Beyond Buying Renewables: How Cities Can Influence the Energy System

July 27, 2020  |  By Heather House and Lacey Shaver RMI

As US cities and counties transition to clean energy for their own operations and communities, many are finding that stakeholders and policies beyond their jurisdictions affect their ability to purchase clean energy. Policy and regulatory decisions made by states, utilities, public utilities commissions, and wholesale market governing bodies determine the clean energy procurement options available to cities and counties. This can create challenges for meeting locally-defined resolutions and commitments.

To overcome these challenges and drive faster progress on renewables and carbon-free goals, local governments are starting to engage with old stakeholders in new ways to change the rules of the game. By removing regulatory and legislative obstacles, local governments are creating new pathways to access affordable, clean energy.

To help cities and counties better understand potential high-impact engagement opportunities, the American Cities Climate Challenge Renewables Accelerator released a new interactive tool, the Local Government Renewables Action Tracker. The tool highlights efforts by local governments to work directly with the institutions and decision-makers who influence their ability to access clean energy and control the broader electricity system.

Here are four ways local governments are engaging with stakeholders to decarbonize their electricity supply:

1) Partnering with Investor-Owned Utilities

Cities and counties often are required by state law to buy electricity from a regulated investor-owned utility (IOU) and lack the ability to choose their electricity supplier or generation source. While some IOUs offer renewable energy programs, these options don’t always meet city needs. Worse still, some cities have no options for purchasing renewable electricity.

To overcome these circumstances, some local governments are partnering with their utilities. For example, the City of Denver and Xcel Energy developed a partnership agreement in 2018 to define and collaborate on shared climate and energy goals.

These types of partnership agreements can lead to the creation of new renewables programs or custom utility solutions that enable local governments to purchase renewables on a large scale. In North Carolina, Duke Energy and the City of Charlotte signed an agreement that laid out the ways they could partner on clean energy work. One year later, Charlotte became the first city to sign a large-scale deal through Duke Energy’s new Green Source Advantage green tariff program.

2) Engaging in State-Level Regulatory Proceedings

Many key decisions around the implementation of state energy policies, including decisions that govern IOUs, are made by state public utility commissions (PUCs). PUCs allow stakeholders to voice their needs as electricity customers, which can be a good opportunity for local governments to advocate for more renewables. However, engaging in commission proceedings can be a time-consuming and cumbersome process for local governments with limited resources to navigate.

Increasingly, cities and counties are asking for more renewables on the grid by commenting and providing testimony to their state PUC. This includes commenting on their utility’s integrated resource plans (IRPs), which are long-range plans that communicate how an electric utility intends to develop new generation assets over the next 10–20 years. In many states, utility IRPs are required by law and providing input on them can be an impactful way for local governments to influence their regional grid mix and increase renewable energy generation.

During the Indianapolis Power & Light Company (IPL) IRP process, the City of Indianapolis submitted a public letter to encourage IPL to explore a more aggressive retirement scenario for the Petersburg Coal Generating Station and increase renewable generation. Indianapolis cited an October 2019 report by Rocky Mountain Institute that found that clean energy portfolios declined in cost by 80 percent since 2010, are now lower-cost than new gas plants, and are projected to undercut the operating costs of existing gas plants within 10–20 years.

In comments to the Georgia Public Service Commission (PSC), the City of Atlanta asked Georgia Power to expand residential energy efficiency and renewable energy programs, provide greater access to utility data to improve energy efficiency efforts, increase municipal access to renewable energy, and build a new local microgrid to improve community resilience. In response to customer comments like these, the PSC required Georgia Power to more than double solar energy procurement over the next five years from one gigawatt (GW) to 2.2 GW.

Local governments are also increasingly advocating for alternative forms of utility regulation and business models. This includes performance-based regulation (PBR), a type of utility reform that incentivizes electric utilities to demonstrate performance on metrics such as greenhouse gas reduction, efficiency, and customer service.

This approach contrasts with traditional “cost-of-service” business models that incent utilities to build more physical assets, which generally result in new buildouts of gas power plants and pipelines, locking in emissions for years to come. The City and County of Honolulu and the County of Hawaii have been actively engaged in advancing PBR through workshops, working group meetings, filing written comments to Hawaii’s PUC and creating thoughtful proposals recommending new PBR mechanisms for their utility to adopt.

