Final CCA 3.0 Equity Lens Report FINAL DRAFT copy SUBMITTEDCCA 3.0 Equity Lens
By Local Power LLC
Author: Paul Fenn
Research: Charles Schultz
Editor: Julia Peters
Northampton, Amherst, Pelham, Pioneer Valley Planning Commission, Boston,
Cambridge and Somerville, Massachusetts; Saratoga Springs, New York; Jersey
City, New Jersey; Cincinnati, Ohio; Hanover, New Hampshire
and Urban Sustainability Directors Network
November 19, 2019
Edited Draft December 5, 2019
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Table of Contents
1. Introduction: Core 3.0 Equity Strategy…………………………………………...2
2. Technologies of Social Equity………………………………………………………6
3. Energy Efficiency Financing for Energy Equity…………………………………..7
4. Northampton/Amherst/Pelham Energy Equity CCA 3.0 Scenario…………..10
5. How to Access Social Equity.…………………………………………….………..11
6. Financial Stability and Sources of Revenue for CCA 3.0 Energy Equity…...13
7. Environmental Justice and the Distribution of Benefits through Equity in
Ownership of Renewable Energy………………………………………………….17
8. Environmental Justice: Distribution of Benefits through Rate Structures...21
9. Usage Data and Metering…………………………………………………………..24
10. Security and Revenue……………………………………………………………….24
11. Customer Experience of a Universal Shares Offering………………………...25
12. Distributed Energy Resources (DER) Development Planning……………….26
13. Inclusive Representation…………………………………………………………...26
Appendix A: Glossary of Terms……………………………………………………….28
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1. Introduction: Core 3.0 Equity Strategy
Many municipalities in the U.S. and around the world have declared climate
emergencies in recent years, calling for accelerated, rapid, scaled greenhouse gas
reductions that can only be achieved through a profound transformation of energy as
described by the United Nations in March, 2019.1
A profound transformation of energy requires a shift from policies designed for
incremental progress to policies designed for rapid physical change. This means not
merely a mitigation of fossil fuel use, but a physical replacement and elimination of
fossil resources.
This shift is not occurring under prevailing regulatory regimes for renewable energy,
namely; (1) Renewable Energy Credits (RECs), which create market incentives to
renewables developers, but continue in the consumption of conventional fossil-
centered supply; (2) development of centralized renewables, which while superior to
RECs in causing physical and regional carbon reductions are inherently limited in
reducing carbon emissions due to the energy grid’s need to balance intermittent
resources with fossil fuel-based balancing capacity; and, (3) Net Metering (NEM) and
Feed-in-Tariff (FIT) programs that offer greater carbon benefits to centralized
renewables, but are inherently limited, perpetuating the solar owner’s reliance upon
imported fossil power from the grid, functionally separating renewables from the
buildings on which they are sited, and making the customer’ financially dependent on
exporting onsite renewable power into a highly voltage-constrained, low voltage
distribution grid.
Recognizing that these widely used incentive mechanisms for renewables, having
perhaps been useful for their early market development, are utterly inadequate for the
scale and schedule of energy transformation required for climate mobilization, eleven
U.S. cities have requested nationwide guidance on how to directly build at scale, rather
than merely “incentivize,” local renewables and energy efficiency, and how to
disengage from, not merely mitigate, fossil fuel power plants. These eleven cities from
five states2 with Community Choice Aggregation (CCA) laws in place, are interested in
using their community-wide energy purchasing programs not merely to purchase
Renewable Energy Credits, but to plan and facilitate voluntary customer investment in
local renewables and energy efficiency technologies. Accordingly, this document
approaches climate mobilization through an “equity lens” in which private sector
engagement in local green energy investment presents a clear path to scaled,
accelerated regional decarbonization. Specifically this document identifies distributional
opportunities, access opportunities, social equity opportunities and energy democracy
opportunities that may be realized by a new iteration of Community Choice Aggregation
known as CCA 3.0, articulated in the preceding report, “CCA 3.0 Pathways.”
1 https://www.un.org/press/en/2019/ga12131.doc.htm
2 Massachusetts - Northampton, Amherst, Pelham, Pioneer Valley Planning Commission,
Boston, Cambridge, Somerville; New York - Saratoga Springs; New Jersey – Jersey City; Ohio 2 Massachusetts - Northampton, Amherst, Pelham, Pioneer Valley Planning Commission,
Boston, Cambridge, Somerville; New York - Saratoga Springs; New Jersey – Jersey City; Ohio
– Cincinnati; New Hampshire – Hanover.
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These municipalities, many of them with CCA programs already underway,
commissioned this document to outline a new CCA model that will engage the whole
community: to create benefits of environmental justice, and to ensure an equitable
distribution of program benefits, including “equity in ownership of renewable energy.”
