CCE Working Group Explores Green Energy Sourcing Alternatives

BostonCAN is a member of the Municipal Aggregation Working Group that the City’s Environment Department has formed to help ensure that Boston’s Community Choice Energy (CCE) program reflects community priorities. (Note: Municipal aggregation is the legal term for CCE.) Working group members represent City departments and other stakeholder organizations. Monthly meetings began last December and have served to educate the group about different aspects of aggregation design. The February 28 meeting addressed alternative ways that a program can acquire green energy. Guest speakers Megan Shaw from the Cambridge Energy Alliance and Ann Berwick from the City of Newton each described the option that her municipality chose.

Newton’s program goes live this month with a 22-month contract. The program gets green energy by purchasing Class I RECs. A REC (Renewable Energy Certificate) is earned by a renewable energy producer (for example, a solar or wind farm) for each 1,000 kilowatt hours that it generates. RECs are sold on an open market. When people (including aggregations) buy RECs, they help to repay up-front costs for existing renewable projects and to encourage investment in new ones. Class I RECs are for energy produced in New England, New York, or parts of Canada, where they help to green our regional grid and to create local jobs. Newton’s default offering is 60% green (46% more than the current state requirement, or RPS, of 14%). Newton customers may also opt up to 100% green or down to the RPS level.

Cambridge’s second CCE contract started last November. The previous 18-month contract relied on RECs, prioritizing new-vintage solar RECs (SRECs) in order to incentivize local solar development. When the incentive fell short of its goal, Cambridge designed its current, 24-month contract with an “operational adder” (customer surcharge) that will be used to finance a new, City-owned solar project. Cambridge’s program has an opt-up to 100%; these customers pay for Class I RECs in addition to the adder. The program is currently collecting more money than it can use, and the City is considering different options, such as adding battery storage.

Because recent market prices for electricity have been low, Newton and Cambridge now offer their customers both greener energy and lower prices compared to Eversource. However, prices fluctuate, and Berwick said that Newton was careful never to promise its customers cost savings. Alternative ways to set prices for an aggregation will be the topic of the next working group meeting.

In later meetings, the working group will set priorities for Boston’s CCE program and discuss what design alternatives support those priorities best. To help members prepare, the City provided the following questions about green energy sourcing alternatives:

  • Do we want to use RECS, direct investment in new renewables, or some combination of both?
  • If RECs, do we want to buy a fixed percentage above RPS or a varying percentage based on energy prices? In either case, what’s our target amount of renewables?
  • What types of RECs and/or renewable projects do we want to prioritize?
  • How might we want to change the aggregation over time and in response to new circumstances?
  • Do we want opt-up or opt-down options, and if so, what should these entail?

What do you think? BostonCAN represents its members at the working group, and we need to hear from you to do a good job. Send us a message at BostonClimateAction@gmail.com or at Facebook.com/BostonCAN with your opinions and questions.

Check out the City’s new CCE website for the latest progress indicators.

progress graphic

 

Giving Thanks: Progress Party for CCE Allies

Several dozen climate hawks, including three official representatives of the City of Boston, attended a joyous CCE Progress Party on Nov. 12 at Democracy Brewing in downtown Boston. City Councilors Matt O’Malley and Michelle Wu and the city’s Chief of Environment, Energy, and Open Space, Chris Cook, thanked all the groups that helped push the Walsh administration to adopt our plan to make renewable energy more accessible to all Boston residents through Community Choice Energy.

Chief Cook reported that the Environment Department has concluded interviews with potential consultants to manage the planning and implementation of the CCE program, also known as green municipal aggregation. Councilor Wu pointed out the CCE is a counterweight to the doom and gloom of climate science, noting the opportunity within this crisis. “The steps that we have to take to make this transition to a fossil-free future successful are the only chance that we have to, not only think about the planet and green energy, but also to reduce income inequality and empower our communities.”