3) Influencing Statewide Energy Policy

When stakeholders come together to voice their needs to legislators, it has the potential to create large-scale change. Local governments are starting to get involved at the state level by calling for changes to state climate and clean energy legislation. There are a few high-impact policy pathways that cities can pursue:

  • Removing Barriers to Solar
    Local governments are asking state policymakers to remove barriers that prevent renewable energy procurement. Stakeholder input recently helped pass the Virginia Clean Economy Act of 2020, which created the state’s first clean energy standard and lifted constraints on existing state laws that limited access to third party financing options that can bring down the cost of renewables. Similarly, the City of Fayetteville, Arkansas, alongside other large customers and local governments, successfully called for increased access to third-party financing for renewables, which would ultimately make clean energy procurement more affordable for consumers.In Utah, local governments came together to ask the state to enable high-impact pathways for procuring renewables, leading to the ratification of the Community Renewable Energy Act of 2019. These local governments are now collaborating with the state’s electric utility, Rocky Mountain Power, to develop a utility program through which they can purchase 100 percent renewable energy.
  • Phasing Out Fossil Fuels
    Cities and counties are advocating to retire uneconomic fossil fuel power plants by enabling or expanding securitization legislation. Securitization can be used to allow utilities to issue bonds based on the guaranteed returns they are making from the uneconomic plants and use the proceeds to build or buy cheaper renewable energy. The shift to lower-cost generation allows utilities to both make more money and lower rates for their customers while phasing out fossil fuel power plants.Forming a coalition with other local governments can help amplify a city’s message to its state legislators. For example, Colorado Communities for Climate Action (CC4CA), a coalition that consists of 33 Colorado counties and municipalities, regularly advocates for state climate policy. Members of the coalition meet with legislators, provide testimony at state legislative sessions, write op-eds, and coordinate strategy for local governments. CC4CA’s collective voice was a powerful lever that helped  pass one of the strongest state climate bills to date, which includes both short-term and long-term clean energy targets for Colorado.
  • Enabling or Expanding Community Choice Aggregation
    Community choice aggregation (CCA) allows local governments to have full control over their electricity supply, providing the ability to procure renewable energy for their municipal operations, residents, and in some cases, small businesses. To make progress toward community-wide renewable energy targets, cities are starting to push for legislation to enable CCA or to expand renewable procurement through an existing CCA. CCA can be a key mechanism for achieving community-wide clean energy goals if a city’s electric utility does not offer the procurement pathways needed to achieve its renewable energy target. Cincinnati has signed the largest municipal renewable energy deal in US history, in part because of the control the city had through its CCA program.

Forming a coalition with other local governments can help amplify a city’s message to its state legislators. For example, Colorado Communities for Climate Action (CC4CA), a coalition that consists of 33 Colorado counties and municipalities, regularly advocates for state climate policy. Members of the coalition meet with legislators, provide testimony at state legislative sessions, write op-eds, and coordinate strategy for local governments. CC4CA’s collective voice was a powerful lever that helped  pass one of the strongest state climate bills to date, which includes both short-term and long-term clean energy targets for Colorado.

4) Getting Involved in Wholesale Energy Markets

Rules made in wholesale markets can impact local government clean energy goals and present obstacles for clean energy procurement. Participation in market-level decisions and stakeholder processes has traditionally been dominated by utilities and generators, but that is starting to change.

One recent decision by the Federal Energy Regulatory Commission could hamper the development of renewables in states that participate in the PJM wholesale electricity market. The decision directs PJM to implement a minimum offer price rule for renewable generation resources supported by state policies like renewable portfolio standards and zero emissions credits. This rule would effectively raise the minimum price of renewables and, ultimately, ratepayer costs across the board. Some states, including New Jersey and Virginia, are considering leaving the PJM capacity market to preserve their ability to offer incentives to develop renewable energy.

The PJM Cities and Communities Coalition is the first ongoing collaborative effort for cities to address barriers in the PJM wholesale energy market. As part of the Coalition, cities like Washington, D.C., Philadelphia, and Chicago are joining together to provide education to members on market issues, considering becoming formal voting members and identifying priority issues where cities can engage. One of the Coalition’s early efforts was a public letter to the PJM Board of Managers during its search for a new CEO, urging the search committee to hire a candidate who could move the PJM market toward a clean energy future.

Identifying and Replicating Local Clean Energy Successes

Engaging with utilities, commissions, state policymakers and wholesale market governing bodies is new and unfamiliar territory for many local governments. Cities and counties have struggled to understand their energy policy context and opportunities; how and when to engage with utilities, regulators and legislative staff; and whether to involve other stakeholders. And once they decide to engage, local governments often struggle to dedicate the resources and funding necessary to participate in ongoing efforts.

Regardless of the approach, collaborative efforts are key to overcoming these challenges and enabling more effective participation. This allows local governments to leverage limited local resources, reduce political risks and develop a strong collective voice. This collective voice, in particular, can often be more powerful than one local government acting alone.