Articulating the rate and charge structures that will be employed to make this happen, a
new CCA business model and governance model, they stated, should be designed to
deliver “inclusive representation” in the form of both citizen engagement in CCA
decision-making and customer engagement in the renewables and energy efficiency
technologies that are built.
In fulfillment of these goals, the “CCA 3.0 Pathways” report presents three major new
elements – (1) municipal partnership, (2) customer shares, and (3) customer
cooperatives as defining a “climate equity” platform, incorporating several forms of
energy equity, defined by the project:
• Procedural equity or inclusion, meaning “inclusive, accessible authentic
engagement and representation in the process to develop or implement
programs or policies,”
• Distributional equity or access, in which “programs and policies result in fair
distributions of benefits and burdens across all segments of a community,
prioritizing those with highest need,”
• Structural equity, under which “decision-makers institutionalize accountability,
(where) decisions are made with a recognition of the historical, cultural, and
institutional dynamics and structures that have routinely advantaged privileged
groups in society, and resulted in chronic, cumulative disadvantage for
subordinated groups,” and
• Transgenerational equity, for which: “decisions consider generational impacts
and do not result in unfair burdens on future generations.”
Incorporating energy equity within a climate mobilization strategy, this next chapter is
intended to explain and contextualize the equity-centered program design articulated in
the “CCA 3.0 Pathways” report. Moreover, this “Equity Lens” report makes the case
that energy equity is itself a necessary strategy for achieving the “transformational”
magnitude of physical greenhouse gas reductions called for by the United Nations.
The CCA 3.0 program design incorporates each of these forms of equity into an
operational CCA agency business model based on building internal capacity to create
local energy equity, participatory governance and accountability to ensure their
realization, and program structure to effectively engage democratic and economic
participation by all members of the local community:
• Procedural equity highlights the dual nature of engagement of community
members as citizens and consumers, including (1) a participatory democratic
process of defining policies and programs, and also (2) equitable customer
participation in economic benefits.
• Distributional equity requires an active engagement of low-income, fixed
income, and small- to medium-sized businesses eligible for equity irrespective
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of their credit score, to participate in program or policy benefits, such as
ownership.
• Structural equity requires both a governance model that encourages
accountability by elected officials and staff, and an active solicitation of under-
represented, particularly low-income residents to participate in both CCA
decision-making and investment.
• Transgenerational equity recommends an energy strategy that reduces carbon
emissions today, rather than waiting until a future date, to avert compounding
future costs. Inherent in CCA 3.0 program design and policy is that it is
implementable now, and should not delay important decisions that compound
the cumulative burden of climate change cost on future generations.
Specifically, CCAs 3.0 should commit investments in transforming energy to
scale up impact on climate disruption and equity, not merely mitigate a static
utility business model.
The CCA 3.0 program design is built upon the fact that equitable energy ownership, as
opposed to equitable consumption of energy, is a precondition for the transformation of
the vast majority of energy use, from automobile purchase choices for transportation
fuels, to electricity generation technology choices for power fuels, to building heating,
ventilation and cooling (HVAC) and hot water heater choices for heating fuels. The
difference between CCA 1.0 and 2.0, further articulated in the ‘CCA 3.0 Pathways”
report, is like the difference between an energy efficient gasoline car and a renewably-
powered electric vehicle. The difference between 2.0 and 3.0 is more akin to that of
giving the hungry person a fish versus a fishing pole.
CCA 3.0 resolves to conclusively replace conventional fossil fuel-based grid power
resources through inter-municipal planning, finance and development, rather than
merely “mitigating” continuing fossil fuel demand by making ongoing market incentive
payments. Specifically, Distributed Energy Resources (DERs), encompassing all behind-
meter, load reducing renewable energy, energy storage, energy management, fuel
switching, conservation, and energy efficiency measures, define the technological suite
of this strategy.
The potential for the 1500 existing U.S. CCA 1.0 programs to CCA 3.0, which is the
premise of this document, represents a new strategy in both choice of renewable
technology (DER) and equity (customer ownership). The habitat of energy
transformation is in homes and businesses. Unlike the New Deal’s public sector
orientation, a “Green New Deal” must transform the private sector, which consumes the
vast majority of energy. Equity defines a revenue strategy based on demand-side load
reduction as opposed to supply-side energy trading. Combining energy equity and
climate action into one strategy, “climate equity” is not merely a concession that
municipalities should offer economic benefits to low- to middle-income residents and
small businesses in the process of climate mobilization, but recognition that their
participation is a structural precondition for successful climate impactfulness of those
very mobilizations. In this way, voluntary investment throughout the private sector is not
an option, but a requirement for rapid decarbonization.
