USDN Final Report GENERAL SUMMARY SUBMITTED 1
Draft General Summary (for insertion into combined report)
By Local Power LLC
December 5, 2019
This document is produced for a dozen U.S. municipalities, centered in the northeast,
led by a small group of towns in western Massachusetts operating or preparing
Community Choice Aggregation (CCA) programs. Inspired by recent leaps and bounds
by California CCAs that are leveraging major greenhouse gas reductions through
physical and local renewable energy investment, these municipalities retained Local
Power because it was integral to the development of CCA 2.0 in California. Local
Power’s task was to articulate an equity lens-based, customer investment-oriented
CCA 3.0 for the 1300 or so municipalities in Massachusetts, New York, New Jersey,
Ohio, Illinois and other states allowing CCA outside California.
This document presents an evolution from short-term procurement of power with
additional purchase of certificates from renewables credit brokers, developed in
Massachusetts, to physically building renewables committed to the CCA customers for
20+ years, which was developed in California. Moreover, the paper articulates the
latest or emerging evolution of CCA to CCA 3.0, to make it possible for limited capacity
CCAs with 1.0 programs to offer physical carbon mobilization benefits, through a CCA
program platform enabling the planning, engagement and commitment of customer
investment in “advanced renewables,” aka integrated Distributed Energy Resources
(DER). The evolution of CCA 1.0 to CCA 3.0 may be summarized as follows:
•CCA 1.0 is an “outsourced” model (passive CCA, passive consumer) based upon a
brokerage arrangement developed in Massachusetts in which CCA municipalities
have a direct role in program operation, with all procurement functions assigned to a
broker or retailer, with minimal or no staff. These were formed to create customer rate
discounts and purchase renewable energy certificates from REC marketers to meet/
exceed state law.
•CCA 2.0 is a “power agency” (active CCA, passive consumer) model developed in
California added dozens of staff to purchase wholesale power directly rather than
through wholesale markets, and to offer long-term contracts to engage developers
for newly developed regional renewable energy facilities.
•CCA 3.0 is a third generation model (active CCA, active consumer) which employs a
micro agency model, based in data and municipal services infrastructure. It employs
a smaller, more focused CCA staff working in collaboration with member
municipalities to engage customers (including municipal agencies) to voluntarily
invest monthly bill energy payments in behind-the-meter DER in their buildings,
blocks, neighborhoods, or municipal boundaries.
The CCA 3.0 program design adapts CCA 2.0’s regional energy agency model to the
smaller CCA budgets prevailing outside California. This design is for single towns or
small groups of contiguous towns that have no or little existing staffing, no significant
surplus general funds to directly spend on CCA, and limited funding sources under
their current program designs, which have only one staff person and are otherwise
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outsourced to energy brokers/contract administrators. As with CCA 2.0, 3.0 enables
municipalities to use energy localization to reform community wide load shapes,
enhance local resiliency, expand renewable service to onsite electric vehicles and
heating and cooling systems, and engage low-income residents in equity benefits.
The National Guidance section of this report (pp.xx-yy), which includes an analysis of
the Massachusetts market, is an articulation of the pathways to advanced CCA that
defines a transition or startup progression for funding and staffing a micro agency of an
estimated eight to 20 staff, rather than the 30 to 50 staff level, as in California., The
report demonstrates how CCA 3.0 triples the potential climate impactfulness of 2.0 by
systematically incorporating onsite renewable HVAC/hot water and electric vehicles
into a non-exporting DER design. As in CCA 2.0, 3.0 creates an option for CCAs to
procure directly from wholesale generation sources rather than relying on energy
traders/retailers. It also includes a transitional option for CCAs wishing to remain with
retail traders, while in-sourcing functions currently associated with energy brokers to
CCA staff, in order to build internal capacity for a more robust local procurement
process. The national report identifies several dozen CCA 3.0 type programs already
existing and proven throughout the U.S.; identifies barriers and pathways under
existing law to implement advanced CCA. A second section articulates a maximum
climate mobilization impact analysis of equity that is centered on CCA product
definition, which helps CCA customers transition from “renting” to “owning” their
energy by making premium payments dedicated to future bill offsets, which is similar to
purchasing solar panels. Most crucially, the CCA 3.0 program design reduces a CCA’s
staffing requirements by incorporating (1) municipalities that are members of the CCA
in investment and customer loan administration, and (2) customers, in the form of
shares and customer cooperatives, as organic voluntary activities to augment and drive
energy localization.
The Massachusetts-only section of this report (pp.xx-yy), focuses on the most current
efforts of CCAs to implement local renewable energy and energy efficiency programs in
the state, by CCA programs that outsource to brokers and retailers. This report
identifies a number of innovative programs in the area of local renewable development,
and expresses doubts about the need for CCA 3.0, or appropriateness of municipalities
to in-source broker functions,, recommending that CCA programs not be expanded to
include local development, but that municipalities wishing to do this may do so
separately.
In general, the difference between the approaches presented is one of incrementalism
versus climate mobilization. CCA 3.0 contains a threefold expansion of CCA’s potential
climate impact, creates a partnership structure between CCAs and their member
municipal governments to engage customers investment at a whole new level, and
uses local government to plan and manage local build-outs at scale. Whereas CCA 2.0
was itself a shift from brokers to large regional government entities, CCA 3.0, while
achieving a smaller programmatic footprint, requires even more in-sourcing and
authentic “community” services and personnel to effectively engage customers in
voluntary investment. In contrast, the Massachusetts section articulates a local green
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development pathway for Massachusetts-based broker-run programs, includes good
examples of policies, but results in a lack of leverage and scale which is inherently
incremental in nature. It does not present an opportunity to realize the potential of
CCA to serve as a broad platform for climate mobilization. The report presents two
options: one for governments that wish to implement good CCA programs, and
another for those who are ready to implement transformative CCA programs.
There is an urgent need for such programs to address the U.N.’s March, 2019 call for a
“profound transformation of energy” to be completed by 2030, recognizing Secretary-
General Antonio Guterres’ more recent description of current efforts to address climate
disruption as “utterly inadequate,” in his words because “what is lacking is political
will.” (Madrid, 12/1/19). CCA 3.0 is designed for thousands of U.S. towns that do have
this political will, in Massachusetts and throughout the United States that have adopted
climate emergencies and climate mobilizations, signed the Paris Accords targets, or set
ambitious 100% renewable and carbon reduction goals. In comparison to the pilot
scale renewables of conventional CCA 1.0 business models that prevail outside
California, CCA 3.0 presents, an authentic platform for a Local Green New Deal for
such communities to lead the energy transformation.