Giving consumers ownership of their energy choices – Richard Asinof

by Richard Asinof, ConvergenceRI.com, contributing writer

An interview with Scott Ridley, one of the champions of the Cape Light Compact, offering consumers the benefits of public power aggregation

As the Biden Administration moves ahead in the development of offshore wind energy, with Vineyard Wind being approved and Revolution Wind now on the docket for environmental review, the next stage in the energy industry’s renewal plans is upon us, driven in large part by the existential crisis of the climate emergency and the deisre to reduce carbon emissions.

The creation of an offshore wind industry may yet serve as another stake through the heart through our perverse relationship with the fossil fuel industry – if, and only if, there are sufficient changes in regulation and accountability around the business of the electricity grid.

Here in Rhode Island, as much as there has been positive movement in the recent enactment of the Act On Climate law [which Gov. Dan McKee often refers to, in what could be construed as a Freudian slip, as the Act on Clean Air law], there still remains an apparent lack of political will when it comes to enforcing environmental regulations and reining in the greed and abuses of the fossil fuel industry.

• Witness the efforts the R.I. Energy Facilities Siting Board to fast track a hearing on the proposed expansion of Sea 3 in the Port of Providence to build out its expansion of the its infrastructure, only to be halted by an outcry of community activists and legislators, who marshaled more than 400 comments, most opposing the expansion of the propane facilities, forcing the EFSB to push back the submission deadline for comments to May 28. [R.I. Attorney General Peter Neronha also called for a full review of the project, saying the proposed expansion of the fossil fuel infrastructure may be inconsistent with the state’s policies on climate change.]

• Similarly, there was the accelerated effort to move forward with the proposed facility to burn medical waste in West Warwick, using what many believe is an unproven pyrolysis technology, with CommerceRI and the Division of Statewide Planning shepherding approval for a $17.2 million bond deal despite unanswered questions about claims that the burning of waste to energy was “renewable” energy. The application by MedRecycler-RI pending before the R.I. Department of Environmental Management indicated that the proposed facility would emit 20,881 tons of carbon dioxide, according to a recent story by ecoRI News.

In turn, once again, R.I. Attorney General Peter Neronha stepped into the fray, asking that any state approval process by R.I. DEM be paused “until proper analysis and certifications are complete.”

But wait, there’s more:

• It turns out that in the four years since five wind turbines went into operation off Block Island, National Grid has made some $46 million in excess profits from delivering electricity through the cable, according to filings by the utility in response to questions by state regulators, as reported by Alex Kuffner in The Providence Journal.

The money, according to Kuffner’s reporting, was going into National Grid’s pockets on top of what was estimated for operations and maintenance of the cable, taxes on it, and even how much the company calculated it needed to pay off its installation and construction costs over time while still earning a reasonable profit.

Worse, as Kuffner reported, it’s money paid entirely by Rhode Islanders through a surcharge on their electric bills. [The alleged scam by National Grid in pocketing money from surcharges on customers’ electric bills is reminiscent of how utilities once used to collect millions from consumers in what were known as phantom taxes – taxes never paid for which they charged consumers, as documented by Richard Morgan at Environmental Action in the 1980s.]

There is also the ongoing regulatory battle over natural gas infrastructure on Aquidneck Island. As State Sen. Kendra Anderson tweeted recently: “Beware of the Aquidneck Island Narrative! Energy Transitions,” with a link to the story in E&E News: Leaked docs: Gas industry secretly fights electrification, looking at how Eversource and other utilities “remain wedded to fossil fuels  even as they take steps to green their businesses,” including investments in three offshore wind projects.

Changing the status quo
There is, of course, another energy path consumers can choose, one that was pioneered in Massachusetts by the Cape Light Compact, a project coordinated in large part by Scott Ridley, known as community choice aggregation. Ridley, a former colleague of Morgan’s at Environmental Action, had worked extensively on public power issues.

The story of the Cape Light Compact and its successful enterprise to aggregate consumers to purchase their own power has enormous potential relevance in Rhode Island, as the state grapples with its future energy choices and opportunities fo residents to have more control over the decision-making process around the grid.

John Farrell, the director of the Energy Democracy Initiative, has suggested that one route to achieving community choice aggregation would be to expand publicly owned banks or utilities to participate in the ownership of an offshore wind project, as reported by Tim Faulkner, who recently left his position at ecoRI News after a decade of covering the environmental beat.

“The license of fossil-fuel companies and utilities to pollute without consequences caused the climate threat,” Farrell said, as reported by Faulkner. The goal of such community choice aggregation, Farrell continued, would be to “shrink the economic and political power of investor-owned utility companies, so that people and the planet come before shareholder returns.”

However, as documented by Faulkner, in Rhode Island, there isn’t much appetite for public ownership among state energy officials:

The Rhode Island Office of Energy Resources (OER) balked at engaging the notion of public energy ownership. The agency is reluctant to discuss social-justice strategy and quickly slams the door when it comes to tilting the model toward citizen ownership: “We have no further comment at this time,” OER spokesperson Robert Beadle said when asked by Faulkner about the concepts of keeping revenue and decision-making local through public ownership of offshore wind.