Finally, CCA 3.0 facilitates voluntary customer investment in small, modular DERs on
homes and businesses that reduce demand for grid and pipeline resources, rather than
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centralized renewable generation that adds to such demand. The technology suite of
CCA 3.0 reflects plummeting cost of onsite solar and other renewable energy (RE) plus
storage, including batteries, renewable HVAC/hot water and electric vehicles, to
exponentially grow the horizon of transformation achievable under existing regulatory
and system constraints. Whereas Net Energy Metering (NEM) and Feed in Tariff (FIT)
systems are constrained by utilities and regulators, and cause voltage regulation grid
impacts that severely limit the potential of DER penetration in distribution grids, the 3.0
approach articulated in this report uses integration and fuel switching to avoid the
financial necessity of exporting power from DER sites altogether. In so doing, CCA 3.0
enlarges the level of potential penetration from less than 10% today to more than half,
and potentially as much as 75% of the annual load in any given area of the distribution
grid.3
This approach dramatically ramps up the level, schedule and firmness of greenhouse
gas reductions that are economically achievable in CCA 3.0, above and beyond levels
achievable by conventional state- and investor-owned utility programs. Presenting a
new horizon of economically implementable sustainable energy development, it is made
possible by focusing on:
• Partnerships with CCA member municipalities to provide financial and account
support for their residents and businesses, and developing shared renewables
facilities on municipal properties,
• Engagement with, development and operation of, onsite microgrid-enabled
renewables and renewables plus storage on homes, businesses and local public
agency properties based on site energy requirements,
• Providing retail products based on customer shares and customer cooperatives
to engage the majority of customers who do not own economical DER host
sites.
This programmatic leap, comparable to this last decade’s leap from purchasing energy
supply products under CCA 1.0, to developing centralized generation under 2.0, may
be described as a shift to facilitating customer investment and ownership benefits of
avoided grid power and fuel consumption. Whereas export-based customer ownership
models, Net Energy Metering and Feed in Tariff programs have effectively excluded the
vast majority of residents and businesses who are not owners of new, unencumbered
south-facing rooftops, CCA 3.0 exponentially increases the potential participation of
low-, medium, fixed income residents and small- to medium-sized businesses in such
investment and ownership benefits.
Ownership creates a new paradigm of value for customers that is broader than, but also
encompasses the cost per kilowatt-hour or “rate.” Energy efficiency, long-competitive
with the cheapest fossil power (whereas RECs add to the cost of such power), as well
as onsite “solar-plus-storage,” is cost effective against the cost of renewable system
power in dense energy use environments. HVAC/hot water fuel switching creates
savings from avoiding more expensive natural gas and fuel oil, and Electric Vehicles
create savings from avoiding more expensive gasoline. Thus, the CCA 3.0 approach will
3 For example, see Local Power Inc., “CleanPowerSF In-City Buildout Program Design and
Business Case” (2013) http://localpower.com/CleanPowerSF.html
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provide lower ongoing costs for customers while creating greater equity benefits,
particularly ownership (future bill offset) benefits, for any customer that voluntarily signs
up for them. Finally, such investment confers secondary economic benefits on all
members of the community: DERs targeted geographically and temporally to reform a
CCA’s aggregate load duration curve create secondary savings for all CCA customers,
not just those who make voluntary investments, in the form of lower CCA capacity
requirements, charges and “tags” on monthly bills.
In addition to the development of DERs on municipal properties as shared renewables
sites, municipalities will play an important role in their financing relationship to
customers and building owners under CCA 3.0, as well as in data sharing,
planning/permitting DERs, and the use of public rights of way for DER components like
EV chargers and microgrids. Employing existing municipal service resources, municipal
activity costs will be funded from an account management fee on customer DER loan
agreements, and costs avoided by municipal DER and revenue generated by sales from
municipally-owned renewable generation facilities.
As the operational business model changed from 1.0 to 2.0, it does again under a CCA
3.0 program, which must build capacity to undertake a new set of activities centered
around local redevelopment, municipal cooperation, and customer engagement. CCA
agency staff will provide energy planning and procurement functions, serving as an
“umbrella” energy procurement and services administrator, in a mission-focused micro-
agency. This micro-agency will directly negotiate with suppliers or generators, to plan,
develop and administer the local DERs, with CCA member municipalities invited to
participate as their partners, and with customers as their intended beneficiaries. CCA
agency costs will be recovered from adders and rates in program revenues, state
funding, and grants.