Many thanks to the groups that sent representatives, including Boston Student Advisory Council, Community Labor United, Eastie Farm, Greening Rozzie, Sierra Club, Mothers Out Front, 350 Boston Node, and the many other allies who attended. As Councilor O’Malley noted, there’s still much to do before we actually have a default electricity service that offers more renewables than is required by law. And Khalida Smalls pointed out, CCE is just one step to the sustainable and equitable society. We are committed to building climate justice every day and every way we can.

Top 5 Things to Know About Community Choice Energy

The City of Boston has begun the early stages of setting up community choice energy!  As this critical process gets started, there’s never been a better time to understand what this means for you and other Boston residents.

1. What’s in a name?

Community Choice Energy is a tool that’s been used in hundreds of communities across the country and goes by many names: municipal aggregation, municipal electricity aggregation, community choice aggregation, and a few others. The idea is the same: CCE enables the City of Boston to bulk-purchase electricity for City residents.  Buying in bulk comes with a lot of buying power, which allows us to stabilize rates and get more renewables without paying more.  It also means that we can make important energy decisions instead of for-profit utilities and their competitors.

2. Choice is the key word.

Think of CCE like a ‘public option’.  CCE will be the new default, but you can switch to Eversource or a competitive supplier at any time with no penalties. As always, stay informed about competitive suppliers marketing.

3. CCE is for everyone.
CCE allows everyone to be part of the solution to the global climate crisis. While only some people can afford to install solar panels on their roofs, CCE means everyone is able to increase their clean energy.  It makes it a little bit easier to think globally and act locally.

4. CCE is climate-smart.

In 2018, Massachusetts utilities are required to buy at least 12% of their energy from Class I renewables. While this minimum percentage inches up a little each year, climate change impacts are already here and our current goals for renewables are much too slow. With CCE, we can decrease our reliance on fossil fuels and work towards our climate goals

5. CCE means more green, less stress

Monthly energy bills can be a source of financial stress for many Boston families. When it comes to negotiating electricity prices, no one can perfectly predict what the City will be able to get. That said, researchers at Tufts University looked at eight nearby towns that implemented similar CCE programs with 5% additional local renewable energy. In the first half of 2018, these towns averaged 16% lower supply costs than Eversource basic.

 

Here’s more on how it works!

Consumers Don’t Have to Fear CCE

Jon Chesto, one of the Boston Globe’s business writers, has been covering the news about Boston’s process of deciding to implement a municipal electricity aggregation program, what we call Community Choice Energy or CCE. Chesto’s most recent article, published on Sept. 3, failed to mention the reason that Boston is moving forward with CCE: this is the most cost-effective and equitable way to reduce our residential contribution to global climate change.

Extreme heat is one of the ways that Bostonians are most impacted by climate change. We’ve had 21 days of extreme heat — 90 degrees or greater — this summer, and it’s not over yet. Climate Ready Boston’s 2016 Climate Projections Consensus report notes that that average between 1971 and 2000 was 11 days. The pace of climate change keeps speeding up, such that we may have 90 days of extreme heat by 2070.

The people who suffer most from extreme heat are those who can’t afford air conditioning, those who work or live outside, and those who are medically vulnerable. As a matter of climate justice, we must switch to renewable electricity as soon as possible. Making that switch as a whole city makes the transition to renewable energy affordable. This is why CCE is so important.

Chesto’s article also included a statement of concern by a consumer advocate cautioning, “Boston ratepayers should make sure they read the fine print when they receive mailings regarding the city’s electricity-buying program. If they don’t do anything, they would automatically be enrolled in the new program.”This warning makes it sound as if consumers should be wary about Community Choice Energy, and it ignores the fact that Eversource basic supply is also an opt-out program. When you move into a new apartment and want to have electricity, you automatically receive an Eversource account. You may opt out of basic supply by choosing a competitive supplier, but if you don’t, you will be automatically enrolled as an Eversource customer.

Boston’s program will be equally simple: you may opt out if you want, but if you don’t actively chose a different supplier, then the Boston program will be your default. Also, just as with Eversource basic supply, consumers will be able to leave the Boston program at any time — without any cancellation fee. Switching back to Eversource basic supply will be very simple, unlike canceling a contract with a competitive supplier.

