Micro, But Not Minor: Communities Choose Clean Energy

As an Environmental Fellow placed at the Environmental Defense Fund, I earned the opportunity to serve the Clean Energy team in my hometown, New York City. In my position, I was able to interface with multiple programmatic touch points of city – and state – level efforts to bring all New York communities to a cleaner, more efficient energy landscape.

The main policy framework that guides clean energy efforts in New York state is a roadmap called “Reforming the Energy Vision” (REV), proposed by Governor Andrew Cuomo. The first place to look for when it comes to REV is their filings with the New York State Department of Public Service. All states have their own public utility commission, whose duty it is to regulate rates that companies can charge consumers for electricity and gas service. In any policy filings associated with changing the utility rate structure or about how the utility receives compensation for grid upgrades, your handy-dandy state docket is the best resource. Out of the many filings associated with REV, there is one case concerning Community Choice Aggregation (CCA) that holds enormous potential for disenfranchised communities to reclaim market power when it comes to their utility bill and electricity consumption.

Expanding the market to include stakeholders in low- and moderate-income (LMI) households has the ability to signal to the larger economy that renewable generation will continue to grow. Attracted investors can end up financing more projects thus, deepening the pipeline of tax dollars in-state, as well as providing economic system benefits such as specialized job training.

So what exactly is CCA? According to New York’s Public Service Commission, it is “an energy procurement model… which has been implemented in at least six other states, involves local governments procuring energy supply service for their residents on an opt-out basis.”[1] In a nutshell, here are the potential benefits of CCA:

  • Bargaining power for communities; ability to negotiate better (i.e. cheaper) rates from utilities
  • Allows municipalities to set their own energy goals based on local input, which could focus on:
    • Price stability
    • Increased clean energy generation
    • Support of local generation
    • Inclusion of distributed energy resources
  • Customer education and engagement on energy issues facing New York

However, the proceedings under CCA have been complicated by the fact that municipalities would have to solicit bids and negotiate with energy services companies, or ESCOs, on behalf of their residents. ESCOs have had a disorderly and often, exploitative history with New Yorkers. The simplified story involves customers being promised a lower flat rate for their electricity, compared to the variable rates of traditional utilities, then realizing that the flat rate offered by the ESCO is higher during off-peak periods of the year when rates drop to a more affordable rate. The process of evaluating an ESCO offer may impart a costly burden for customers who have little to no expertise on these matters.

Despite the risks involved, the CCA model holds promise. Community governance has been further planned out to allow eligible municipalities to combine with others to operate joint programs. This enlarged scale of customer participation can lead to wielding more bargaining power when negotiating rates, as well as “obtaining favorable financing options for locally-owned distributed energy resources [DER]”[2].

This brings me to an important element of what CCA enables for a newly organized community – the chance to develop and store locally generated power through a microgrid system. For LMI housing developments, developing a microgrid can not only be a physical asset to the residents, but allow them to participate in the technological innovations of the energy industry.

Marcus Garvey Apartments is one such example. The housing development has joined the ranks of hospitals and universities, whose similar campus structures adopted a microgrid solution to meet their energy needs. With a solar and storage system installed among their rooftops, they have become a microgrid, capable of “islanding” the same way a hospital would in the light of an emergency. Islanding is a huge component of a notion called energy resiliency. Resiliency is metric of reliable, uninterrupted service of electricity to a utility’s consumers throughout the year. The microgrid’s ability to keep the lights on in the case of an extreme weather event is the main benefit; if you are not reliant on the main grid for your energy needs, you are less at risk when it comes to experiencing outages. This is part of a wider strategy called energy resiliency, and the Marcus Garvey Apartments isn’t the only property that is catching on.

Image courtesy of Demand Energy.

The use of solar panels is just one option in a grab-bag of cutting edge microgrid energy resources, like combined heat and power (CHP). In the Marcus Garvey application, solar energy will be used in conjunction with energy efficiency retrofits to maximize benefits. With the addition of lithium ion batteries, the apartments’ needs are met with a hybrid system providing clean and reliable power.

Besides the cutback of greenhouse gas emissions, such as carbon dioxide, the buildings’ renewable energy generation means more than environmental benefits. This embrace of technological innovation provides the affording housing community with the potential electrical power savings from low-carbon and renewable sources.

In the future, the CCA framework, coupled with investments such as microgrids, will undoubtedly increase the options available to residential customers and help them access the same benefits that were previously limited to higher consuming customers.

[1] Case 14-M-0224; Order Instituting Proceeding and Soliciting Comments.

[2] Case 14-E-0224; Order Authorizing Framework for Community Choice Aggregation Opt-Out Program.

For any questions and comments, please email me at soli.shin@duke.edu.