The defining elements of a climate-impactful CCA 3.0 equity strategy are:
• Encompass not only conventional plug loads but also HVAC/hot water and
Electric Vehicles (EVs)
• Engage member municipalities in development and customer finance
• Engage customer investment through shares and cooperatives
• Shift renewables paradigm from RECs, NEMs and FIT transactions to non-
exporting DERs
• Build CCA staff capacity around DER planning, products and development,
customer services and enrollment, and member municipality coordination
• Shift to Direct Retail or Direct Wholesale business model and confine
outsourcing to local DER installation and new program/product development
• Establish a Job Order system and coordinate with local job training programs
(e.g. unions, universities) to support local contractor participation and local job
placement
2. Technologies of Social Equity
Equity-conferring technologies are located in the buildings that use their physical
energy and in the blocks or neighborhoods of the consumers who invest in them. CCA
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3.0 customers will receive bill credits reflecting cumulative ownership in the
technologies based on monthly utility bill payments. These technologies include HVAC
and hot water appliances and electric vehicles, which serve as recipients of real-time
excess capacity, or “storage.” Storage and onsite renewable generation are integrated
through microgrids and control systems, and offered as integrated assets for customer
share ownership by participating CCA customers.
A robust program will offer several forms of equity options to guarantee inclusiveness,
expand access, and maximize climate impact. Some products will be physically shared,
others virtually through shares and cooperative agreements, while others are owned
individually as consumer appliances, control panels, storage management systems, like
Internet Protocol (IP) thermostats and EV chargers, or other energy retrofits in homes
and businesses.
The primary technologies to serve a CCA 3.0 are:
a. In-building, on-block, in neighborhood renewable generators within CCA
jurisdictional boundaries
b. Demand management technologies in homes and businesses (and public
agencies)
i. Electrical energy efficiency
Ii. IP thermostats and Heating, Ventilation and Air Conditioning (HVAC)
efficiency, hot water efficiency and conservation
ii. Hot water appliances (shared or individual)
c. Solar-integrated electric vehicle sharing, collectives and ownership
d. Renewable onsite HVAC and hot water (fuel switching)
e. Resilience-enabled microgrids (shared, municipal or nonprofit)
f. Software as a Service web portal and/or transactive energy platform (CCA-
licensed or contracted- see Glossary)
h. Storage-dispatchable load control systems (commercially available under
interoperable equipment standards)
3. Energy Efficiency Financing for Energy Equity
Apart from the opportunity for CCAs in Massachusetts and California to administer
energy efficiency funds locally, energy efficiency finance is a critical component of any
DER development pathway, because Demand Side Management (DSM) measures are
the most cost effective resources with the shortest customer return on investment.
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Through a ‘shared savings’ arrangement, a portion of the associated bill savings should
be diverted to cover municipal customer loan repayments while also paying the cost of
CCA program administration/development/operation, municipal finance contract
administration and planning costs. This is similar to the business model of a demand-
side management contractor or Energy Services Company (ESCO). Depending on the
customer type, efficiency savings typically provide ample room for a ‘win-win-win’ in
which the customer, the program, and all ratepayers benefit economically from energy
efficiency measures. 4
The financing approach to energy efficiency overcomes numerous barriers that exist
under the current paradigm of providing rebates and asking customers to pay for
upfront capital costs. Among them are:
a. Bill Neutrality
The loan repayment may be structured to match or be lower than the monthly utility bill
savings, resulting in a positive cash-flow for the customer immediately.
b. Landlord-Tenant Split Incentives
These occur when property owners must pay the costs for capital improvements, and
tenants pay for the energy bills. Many commercial leases stipulate this arrangement,
and rent control regulations limit the costs that a property owner may pass through to
residential tenants. This precludes deep investment into energy efficiency, as the
landlord must pay the cost but the tenant receives the financial benefit.
c. Initial Cost
The capital cost of efficiency is a barrier to program participation for many customers.
d. Longer Paybacks
Financing can match the payback or even lifetime of the measures installed, leading to
deeper retrofits.
e. Avoidance of Debt
As an off-balance sheet mechanism, program financing will obviate the need to pay for
efficiency measures out of capital budgets (which are typically harder to access). This is
relevant to commercial and institutional customers.
f. Opportunity Cost of Capital
4 Laws regarding use of municipal water/sewer/garbage/tax billing for energy efficiency finance
depend on statutes, municipal ordinances, and agency charters.