The Local Government Renewables Action Tracker is an important new resource cities and counties can use to see how other local governments are engaging with stakeholders and evaluate the options available for advancing their own clean energy projects and goals.

As cities and counties continue to develop their voices as large energy consumers, we should expect to see them get more involved in state regulatory proceedings and legislative hearings, innovative city-utility partnerships, and market decision-making processes. Local government engagement like this has significant potential to accelerate decarbonization in the United States by dramatically expanding local access to renewables for city operations and communities alike.

About the American Cities Climate Challenge Renewables Accelerator

Leaders in US clean energy development are beginning to realize how important it is to help cities achieve their renewable energy goals. Last year, Bloomberg Philanthropies announced the American Cities Climate Challenge, a two-year program that provides cities with powerful new resources to help them meet their near-term carbon reduction goals. Together with Bloomberg Philanthropies and the Urban Sustainability Directors Network, World Resources Institute (WRI) and Rocky Mountain Institute (RMI) formed the Renewables Accelerator to provide technical support to US cities as they explore new and innovative strategies for procuring renewable energy to meet these goals. Learn more about the Renewables Accelerator here.


megadrought parching 77 percent of the Western US, explained

Rising temperatures and lack of rain threaten to decrease water supplies and bring more wildfires this summer and in the years to come.By Lili  Mar 13, 2021, 9:30am EST

Share this story

Fleur Dawes, an activist from In Defense of Animals, walks on a dried pond in the Tule Elk Reserve in Point Reyes National Seashore, California in August 2020. Because of heat, drought, and fires, the local tule elk are running out of water.

The Western US is in the midst of yet another dangerous dry spell. The drought has been building over the past year, and since November, a greater stretch of the West has been in the most severe category of drought than at any time in the 20 years that the National Drought Mitigation Center has been keeping records.

Western states are already facing water shortages, and with the National Weather Service projectingthat the dry stretch will continue, the problems that accompany droughts are likely to pile up heading into this summer.

Ryan Jensen saw the impacts of California’s last major drought firsthand while working for the Community Water Center in the San Joaquin Valley. When residential wells ran dry, students had to shower in their school locker rooms. To keep toilets running, some rural households relied on hoses slung over fences from their neighbors.

With groundwater depleted by that drought, which only ended in 2017, and ongoing overuse of water on farms,families have had to dig deeper wells, which can be prohibitively expensive.

“For some folks, the last drought never really ended. There are still homes in the San Joaquin Valley that have been on a water tank since the last drought,” said Jensen, who works in the center’s Visalia office.

That last drought also led to other fallouts: billions of dollars in economic losses as farmers were forced to let fields lie fallow and a 50 percent drop in electricity production from dams. It also contributed tothe death of over 100 million trees, which fuels bigger wildfires, like the ones that ripped through the West last summer. If the current drought continues, similarly stark consequences lie ahead.

Unfortunately, these droughts in rapid succession aren’t an aberration but rather a sign of what’s to come. Climate change is driving more severe droughts and spurring longer, more troubling “megadroughts” across the Western states. Here’s what you need to know about what the future holds for these states as temperatures rise.

Sign up for The Weeds newsletter

Vox’s German Lopez is here to guide you through the Biden administration’s unprecedented burst of policymaking. Sign up to receive our newsletter each Friday.

The latest episode in a megadrought

This time last year, the West was relatively drought-free after a wet winter in 2019. But by now,the region has swung from 27 percent in drought to 77 percent, according to the latest data from the US Drought Monitor released March 11.

What happened?

Over the past year, the drought has been building due to a lack of rain, a weak summer monsoon in the Southwest, and intense summer heat waves. “If I had to pinpoint one thing that really drove the drought to where we are right now, it was the heat of last summer,” said Brian Fuchs, a climatologist at the University of Nebraska’s National Drought Mitigation Center.

High summer temperatures sucked the moisture out of the soil and evaporated water resources.

The Four Corners, where Utah, Arizona, New Mexico, and Colorado meet, has been the epicenter of this drought, Fuchs said. The dark splotch on the map below shows that those states as well as Nevada have been experiencing the most intense drought.

Now the West is in the winter wet season, but due, in part, to the La Niña weather pattern, too little rain and snow is falling to make up for the preceding dry months.

Some rain and snow may still fall, but the National Weather Service’s seasonal forecast projects that drought conditions will persist across the Western US through May, the end of the current forecast period. “We do have some time to maybe put a dent in some of these deficits that we’ve seen through the winter,” said Fuchs. “Now the idea that we are going to catch up completely — that’s going to be tough.”

