How can Community Choice power the energy revolution?
“The next five years will see more change in the energy industry than has occurred in the previous fifty years.”
So begins “Community Choice Aggregation 2.0 Strategies for Distributed Energy Resources in a CCA Environment,” a recently released a white paper by the inventor of Community Choice Aggregation, Paul Fenn, president of Local Power, Inc., with co-author Charles Schultz. It’s a rare and welcome opportunity to receive an update on the thinking of the man who started it all.
Fenn points out that through localization and ownership of Distributed Energy Resources (DER), Community Choice agencies are well-positioned to optimize emerging clean energy technologies, unlike the large, rigid utilities that are more familiar with – and more invested in – large centralized power plants. “CCA is the only policy in the United States which allows a truly comprehensive approach to creating a new energy business model, by allowing an integration of energy demand and supply from an objective financial perspective unencumbered by utility legacy infrastructure considerations,” Fenn asserts.
When talking to local governmental representatives and community advocates around the state about Community Choice, I emphasize aspects of Community Choice that are unique – things that can only be done via a Community Choice agency. This is in large part what the paper addresses. Unencumbered by large infrastructure and fuel costs, “Community Choice Aggregation enjoys a key competitive advantage…the ability to embrace these new economies of production and deployment of DER, without suffering from the financial conflicts that come with ownership of the old fossil fuel-based centralized legacy infrastructure, and have delayed technological innovation in the utility industry for so many decades.”
Fenn highlights three under-appreciated and under-utilized tools in the Community Choice toolkit, revenue bonds, access to public benefit funds, and on-bill repayment.
In the case of revenue bonds, once Community Choice agencies have established a credit rating, or sooner if backed by the credit rating of a member jurisdiction, they are able to invest in energy projects in their own service territory, owned by the community, boosting the local economy.
With public benefit funds, we all pay a fee on our utility bills to cover the cost of the public benefit programs like CARE for low-income customers, educational programs, and energy efficiency programs, etc. Community Choice agencies have the statutory authority to access these millions of dollars to offer their own tailored programs to reduce fossil power use.
The third tool is a powerful yet underutilized financing mechanism, on-bill repayment whereby efficiency and renewable energy installation can be paid for on the utility bill, avoiding the need for a customer credit check due to the established history of people paying their utility bills.
Details about these three tools and more are described in the paper, linked at the beginning of this blog. More updates from Paul Fenn and Local Power, Inc., are available at www.localpower.com