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In many projections for energy efficiency in terms of Return on Investment (ROI), a
proposed retrofit may make financial sense, but the customer may well make
investment decisions based on broader criteria. For example, a business may wish to
spend its limited capital on its core competitive activities rather than building and
appliance upgrades.
g. Transactional Costs
While energy efficiency financing mechanisms do exist for certain customer types,
navigating available options and negotiating with lenders directly adds a transactional
cost to each project, and is also a hassle for the customer. Both of these drive down
participation, and are avoided by having the program itself structure and execute
financing agreements.
h. ‘Shared Savings’ Agreements
CCA 3.0 financing of energy efficiency measures in homes and businesses would
include a ‘shared savings’ agreement: in return for financing and implementing the
measures, the CCA, municipality, or JPE would receive a portion of the value of the
efficiency savings that result.
i. Repayment Mechanisms for Demand Side Management
On-bill financing (OBF) is the preferred repayment mechanism to service the debt on
deployed demand-side assets, because it offers the ability to tie repayment to the
meter rather than the CCA customer; this allows deeper retrofits with longer repayment
timelines. While many distribution utility billing systems are technically capable of
processing on-bill financing charges, they are typically unavailable, such that it is
necessary to explore alternative repayment mechanisms in addition to on-bill financing.
These alternatives include on-bill financing on municipal water/sewer/tax bills through
engagement of building owners, or else contracting with software-as-a-service
companies on cloud-based platforms to provide DER back office services, including
reporting, customer care, online billing and payment, and utility electronic data interface
(EDI) communication.
Under the municipal billing approach, municipalities will arrange with landlords to
transfer the repayment obligation from the electrical meter to the water meter through
creation of a unit specific account. For the residential sector, this mechanism would be
easily deployed for owner-occupied single-family homes, which have a single occupant,
water meter, and power meter.
Under the contractor billing model, CCA customers will receive CCA-service-based
loan account services through the CCA’s customer portal, in which they may access
their individual energy consumption, billing information, savings, environmental impact,
and other account information as determined by the CCA.
While municipal billing offers a stronger platform of engagement, either of these
approaches will significantly increase DER program participation as well as the average
savings per retrofit. This is because the scale of the retrofit will be based on what
makes the most long-term financial sense, instead of on what the customer can afford
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to implement at a given point in time. It should also lower the transactional costs of
collecting payments for efficiency measures installed.
j. The Value of a Negawatt
Another barrier to customer adoption of energy efficiency is uncertainty surrounding the
financial benefits of the efficiency measures installed. Selling efficiency is in large part
convincing the customer of benefits that cannot be measured directly, as it results in
the avoidance of consumption. In addition, many customers may temporarily see bill
savings after a building retrofit, but then will install a large appliance (e.g., a hot tub) and
see their bills increase. This is sometimes referred to in the shared savings sector as the
‘hot tub’ effect. If the customer is unaware of this effect, it could negatively impact their
perception of the program. This is less of a problem for larger and more sophisticated
customers, as they typically employ maintenance personnel that understand these
issues, and the project is large enough to negotiate a highly tailored shared savings
agreement.
For smaller projects, point-of-sale software allows for transparent demonstration of
projected bill savings. Program delivery mechanisms should ensure that the ‘hot tub’
effect is explained to the customer, and implement a shared savings agreement that
takes this into consideration. Similar functionality should be incorporated into customer
web-portals, such that the customer may see how much their efficiency measures have
saved them in energy costs, and what their bill would have been absent the measures.
For more complex projects at larger sites, the use of ‘Smart Building’ end-use metering
equipment and associated pattern-recognition software should be deployed (where
cost-effective), both to monitor and prove savings, and to guard against savings
degradation over time (continuous retro-commissioning).
4. Northampton/Amherst/Pelham Energy Equity CCA 3.0 Scenario
A local CCA 3.0 program would administer a customer shares program and municipal
cooperative program to willing member municipalities and help them to organize a
financing program with their residents and businesses. The financing program is based
on revenue bonds, state zero interest loans, or other private sources such as local
banks, cooperatives and credit unions. The financing enables DERs development
among municipal buildings, campuses and adjacent multi-residential and commercial
buildings, as well as single-family homes, home businesses and farms. A municipal
billing system, Software-as-a-Service web-based portal and/or Transactive Energy
Platform would then be administered for generation and storage metering. A universal
offering includes shares and home/business energy efficiency for any customer, and
cooperative shares for customers who actively organize a cooperative with their
neighbors in the building, on the block, or in the same neighborhood, using both off-site
virtual and on-site sharing adders, fees, or rates, as approved by the Department of
Public Utilities (DPU).
