Publicly Owned Utilities and Community Choice Aggregators as Accelerators of Decarbonization Goals.
- Jul 6, 2020 4:32 pm GMT
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Abstract. (draft 07/2/2020; not for publication or distribution).
Publicly owned utilities (POUs) and Community Choice Aggregators (CCAs) are cohorts of electrical power enterprises with increasing potential for accelerating decarbonization. Both groups now include significant cases of utility scale generation by deployment of underutilized renewable technologies, including those of geothermal and hydrogen. Notably, in multiple cases the financial framework of POUs and CCAs has allowed allocation of substantial subsidies for conversion of end uses to electrification at scale. Although energy experts have emphasized decarbonization of power, reliable data shows as much as 69% of U.S. carbon emissions in fact originating with fossil fuel based space and water heating, transportation and industry. The argument is thus compelling for support of the electrification capacity of POUs and CCAs by policymakers, private sector firms and energy specialists with targeted strategies promoting the growth and expansion of these enterprises. Although investor owned utilities (IOU) have increased electrification initiatives, their record in this sphere is less than adequate and they are not expected to achieve carbon reduction goals mandated by multiple states.
Introduction / Summary.
POUs are not-for-profit electric power enterprises owned and operated by municipalities or regional districts. According to estimates by trade associations 85% if POU electricity is procured from wholesale electricity markets while 15% is generated internally. In 2019 approximately 2,000 POUs distributed over 49 states supplied nearly 15% of U.S. electricity. CCAs, on the other hand, are municipalities or special districts procuring power directly from the wholesale markets rather than relying on electricity provided by local IOUs. Power delivered by about 550 (?) CCAs dispersed over the eight states with enabling legislation is estimated at 5% (?) of the U.S. total. On average POUs and CCAs supply electricity to their customers at rates 10% to 15% below those of IOUs, with equal or greater reliability. Although the over-all record on POU procurement of renewable sources is mixed, examples of exceptional performers in this category are numerous. Among CCAs nearly 20% of power procured exceeds state RPS requirements.
Although regulation of POUs and CCAs varies across states the oversight is largely limited, allowing the enterprises significant autonomy for managing finances and operations. Increasingly, POUs and CCAs have been funding energy efficiency programs. More promising has been their investment in expanded internal generation with renewables, in many cases reducing costs to levels enabling allocation of generous subsidies for conversions to electrification of end uses at scale.
While solar and wind have been dominant as generation sources, previously unfeasible power based on geothermal and hydrogen technologies is approaching cost parity with solar and wind. Importantly, geothermal and hydrogen do not the present the siting challenges of solar and wind in urban environments. Both technologies have been deployed successfully by POUs and CCAs in California, Nevada and Utah. Geothermal and hydrogen power may offer partial solutions to a potential supply deficit of renewable generation.
The moment may thus be opportune for an action plan galvanizing POUs and CCAs to expand their numbers and capacity. State governments, private sector firms, trade associations and NGOs would have instrumental roles in a transition of this scope. Within a half-decade examples of successful decarbonization at scale by POUs and CCAs would almost certainly influence the business practices of IUOs and policy trajectories charted by state energy officials, thereby accelerating the pace of a systemic energy sector transformation.
NOTE: Foregoing abstract and introduction/summary are lead components of extended paper which will include citations of source.