The state’s new community power law scares me.
It should excite me because it takes a very New Hampshire-y approach to the vital issue of redesigning our entire electric system for a climate-changing world.
The law, passed this summer, gives towns and cities the authority to do interesting things that up to now only utilities did, like developing smart meters or demand response or load shifting or customer aggregation or even homegrown electricity production.
Basically is subjects Reddy Kilowatt to local control, and we love local control. Power free or die!
“It allows local government to potentially innovate and find improved ways of providing for electricity supply,” said Clifton Below, assistant mayor of Lebanon and a former state senator and Public Utilities Commission member. “It’s accelerating grid modernization by making local communities more of a partner … in making the changes we need to make to transition to a system much more based on distributed energy sources.”
Awesome! But that’s why I find it scary – it’s so big.
I am on my town’s sustainability committee. As volunteers, we can barely handle things like changing our streetlights to LEDs. Once you start talking about managing an energy supply portfolio or bidding into wholesale electric markets (egad!), I want to run and hide.
Henry Herndon of Clean Energy NH, an advocacy group that is a focal point for information about the new law, is sympathetic.
“It can be difficult, especially for a small town that doesn’t have a robust expertise in the power sector, to know how to go about it,” he said.
Power sector expertise doesn’t get much more robust than Below’s, which is why Lebanon is furthest along.
“We’ve thought about it the longest, perhaps,” said Below, interviewed recently after getting off a conference with officials from a number of other towns, including Warner, who are interested in what the law allows.
The city hopes to start Lebanon Community Power next year, giving residents a chance to buy electricity through the city rather than a utility or one of the competitive energy suppliers. “We hope to launch with a price that was somewhat better than the default energy business price and a better source in terms of renewable energy,” said Below.
At some point, that could include electricity produced by the city’s solar panels or a proposed power plant burning methane released by the city landfill.
Just as important, Below said, the project gives the city the opportunity to consider the sort of market changes that utilities have been slow to adopt such as variable pricing, which would encourage people to shift usage to off-peak hours, a change that can have a surprisingly big effect on reducing pollution and costs.
“The idea is to de-carbonize the electric grid, but to do that in the contest of harnesses market forces at the retail level,” said Below.
This bottom-up approach built around price signals more than regulatory mandates, helps explain why the law (SB286) garnered bipartisan support even as other energy bills succumbed. “One of the appeals to the governor’s folks is this is trying to create a retail-based market mechanism can animate retail electricity markets,” said Below.
California has instituted similar programs with community choice power aggregation, and their success is encouraging.
“They have been able to take a similar legal framework and have grown very quickly over a fairly small number of years. They have a good track record of producing savings and accelerating renewables,” said Below.
Herndon of Clean Energy NH, said that he hopes that communities will band together to create the scale of customers and staff, not to mention the budget to hire contractors as needed, for a community power system.
And what about town officials or volunteers who don’t have a Cliff Below on staff, what should they do?
“Reach out to Clean Energy New Hampshire,” said Herndon. “We will be developing a network of for-profit and non-profit experts interested in supporting development of community power.”
To put it another way: “We’re playing matchmaker.”
Maybe it’s not as scary as I thought.
ADDENDUM: A reader sent a story about energy districts in Iowa.
In the graf:
“‘The idea is to de-carbonize the electric grid, but to do that in the contest of harnesses market forces at the retail level,’ said Below.”
“…the contest of harnesses…”
I think that what I actually said or tried to say was: “The idea is to de-carbonize the electric grid, but to do that in the context of harnessing market forces at the retail level.” Part of the purpose of NH’s original electric utility restructuring act was to “harness the power of competitive markets” to lower costs from what they would otherwise be and drive innovation and efficiency based on competitive choice. While there has been a lot of work to develop competitive markets for electricity generation in wholesale markets, there has been much less work for such at the retail level. Community Power aggregations can help develop competitive retail markets and drive cost-effective innovation in power supply.
New Hampshire has had a community power law on the books for perhaps 20 years, but it has never amounted to much due to various issues with the laws, and SB286 tries to correct these deficiencies. Perhaps the most important law correction included in SB286 that was not mentioned in the article is that SB286 changes the community power agreement from an opt-in arrangement to an opt-out arrangement. The original version of the community power laws required that their potential customers opt-in to the service, while leaving other providers such as Eversource as the default choice when someone signs up for electrical service. Most people don’t think about their choices when signing up for service, so they end up with the default provider thus limiting the numbers of people in the community power arrangement. This opt-in requirement kept community power providers from being able to generate the critical mass to make the operations viable.
Having the community power provider as the default choice and thus requiring people to only not choose them by proactively opting-out is expected to allow the community power providers to generate the needed critical customer mass, and make them financially viable.