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National Grid and Eversouce will provide a local CCA with monthly billing data histories
for all customers under Massachusetts DPU rules and described within the relevant
tariffs of the IOU regarding municipal aggregators, at a single charge per request. 5
[Place marker for “3.0 Transition Plan” pending final edits of transition plan document]
5. How to Access Social Equity
Equity is defined as a reasonably expectable multi-decade economic benefit, much in
the manner of a low-to medium-risk/yield investment or retirement account. In this case
the benefit is manifest in accumulation of shares in DER and the value of energy
generated for the life of DER equipment. Savings are generated by long-term
forecasted cumulative energy demand offsets and not short-term transactions. This can
take various forms based on state CCA laws and regulations, and municipal
governance statutes that define the economic development and community services
practices of cities and towns. These also vary by municipal policy and charter, which
provide for planning and executing new programs for public welfare and safety.
The CCA 3.0 program is designed to avoid barriers to CCAs to directly manage equity
by partnering with member municipalities to manage the investment relationship with
the customer, and administering the procurement planning and administration (billing
and data processes) on behalf of the customer. This is done by a cooperative
arrangement, between a CCA agency and a member municipality that offers a DER loan
to a resident or business owner who is a CCA customer and has opted “up” (shares) or
“with” (cooperatives). Under this arrangement, the CCA customer voluntary chooses to
pay a CCA to “invest” in a product involving a rate premium (per kilowatt hour or
voluntary surcharge) that the CCA has agreed to transfer to the municipality’s customer
DER loan account. As the loan is being repaid and financial equity accumulates, the
CCA applies credits to the customer’s bill reflecting that ownership, much as would
occur in the purchase of solar panels for one’s home or business.
Voluntary organizations will be formed by CCA customers outside the powers of
municipalities that will be facilitated by a CCA-adopted policy and administrative
protocol. Cooperatives or local business and institutional groups may include neighbor-
initiated microgrids, commercial complexes, multi-residential buildings, mixed use
areas and live/work buildings, 24-hour access buildings, institutional campuses,
essential public facilities, with the municipalities themselves acting as owners of
buildings and fleets, and consumers of energy and transportation fuels. All of these are
particular development targets of this approach.6
5 Utility fees for customer data vary not only by state regulation but also by individual electric
utility distribution company tariffs. Because a Northampton/Amherst/Pelham CCA will cross
Eversource and National Grid service territories, data costs and protocols will differ somewhat
between the two entities.
6 Cooperative membership structures and rules vary by co-op, but must include provisions for
residents that elect to relocate or otherwise terminate membership, as well as provisions for
offering admittance and receiving new members in their place.
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As municipally formed and governed programs, CCAs already benefit from what
Peregrine’s first draft report called the high level of public trust in municipal
government, compared to a very low level of trust toward energy marketers, including
green energy marketers. Local Power’s “CCA 3.0 Pathways” report describes public
mistrust of competitive suppliers resulting from chronically misleading offers and fraud
as a massive barrier to public participation in all green offerings, including DERs.
Climate mobilization depends upon residents and businesses choosing to invest in
local DER. By partnering with municipal governments to assume a key customer-facing
role in equity, CCA 3.0 will strengthen this trust with customers to drive up participation
rates above conventional levels of green pricing and community solar, which, being
limited to owners and customers able to pay premiums with no payback or return-on-
investment, are inconsiderable. CCA 3.0 programs will focus strategically on
establishing trust through local citizen engagement, adopted policy declarations of
public purpose, and operational transparency and full financial disclosure with
customers: elements which are sorely lacking in conventional energy markets whether
regulated or unregulated.
Most current CCA practices outside California in which CCAs do not administer the
customer relationship, leaving customer call centers and account management to their
chosen retail suppliers and CCA brokers, miss a massive opportunity to get the
attention of community members and civic and community organizations with the
message that this program is different. Such CCA programs are over-dependent upon
the crucial opt-out enrollment mechanism that CCA creates, neglecting to add more
voluntary choices for customers who consent to participation in CCA services. A
climate mobilization can be no less than something significantly different from the
status quo: a new deal. In this respect, a Green New Deal in actual fact, not a de
minimis government program with marginal benefits. CCA 3.0 represents a coordinated
action of the community (residents, businesses and municipal government) to co-invest
in a physical local climate mobilization.
Local Power's “CCA 3.0 Pathways” report outlines a customer engagement strategy for
the CCA to actively solicit and manage development of DER facilities at economically
advantageous and energy-critical sites that are identified from CCA-held billing data
histories, and a Job Order system to solicit developers for CCA-compliant bids to
develop and maintain DERs. The CCA can partner with local educational institutions
and unions to train workers for placement in planned local DER development, and use
the job order system for local contractors to facilitate job placement applications.
