety of stakeholders, and focused on arriving at well-informed conclusions that will be widely accepted.

The role of decision-makers:
Legislators, PUC Commissioners, and the Governor must first recognize that a large number of their constituents want and deserve the ability to reach their energy goals, and that a state-level solution is required. Leadership is needed to initiate a process of evaluating the options to arrive at a well-informed conclusion, and then bring the best solution(s) into existence. Examples of such a process include: a Legislative interim committee with expert testimony and public hearings; an "I-docket" or "M-docket" at the PUC with invited speakers and public hearings; and/or a "Governor's select committee on community and corporate energy options," also with public input.

The role of stakeholders:
Groups representing business interests, environmental and consumer advocates, large energy users, utilities, communities with energy goals, and community groups like Colorado Communities for Climate Action (CC4CA) [6] can approach and lobby decision-makers to initiate this process, and then weigh in on it. A grassroots educational component is also needed to raise awareness of the issue in op-eds, public meetings, city councils, town halls, etc. Sustained public support for finding a way that communities and businesses can reach their energy goals is too compelling of a request for decision-makers to ignore. Communities and large corporate energy users are natural allies that could coordinate their efforts for greater impact.

Six ways to address community energy goals:
The six approaches summarized below are described in greater depth in Section 3 of this paper. The intent of the paper is to provide decision-makers and stakeholders with sufficient information and references to comfortably initiate a public process to evaluate the options; the intent is not to provide an exhaustive treatment of each approach.

Options for electric co-ops and municipal utilities:
Unlike IOUs, electric distribution co-ops and municipal electric utilities are democratic, self-governing, not-for-profit entities that are mostly not regulated by the PUC. However, most co-ops in Colorado have even less control over their energy sources than cities served by monopoly IOUs, due to the terms of their wholesale electricity contracts. Nonetheless, several co-ops have found ways to pursue their energy goals anyway, which include:

Municipal utilities, which purchase and/or produce their own electricity, have more freedom than co-ops to choose their energy sources, subject mainly to their leadership's support for the community's energy goals.

The time is right to pursue community and corporate electricity options, because:

** The term "100% renewable energy" in this paper refers to electricity only, not to all uses of energy including transportation and heating, unless otherwise stated.

—  End of Executive Summary  —

For more, download:   Full paper   |   Executive summary   |   One-page brief   |   Example bill title