Australia: ACT electricity prices to drop after reaching 100% renewable target, RenewEconomy, June 2020 (article further down)
There is a “flexibility and nimbleness” to a small, city-owned utility. These characteristics will help the transition to clean energy — a fact made apparent by some of the cities that have already achieved their 100% renewable goals, like Burlington, Vt. and Georgetown, Texas. Both cities own their utility companies.
Shamroe says that Traverse City has taken some inspiration from Burlington, because it has achieved its goal in a similar climate zone. However, even with their similarities, varying political and environmental climates mean that every city has a unique path to 100 percent. Each community is different and has its own needs.
Our shareholders, if you will, are our residents… ultimately, we answer to them
– Amy Shamroe
Sharing the Benefits, While Keeping Costs Low
Shamroe is proud that Traverse City Light and Power offers one of the lowest electricity rates in the state of Michigan. Although the board of the utility is evolving, she and the other members maintain a focus on affordable rates. She does not want residents to have to choose between clean energy and low energy prices.
People are seeing that this is a goal, they’re on board for the goal. Because we are doing it in a way that’s not hitting them right in the wallet, we’re keeping them with us through the process and keeping them in mind the whole time.
– Amy Shamroe
How Much Progress has the City Made?
Traverse City’s original goal was to power city operations with 100% renewable energy by 2020. With the help of purchased renewable energy credits, the city is technically there. Werner thinks of the purchased credits as a bridge, because the city plans to generate more renewable energy itself.
Werner says that the city is still paying a premium for the one megawatt solar project. Depending how the market rate for energy changes, the megawatt of solar could save the city money in the future.
So yes, that 1 megawatt on the edge of town for traverse city proper is at a premium, but in the grand scheme of things, the multimillion dollar budget for light and power, it’s in the noise and it has no effect on rate payers.
– Tim Werner
The cost of renewables is not the problem. Rather, Traverse City is stuck in some long-term coal contracts that are keeping it from its goal. The city has considered breaking the contracts, but Shamroe fears it will be too costly for ratepayers. The longer of the two contracts expires in 2035, which is why the city set 2040 as the year to reach 100% clean electricity.
Even if we could break those contracts somehow… If they’re just going to sell that electricity from coal to somebody else at a cheap rate because we broke the contract so we can be renewable, does that really make the world a better place?
– Tim Werner
See Traverse City’s 1 MW solar panel on the cover of our community choice energy report:
Final Words of Wisdom
When Farrell asks the interviewees for their advice, Shamroe says to not get too bogged down in the “how.” If a city wants to run on clean energy, it is important to set the tone by setting a goal.
It’s not some pie in the sky dream. It’s going to be doable, and all of us together make it more probable that it will happen in a timely manner, because there’s demand now — and that’s capitalism.
– Amy Shamroe
Werner’s advice to other city leaders is to set goals that are aspirational, but not impossible.
Pick a realistic date, but there’s still stretch goals. Things you really are going to have to work for — cause you can get the community behind that. Then they feel like, hey, this is something we are going to work toward, but it’s not some huge burden.
– Tim Werner
ACT electricity prices to drop after reaching 100% renewable target, RenewEconomy, June 2020
ACT officially achieved its target of 100 percent renewables – sourced from a range of wind and solar farms in South Australia, NSW, Victoria and the ACT – in October last year.
ACT households are set to enjoy an average 2.56 per cent drop in electricity prices from 1 July, after the national capital succeeded in reaching its 100 percent renewable electricity target.
The new electricity price determination from the Independent Competition and Regulatory Commission (ICRC) for 2020-21 said that falling wholesale electricity costs driven by increased uptake of renewables, combined with the falling cost of the renewable energy certificates, contributed to the fall in electricity prices.
A 7.5 percent fall in wholesale electricity prices, a 25 percent fall in compliance costs for the federal Renewable Energy Target and a 16.4 fall in the compliance costs for the ACT’s own renewables and energy efficiency schemes were more than enough to account for a 13.8 per cent increase in network costs for the 2020-21 year.
The ACT already enjoyed some of the lowest electricity prices in Australia and has successfully maintained that advantage while also transitioning all of the ACT’s electricity supplies to renewable energy sources. The ACT officially achieved its target of 100 percent renewables – sourced from a range of wind and solar farms in South Australia, NSW, Victoria and the ACT – in October last year.
ACT minister for climate change and sustainability Shane Rattenbury says that the fall in ACT electricity prices showed that the transition to 100 percent renewables was the right thing to do, despite a range of scaremongering that suggested that it would drive up costs. “This is a welcome decision, and if ActewAGL passes through the full price decrease – which I hope they do – it would see a decrease of about $43 on the annual electricity bill of the average ACT household for 2020-21. For businesses the decrease will range from $66 – $265,” ACT minister for climate change Shane Rattenbury said.
“The decrease is especially timely, as businesses and households face extra pressures due to the COVID-19 crisis. It is important that essential services like energy remain affordable, and that people have equitable access.”
“The decision further demonstrates that good environmental policies, and renewable energy, go hand in hand with energy price relief for households and businesses.”
Bucking a trend seen across most Australian states, the ACT has retained both independent regulation of electricity prices, as well as seeing electricity supplies provided by a government owned utility, ActewAGL, which dominates the ACT market with an 80%+ market share.
Tasmania, which has also retained public ownership of its primary electricity retailer, with price regulation and very high renewables penetration, is the only other jurisdiction with cheaper electricity prices than those in the ACT.
The ICRC acknowledged that the increased deployment across the National Electricity Market was a main driver in the falls in wholesale electricity prices. Additional falls in the price of renewable energy certificates were also a contributing factor for the price decrease.
The ACT government will move to further improve transparency around electricity billing, to help consumers to compare available plans from their electricity retailer, as well as compelling electricity retailers to tell their customers whether they have a plan available that would further cut their costs.
“The ICRC notes that the increase in renewables generation is responsible for a significant portion of the decrease in electricity prices,” Rattenbury added.
“I also welcome the ICRC’s recommendations about improving information for electricity customers, and the Government will investigate implementing them.”