Along with CCA 3.0’s programmatic expansion to EVs and heating/hot water, and the
engagement of customer investment, local labor and economic development elements
form a comprehensive climate equity impact worthy of the name Local Green New
Deal. CCA 3.0 can provide equity customer benefit to a broad swath of the local and
regional population in diverse ways, including:
a. Energy efficiency (avoided consumption),
b. Shares (bill offsets),
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c. Co-op membership shares (bill offsets and avoided consumption),
d. EV collectives, sharing and individual ownership (bill offsets and avoided
gasoline costs),
e. No-commute energy efficiency and development jobs (resulting from locally-
based labor and contractors whose avoided transportation reduces greenhouse
gas emissions and whose local economic activity results in economic multiplier
benefits and wealth retention in the local economy),
f. Short-commute contracts for developers (reduced transportation greenhouse
gases and regional economic multiplier effects),7
g. Neighborhood energy independence and resilience (available onsite stored
energy during utility transmission/distribution grid failures).
6. Financial Stability and Sources of Revenue for CCA 3.0 Energy Equity
The keys to financial stability are (1) diverse sources of funding and (2) a light
cost/revenue ratio, as explored in the following.
a. Diverse funding sources from startup to operations
The first key to municipal stability is that its role in the program is, while important, de
minimis, consisting of financing account management, planning and permitting. The
CCA provides all other work and assists the municipalities in adapting their existing
billing and communications platforms to support the CCA-initiated projects,
coordinating with their planning, permitting and billing processes, and educating staff
and decision-makers. Municipal program costs are recoverable through an increment
on financing payments, revenues from municipal shared renewables facilities, and sales
of energy from municipally owned renewable DERs as well as lease fees on rights of
ways, and state government grants.
A universal shares8 offering, like “universal service,” means that all customers will be
offered a shares package of one kind or another, based on opting-into the CCA and
electing an adder to pay for DER finance. Shares serve customers like renters who
don’t own or occupy cost effective or feasible sites for DERs. This would be considered
7 State and local laws define the rules governing municipal procurement. While this report does
not include a legal analysis of the rules in each state or municipality, and mandatory local
sourcing practices are generally not allowed, point award systems and local training and hiring
processes are generally accepted methods of giving preference to local contractors in municipal
solicitations/procurements. Accordingly, CCAs in each state should determine the best
approach to take to establish local preferences accordingly. No-commute and short-commute
provisions are mentioned here because they confer broad public benefits, not merely benefits to
the local community, based on reduced transportation-related greenhouse gas emissions.
8 The “universal shares offering” component of CCA 3.0 is also discussed in the CCA 3.0
Pathways report.
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a more passive relationship to equity offerings, for which any customer would be
eligible irrespective of their occupancy status or geographic location within the
participating member municipality. Alternately, active consumers organizing a renter’s
microgrid cooperative with building owners, or multiple owner occupied buildings, may
proactively apply to the CCA and municipality for financing and
developing/administering accounts for their own onsite, on-block or in-neighborhood
microgrid.
Whether a municipality employs its own revenue bond authority, partners with a local
bank or credit union, engages available state financing (e.g. Massachusetts’ zero
interest loan program) or engages third party financing (with declining local equity
benefits in that order), the structure (if not the quality) of equity is the same, simulating
the benefits currently received by wealthier consumers who own properties and install
DER on them. However, whereas the revenue basis of equity under conventional DER
comes from Net Metering and FIT payments, CCA 3.0 equity revenue originates in
avoided grid energy consumption and customer sharing of flexible resources.
Under this approach, the CCA, which evaluates candidate sites for development based
upon customer data and CCA cost of service analysis, recommends a technology mix
and with forecasted Return on Investment (ROI) for the site, based on capital cost
range. The municipality then approves or denies the resident, business or cooperative
for financing, and if approved, estimates ROI for the customer, based on currently
available capital cost (final approval may depend on underwriter if commercial or third
party-based). The steps are:
i. Customer makes a decision based on CCA-forecasted ROI, which
includes increment to fund municipal and CCA administrative services.
ii. The accumulation of customer shares results in equals monthly energy
bill offset.
iii. Energy efficiency is financed by sharing savings between customer
and all other customers in a CCA (in addition to separate energy
efficiency funds administration in MA/CA).
iv. Customer equity accumulates over seven-20 years based on public
solicitation responses, generating reported monthly DER net kWh.
v. Energy equity continues to generate energy and revenue after ROI, as
well as ownership of solar DER equipment as long as it continues to
generate revenue. The program will compensate the customer while
continuing to cover CCA maintenance, operation and administration.
With the loan retired, the municipality would cease to collect an
increment.
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vi. The transaction will result from a DER Software-as-a-Service and/or
Transactive Energy Platform monthly ledger to CCA, which allocates loan
payments based on customer-generated/stored energy9
b. Funding focused on revenue generating activities/local development
The second key to CCA financial stability is defining its mission and focus not as an
energy seller or “utility lite” but an administrator and developer of local customer-owned
DER.
