Progress on CCE program guidelines

Update: The City of Boston reports that it has submitted its CCE plan to the DPU on June 20!

At the May 30th meeting of the Community Choice Energy (CCE) Working Group, the City of Boston reported that it is still waiting for the state Department of Energy Resources (DOER) to authorize the City to submit its CCE plan to the Department of Public Utilities (DPU). The City anticipated a quick turn-around with DOER, and had not been asked for any additional materials beyond the draft plan it submitted to DOER weeks ago. The City hoped to have its plan approved by DPU in time to make its first foray into the electricity market in January. That timeline now seems doubtful with the delay at DOER and DPU’s expectation that it will need as much as 8 months or more to review Boston’s plan. Eversource is also lobbying for a later start date so that it might have more time to prepare the data transfer to Boston.

Also on May 30th, BostonCAN and other working group participants dove deep into the Values and Principles statement that will guide decision-making as the program details are spelled out and the plan is implemented. In addition to the three values presented for discussion: additionality, preference for local generation, and affordability, the discussion generated 4 additional principles. BostonCAN led the drafting of language codifying a goal of rapid greenhouse gas reduction through CCE’s green power purchases. We also proposed a new principle that residents of Boston’s environmental justice (EJ) neighborhoods should have priority access to those jobs created by CCE. Our Green Justice Coalition allies Youth on Board (YOB) raised the important question of how “affordability” would be defined. YOB also put forward an idea to help make the green electricity even more affordable for low-income residents: a voluntary extra payment option for those who can afford more. We were just beginning to discuss a fourth new principle (meaningful engagement of residents of EJ neighborhoods in the details of the plan design) when the meeting had to end.

Due to the fruitful discussion, City staff announced that they would convene an additional working group session in July to finalize the Principles and Values document. We are excited to have this additional opportunity to work with the City and allies to craft this important document which will guide this program for years to come.

Speak out on Boston’s draft CCE plan!

The City of Boston wants public comments on its draft plan for Community Choice Energy (CCE). You can submit written comments until 5pm on Friday, May 17.

Please consider taking 15 minutes this week to send a short comment on the plan. Email david.musselman@boston.gov with “City of Boston’s Aggregation Plan” in the subject line.

In particular, we encourage you to comment on this section of the plan, which leaves open the possibility that Boston might look outside of New England for its renewable energy:

“The City will require that the RECs [Renewable Energy Certificates] either be created and recorded in the New England Power Pool [NEPOOL] Generation Information System or be certified by a third party such as Green-e.” (page 16)

Put simply, buying RECs is a way of paying for renewable energy. The “either…or be certified by a third party such as Green-e” in this sentence indicates that Boston is not committed to buying all its green energy from generators within our region (i.e. only those recorded by NEPOOL). We are concerned about this lack of commitment.

We see several advantages to keeping Boston’s electricity dollars within New England as much as possible. By supporting the local renewables industry, we encourage the development of more green generators in our own region. This will create jobs locally. It will also hopefully enable the retirement of some older, carbon-burning generators, which will reduce not only the greenhouse gas emissions that cause climate change, but also other types of pollution that threaten local public health. Additionally, the City Council’s authorization for CCE specified that the renewable content should come from our region.

Some may argue that the retirement of carbon-fired plants in other states is still a win for us, since greenhouse gases produced anywhere affect climate globally. What complicates this issue is the fact that the environmental effectiveness of green energy purchases vary from state to state. The strength of a state’s energy regulations and other market conditions affects the value – both environmental and financial — of its RECs. If, to save money, Boston were to buy from a state where green energy purchases do not stimulate new development or shutter dirty plants, Boston might claim to be “green” without effecting much change. This is called “greenwashing.”

If local renewables ever become so expensive as to make it impossible to offer any additional renewable content in Boston’s default CCE rate and still keep prices comparable with Eversource’s, only then would we want the City to consider purchases from outside New England. In that event, we would want the City to ensure that any out-of-region RECs we buy would be effective in stimulating further development of green energy generators.

For more details on how RECs work, we recommend this short video from the EPA or this essay from journalist David Roberts. Roberts specifically discusses the difference between Green-e RECs and RECs sourced from generators in our region.

For more about NEPOOL, see nepoolgis.com/about.

For an example of “greenwashing,” consider this short video from Cascade Policy Institute.

bnef-recs-regions

An illustration of the relative higher value of RECs generated in New England, compared to other regions. Image source: https://www.vox.com/2015/11/9/9696820/renewable-energy-certificates.

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.