The trajectory of this drought episode remains unclear, but scientists say that it is actually part of a bigger megadrought — a decades-long dry spell, punctuated by severe droughts. This megadrought began around 2000, and as the chart below shows, the majority of land in the West has been in some level of drought ever since.

Over the past 20 years, the Western US has experienced frequent severe droughts, which together form a megadrought. (The Y-axis shows the percent of Western land that is in some kind of drought. The darker colors represent more severe categories of drought.)

To understand why the West is in a megadrought, the role of climate change, and what it means for the region’s future, we first need to look at some historical clues.

What’s behind longer and more intense droughts? Climate change.

Based on data from tree rings and other ecological records of weather and climate patterns of the last few thousand years, we know that the West is no stranger to drought. In an April 2020 tree ringstudy published in Science, researchers found that several megadroughts occurred between 850 and 1600 —before humans started pumping massive amounts of greenhouse gases into the atmosphere. These droughts were likely caused by cool temperatures in the Pacific Ocean that prevented rainfall from reaching the Southwest.

While natural variability has been a factor in recent droughts, the current megadrought is also being driven by climate change, according to the study. Higher temperatures, caused by greenhouse gases, have increased evaporation and decreased precipitation in the spring across the region. The researchers were able to identify that climate change accounted for 46 percent of the drought’s severity.

Without climate change, there still would have been a drought, but “anthropogenic warming was critical for placing 2000–2018 on a trajectory consistent with the most severe past megadroughts,” they wrote. The current megadrought, which they traced from 2000 through 2018, was the second driest 19-year episode in the 1,200-year record.

This finding is not just important for how we understand the current crisis, but also for the coming decades in the Western US as temperatures continue to climb.

The latest National Climate Assessment, authored by 13 US federal agencies in 2018, laid out a grim future for the Southwestern states: Rising temperatures will increase the likelihood of megadroughts in the region and make droughts more frequent and severe, according to the scientific literature cited.

While annual precipitation in the Southwest may not necessarily decrease, the hotter annual temperatures will burn off more moisture, contributing to droughts, the researchers explained in the Science tree ring study.

Western states need to make sure vulnerable communities aren’t left behind by droughts

Communities across the West have already felt the impacts of the latest drought, starting with last year’s devastating wildfires. The growing drought over the summer dried out vegetation, priming the landscape to burn.

Now, as water reserves plummet,New Mexico state officials are encouraging farmers to not plant crops, the Wall Street Journal reported. Reservoirs are also troublingly low in California, and snowpack — which serves as a critical water bank for the state — is at 61 percentof the average for early March.

Due to the role of climate change, preventing the worst outcomes from drought going forward starts with reducing greenhouse gas emissions as fast as possible.

And states will also have to keep adapting.

After the last drought, California put in place its first groundwater management law as well as conservation directives that decreased water use by 25 percent between 2014 and 2017. But for the 2 million Californians who rely on wells, many of whom live in marginalized communities in rural areas, the situation is still precarious. During the last drought, farmers increasingly turned to pumping groundwater, which caused thousands of neighboring drinking water wells to fail by the end of the drought.

According to Erick Orellana, a policy advocate at the Community Water Center, this could happen again because the existing groundwater laws don’t prioritize these communities. “The fact is that, currently, California does not have preparedness plans in place for the most vulnerable communities,” he said. Current regional plans under the state’s groundwater management law would allow thousands of wells to go dry, the Guardian reported.

Last month, California Senate Majority Leader Bob Hertzberg introduced Senate Bill 552, which would require smaller water systems in California to also create drought preparedness plans.

These measures are a step forward, but some government officials have also acknowledged a growing incompatibility between current patterns of water use and dwindling resources. Three-quarters of annual water consumption in the Southwest goes to irrigating crops, and populations are growing in cities that are naturally dry. In St. George, a city in southern Utah’s Washington County, a construction boom is straining water demand amid the drought.

“Our Plan B is you’ll have to at some point say, ‘Stop. You can’t build any more houses here,’” Zach Renstrom, general manager of the Washington County Water Conservancy District, told the Wall Street Journal.

In the San Joaquin Valley, as aquifers drop, researchers say current levels of agricultural water use are untenable. A few months ago, the Community Water Center in San Joaquin started fielding calls for help from people losing water access once again. “The calls we were getting last summer really just gave me a major sense of deja vu to 2014,” Jensen said.

“I think that the bottom line is that the way things have been done in the entire Western United States, but specifically in the San Joaquin Valley of California, are just clearly unsustainable.”