In a subsequent email, Faulkner reported: Beadle said that project financing is a critical component of advancing a proposed renewable-energy project, particularly those at scale. He said current practices leave equity decisions to the developer.

ConvergenceRI recently interviewed Ridley, who is a principal at Ridley and Associates, with more than 30 years of experience serving local and state government, non-profit organizations, and private clients. The tale told by Ridley is often missing from the narrative about the ongoing dialogue around offshore wind energy development.

[Editor’s Note: For transparency purposes, ConvergenceRI was also a colleague of Ridley at Environmental Action. Further, ConvergenceRI was a member of the same affinity group as Ridley at the 1977 occupation of the Seabrook, N.H., nuclear power station, while covering the story as managing editor of The Valley Advocate in Amherst, Mass.]

ConvergenceRI: What do we need to know/relearn about public power as we seek to change our perverse relationship with the fossil fuel industry?
RIDLEY: I think what we need to do first is understand what it means to light, and heat, and power our homes with electricity. I think we can all agree that this is an essential service that has become increasingly critical to our lives, economy and security.

The basic problem is that we treat it like a commodity. We rely on private companies to make decisions on policy and largely set pricing. There is a layer of state and federal regulation, but how effective that regulation is varies widely. Just look at what happened in Texas this past winter.

Communities that have operated not-for-profit local electric systems for the past century or more – known as “public power” systems – and there are about 2,000 of them across the country [as well as rural cooperatives] have provided models for how to deliver electricity as an essential service. Communities that try to create these not-for-profit systems usually meet stiff opposition from private utility companies that don’t want that competition.

In the mid-1980s I wrote a book with a colleague, Richard Rudolph, [Power Struggle: The Hundred Year War Over Electricity, Harper & Rowe, 1986] which examined just how this fight between public and private interests has affected development of the industry and our economy and the environment. [See second image.]

I still get calls from people who ask how did you know what things would be like today. My answer is it wasn’t crystal ball gazing, it’s that much of the basic structure and influence of the industry hasn’t changed. The bright side is that with the development of more local distributed generation like solar and wind, and advance of energy efficiency and the emergence of storage capacity, we have growing opportunities to create more local control and treat electricity as an essential service.

ConvergenceRI: What have been the lessons learned from the Cape Light Compact?
RIDLEY: The Cape Light Compact grew out of a City of Chicago project I worked on in the late 1980s. The basic idea was to force competition into what was then a pure monopoly of Commonwealth Edison, the private utility that served the city.

The contract for power for municipal buildings would be put out to bid. With deregulation of retail electric pricing that states began adopting in the mid-1990s this became feasible.

Working with Barnstable County, which encompasses Cape Cod, we developed a model to bid out electric supply for all customers – residential, business, and municipal, and to help develop solar and energy efficiency.

Unlike “public power” system creation, we weren’t proposing to take over the poles and wires – so we avoided the traditional years-long court battles. We had to educate consumers and new wholesale power suppliers as well. The Compact has now been operating for more than 20 years. In addition to power supply, it took over the energy efficiency program from the utility [and won national awards for its savings], changed out all the streetlights to LEDs, helped fund solar on schools and public buildings, and spun off the Cape and Vineyard Electric Cooperative which has been instrumental in developing 28 megawatts of solar on town landfills and other sites.

I later worked in Ohio with eight counties and more than 100 cities and towns. And it’s been catching on in other states. One recent study showed 1,800 communities with a total population of 48 million people have adopted a “community choice aggregation” program like the Compact. This is the kind of essential service platform that can help lead us into the future. According to recent news, the City of New York is now looking at what role it might play in local solar development.

ConvergenceRI: If you were making recommendations to Rhode Island about how to restructure its electricity grid, what would they be?
RIDLEY: The next important stage, especially with federal infrastructure funds coming down, is to create nodes and accommodate micro-grids that will provide both efficiency and security at the local level. But it’s likely to be a tough political fight to get private utilities to accommodate that development in a meaningful way.

ConvergenceRI: How did your experiences working at Environmental Action influence your work today?
RIDLEY: After gaining experience at the state and local levels, I spent a decade in Washington. The first two years with Environmental Action where I focused on utility issues. I worked with a lot of fine people and gained a deep appreciation of the history of the energy industry and the path forward.

The information stream I was immersed in during that decade gave me background to write Power Struggle and start looking at new models for the industry.

ConvergenceRI: In recent years, it seems, behind-the-meter solar installations in New England have proven to be a major driver in reducing peak demand. Does that need to be better understood?
RIDLEY: Yes, as solar technology and storage and micro-grids continue to advance the potential is enormous.

ConvergenceRI: What haven’t I asked, should I have asked, that you would like to talk about?
RIDLEY: Most of the time, change comes slowly, especially in the energy industry, but there are windows of opportunity that arise when it’s important to act. The next few years could offer one of those windows.

To read the article, in full, go to: http://newsletter.convergenceri.com/stories/giving-consumers-ownership-of-their-energy-choices,6547

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Richard Asinof is the founder and editor of ConvergenceRI, an online subscription newsletter offering news and analysis at the convergence of health, science, technology and innovation in Rhode Island.