Boston’s electricity supply program will not change how Eversource bills us. We’ll still get our bills from Eversource; only the name of the supplier and the rate will be different. Boston’s size should make it able to negotiate rates that are comparable to Eversource’s. According to researchers at Tufts University, eight other towns in eastern Mass. have already implemented programs like the one Boston plans to implement, with 5% additional regionally sourced renewable energy. In the first half of 2018, these towns averaged 16% lower supply costs than Eversource basic.

No one can predict accurately what electricity rates Boston will be able to negotiate when it gets permission from the Department of Public Utilities to request bids on an electricity supply contract. Likely in some six-month periods Eversource will be able to underbid Boston, and in other periods Boston will underbid Eversource. But over the life of that contract, we are very likely to be able to buy at least 5% more green electricity at a comparable rate to Eversource’s dirtier mix. Other towns have succeeded and so can Boston!

CCE savings chart
Source: Woods, Comings, and Stanton, “Boston Community Choice Energy Aggregation and Electric Costs,” Applied Economics Clinic, March 2018.

Boston Takes Next Step on CCE!

Mayor Walsh announced today that the City of Boston will issue a Request for Qualifications (RFQ) for a consultant to design and set up a Community Choice Energy (CCE) program. With this action, the Walsh administration embarks on the actual implementation of CCE.

Readers who remember BostonCAN’s disappointment when the city issued an RFI (Request for Information), and our insistence on a timely RFP (Request for Proposals), may wonder what an RFQ is. Unlike the RFI, which collected data without promising further action, the RFQ announces the city’s intent to issue a contract and invites companies to apply. An RFQ differs from an RFP in that it does not require a proposal (in this case, a program design) as part of the application. An RFQ is more appropriate for CCE because the intent is for the consultant, once hired, to work with Boston’s Office of Environment, Energy, and Open Space (EEOS) and community representatives to design the program.

The RFQ will be issued on August 27, and the deadline for responses is October 10, 2018. EEOS will also form an advisory group of community stakeholders, and we will share more details about that process when we have them.

BostonCAN couldn’t be more thrilled that Boston has decided to move forward with CCE. Not only will CCE reduce greenhouse gas emissions, but it will do so in a way that is inclusive of all Boston’s residents and small businesses. This is truly a win for the entire city.

Questions about Boston’s New Large Scale Renewable Buying Plan

Boston’s Mayor Marty Walsh announced a new plan on Thursday, June 7, to potentially join forces with other large cities around the country to buy into large-scale renewable energy projects together. The initiative will start with an information-gathering phase, to be conducted by Boston and six other cities. Mayor Walsh claimed that the plan will “help power our cities and create more clean energy jobs.”

BostonCAN is excited to see the administration taking this active new step toward carbon reduction. We’re interested in the details of how this large-scale purchasing plan is going to be set up, and what effects it will have, both on our own city and on the country as a whole. Below are some questions that we hope the city will answer as more information becomes available.

Would this project meet the environmental principle of additionality?

The term “additionality” means the extent to which an investment creates more greenhouse gas reduction than would have occurred without it. In particular, we want to know if Boston’s investment would create additional reduction that would not have occurred anyway.

An example of a project that would not meet the additionality criterion would be a wind farm sited in the Midwest. Wind power is already commercially competitive in states with strong natural wind resources and large rural areas with low real estate costs. In these states, market forces are already yielding many wind power projects, which are profitable without government or environmentalists needing to invest in them. Another decision that would limit the additionality of a project would be to put it in a state with a weak regulatory mandate for renewable energy.

Would the city’s investment yield other public benefits to Boston residents besides low-cost renewable energy?

Would our air be cleaner, or our public health improved? Would local innovative energy businesses be stimulated? Would Boston residents gain employment opportunities? In particular, Boston should not try to cut costs by locating clean energy projects in “Right to Work” states with poor worker protections.

How soon could such a plan be implemented?

