Cities pass all-renewable plans: A grid threat? 

Ballot initiatives that empower cities to seek all-renewable electricity were approved by voters in Ohio and New Jersey last week, marking the spread of a popular idea that has also raised concerns about the impact on the grid.

The approved measures will establish new community choice aggregation (CCA) programs in the cities of Columbus, Ohio, and East Brunswick, N.J. Those programs give municipal officials authority to take the lead in contracting with suppliers of wind and solar energy, with the goal of transitioning 100% of the city’s retail energy demand to renewable sources by 2023 and 2030, respectively.

The falling cost of solar and wind power on wholesale markets has made CCAs an increasingly popular climate policy for cities and towns nationally. Nine states have passed laws that explicitly allow cities to form them, and at least five others are weighing such legislation, according to the Local Energy Aggregation Network.

In California, more than 10 million residents are covered under such programs.

Some CCAs there have been instrumental in policy changes. In 2018, for instance, the Redwood Coast Energy Authority in Northern California made an unsolicited request to federal officials to help build floating wind turbines – a technology that likely won’t be in place for another decade but is considered a potential long-term option for lower emissions. And this year, a second CCA, Monterey Bay Community Power, signed a memo of understanding to buy 1,000 megawatts of offshore wind from a prospective developer in the central part of the state.

But CCAs in the state often have an uneasy relationship with investor-owned utilities and regulators, who have raised doubts about whether granting too much local control might end up making it harder to balance the wider grid, threatening its reliability.

In 2018, a team commissioned and led by staff at the California Public Utilities Commission wrote in a white paper that the decentralization of energy procurement was “challenging the current regulatory framework.”

“Without a coherent and comprehensive plan, the current policies in place may drift California to an unintended outcome and breakdown in services like the [2001] Energy Crisis,” they warned.

The proliferation of CCAs outside of California could raise similar questions, particularly if they come with 100% renewable mandates. Large utilities, which distribute the power, must balance grid reliability with carbon-neutral goals that rely on intermittent sources of electricity like wind and solar.

One 2019 report by the National Renewable Energy Laboratory asserted that problems with resource adequacy – the ability to provide power during peaks in demand – and costs “may be universal” for CCAs in regulated markets.

Jenny Heeter, a co-author of the report and a senior energy analyst at NREL, emphasized the cost issue, saying CCAs had in some cases seen the cost competitiveness of their power erode, compared with that of the incumbent utility. Some CCAs aren’t allowed, under state law, to enter into long-term contracts for energy, which can increase the price of supplies – and cause communities to back out of the arrangement and into the arms of big utilities.

“That cost piece is essential,” she said.

Still, as cities cast about for policies to slow climate change, it’s “certainly possible” that an increasing number could form CCAs – starting with those located in the nine states where laws have enabled them, added Heeter.

In New Jersey, for instance, renewable advocates are pressing for well over a dozen additional cities to create programs over the coming year, giving local officials a greater say over how utilities go about decarbonizing. By law, every utility in the state must hit 100% carbon-neutral energy by 2050, but official road maps have left the door open to capturing carbon dioxide from fossil fuels rather than pursuing zero-emissions sources. The utility that would supply power to East Brunswick, PSE&G, declined comment.

“I know reliability is a concern out there,” said Charlie Kratovil, an organizer at Food & Water Watch, which campaigned for the initiative in New Jersey. “But the electricity regulators and the markets are really apples to oranges, between here and California.”

“While nobody knows what the future holds, here in these towns, we’ve had zero issues with reliability. It’s up to the grid operators to meet the needs of all the towns,” he added.