Climate change is already damaging our cities, and the more slowly we reduce greenhouse gases, the more problems we will have. The potential effectiveness of a project is a combination of how much it will reduce annual emissions and how soon it will start.

A final note: We hope that this new project will not distract from the effort to implement Community Choice Energy (CCE). Multiple industry experts have said that CCE is relatively straightforward. BostonCAN recommends that EEOS follow through with the directive from City Council to set up an advisory group and issue a Request for Proposals to get the ball really rolling on CCE. By implementing it as soon as possible, the city will score a win on carbon reduction even as it explores other promising proposals.

 

CCE is not Rocket Science!

At a hearing on May 30, Boston City Councilors, energy experts, and community members all pressed Alison Brizius, Boston’s Director of Climate and Environmental Planning, for answers she often could not supply. Asked by Councilor Matt O’Malley to project a timeline for implementation of Community Choice Energy (CCE)—the climate mitigation measure passed unanimously by the City Council and signed by the Mayor seven months ago—Brizius indicated that her department, Environment, Energy, and Open Space (EEOS), was still studying its options.

Significance of CCE to Climate Mitigation

The five City Councilors in attendance: O’Malley, Michelle Wu, Ed Flynn, Josh Zakim, and Michael Flaherty, and the two that sent letters of support: Tim McCarthy and Lydia Edwards, all urged EEOS to move more quickly to implement what they see as a significant step to reducing the City’s collective carbon footprint. Invited panelist Ann Berwick, formerly the Undersecretary for Energy for the Commonwealth of Massachusetts and the Chair of the Department of Public Utilities, described CCE as the most significant GHG reduction tool at a municipality’s disposalWinston Vaughn, Senior Manager for Renewable Energy at Ceres invoked Boston’s commitment to the Paris Accord and asked administrators to make good on that pledge to urgently reduce emissions. Liz Stanton, Director and Principal Economist at Applied Economics Clinic, reported on the significant environmental benefits reported by other municipal aggregations.

may 30 hearing

Historical Pricing

Brizius repeatedly spoke of the department’s need for historical pricing data from other municipal aggregations as a way to project what rates Boston might attain through CCE. The panelists urged Brizius and EEOS to stop trying to gather this historical data. Stanton declared, “Historical energy prices are in no way indicative of future pricing.” Vaughn noted that energy pricing is “extremely dynamic,” and Berwick noted that “Trying to get pricing information now will not be fruitful. No one can tell you what prices will be a year from now.”

Boston’s Size

Brizius also referred to Boston’s relatively large size in comparison to other Massachusetts municipal aggregations as an explanation for why the department has not made more progress.  Stanton offered that Boston’s size would put it at an advantage when negotiating the consultant’s fee, as well as the wholesale price of electricity. Berwick also emphasized that virtually all municipalities simply hire an energy consultant to guide the process of implementation. “This isn’t rocket science. Hire an energy consultant to get the ball rolling.”

2018-5-30 CCE Hearing

Cost of a Consultant

Brizius countered that the payment for the consultant might be exorbitant given Boston’s size. Stanton and Berwick both reassured her that all aggregation consultants work on spec—that no city funds would be paid to the consultant, whose fee is generated instead through a small “adder” to the wholesale price per kilowatt that city residents would purchase, and then only if they successfully delivered a favorable bid. Councilor Wu summed up this practice common to all other aggregations in the state: There is no risk, either to the City budget or to ratepayers, of engaging a consultant.

Moving Forward – An Advisory Committee

Councilor Michelle Wu implored Brizius to understand the importance of appointing the CCE advisory committee called for in the Council’s authorization. This committee of Councilors, EEOS staff, energy experts, and community members would resolve the remaining questions about what Boston would want a consultant to be responsible for and what parts of the implementation Boston would perform through dedicated staff. Then, “in quick order” as Wu put it, a request for proposals (RFP) from experienced aggregation consultants could be finalized.

BostonCAN agrees wholeheartedly with Wu’s priorities: Mayor Walsh needs to appoint a CCE advisory committee with the goal of EEOS choosing an aggregation consultant this summer.