CCAs have very light administrative staffing requirements after startup compared to the
revenue being managed and investments developed and operated. Because power
supply and distribution are already managed by the utility, CCA power procurement is
conducted by one person, and the other staff are support personnel focused on DER
development and operation: data, DER metering and account management, call center,
planning, regulatory compliance and contractor management. All DER projects are
implemented by contractors under performance contracts in which costs are
internalized in customer rates, such that the operational cost to program funding ratio is
very small, the program light: a micro-agency partnered with member municipalities to
coordinate significant levels of local economic development in the private sector.
Having a relatively light staff with most staff focused on development creates positive
cash flow. CCA programs in some states establish operational reserves in order to be
able to directly issue revenue bonds. Some states limit the ability of CCAs to establish
reserves, but municipalities introduce important investment and planning resources to
support a partnership approach, through an inter-municipal agreement or creation of a
Joint Powers Entity. The key stable sources of revenue available to the CCA to fund a
sustainable, growing program come from the following sources, in order of access and
of potential magnitude:
i. Administrative adders/fee (taking the broker’s responsibilities in-house)
ii. Operational adder/fee
iii. Energy efficiency program funds10
9 Crowdfunded projects must comply with Securities and Commission rules for “exempt
offerings,” which (1) require all transactions under Regulation Crowdfunding to take place
online through an SEC-registered intermediary, either a broker-dealer or a funding portal; (2)
permit a company to raise a maximum aggregate amount of $1,070,000 through
crowdfunding offerings in a 12-month period; (3) limit the amount individual investors can
invest across all crowdfunding offerings in a 12-month period and; require disclosure of
information in filings with the Commission and to investors and the intermediary facilitating
the offering. Securities purchased in a crowdfunding transaction generally cannot be resold
for one year. Regulation Crowdfunding offerings are subject to "bad actor" disqualification
provisions. States “blue sky” laws also apply.
10 In its first draft report, Peregrine estimates a Northampton/Amherst/Pelham CCA could
administer $5M per year in energy efficiency funds. At 2.2 million MWHs of load and 205,000
customers, the Cape Light Compact administers approximately $42M/year.
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iv. Finance contract administration charge (a percentage of debt service)
c. Delegation of customer DER finance administrator in member municipalities
electing to partner to facilitate CCA Energy Equity through Rate Structure to
residents and businesses within their jurisdictional boundaries
CCA member municipalities are a critical resource for CCA 3.0 because municipalities
are widely known and trusted, possess significant resources of high value to CCA DER
equity marketing, and can leverage financing or organize trustworthy financing options
for local residents and businesses. Municipalities also provide: the operation of multiple
scheduled billing and public information direct mail to residents and businesses,
leverage in utility interconnect permit and potential government permit and funding
applications (depending on what is being developed), and standing as state chartered
corporations in state government agencies, concerned either with CCA or renewable
energy development or consumer protection.
Under CCA 3.0, member municipalities will provide financial administration and
potentially municipal revenue bond (“green bond”) financing to individual residential and
commercial customers of the CCA whose business or residence is located in its
territorial boundaries. The role of municipalities as CCA customer shares partners
consists of six activities:
i. Municipal bill account charge and security
ii. Float revenue bonds (taxable for public benefit, tax-free for private) or
contract with state lenders (e.g. Massachusetts zero interest heat loans)
or other local lenders (local cooperative banks, credit unions, local
banks) for project underwriting of the off-bill financing arrangement (or
on-bill if regulations are adopted).
iii. Sign and submit utility distribution company interconnect permit
application for CCA-developed DER facilities
iv. Grant CCA option on municipal properties and rights-of-way for DER
development for shared microgrids in which each customer pays a
voluntary rate to receive bill credits based on the CCA-administered
accumulation of share equity.
v. Create data link to the CCA's monthly premium transfer system
vi. CCA-Member Municipality Relationship
d. CCA-Member Municipal Interaction under CCA 3.0
The interaction between municipal agencies and CCA staff is fairly light, focusing on
providing very circumscribed forms of support in a routine schedule, The CCA provides
the lion's share of ongoing work to request specific actions from staff, while municipal
governing boards make policy decisions at routine meetings. Staff coordination and
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cooperation is most time-consuming during formation, subsiding to an account
management system, project finance approval protocol, and permitting consultation.
Their interaction will occur through the following channels:
i. MOU defining CCA services, municipal services and administrative
funding
ii. Data sharing and shared municipal facilities frame agreement
iii. Planning and acceptance
iv. CCA premium to municipal loan repayment contract
7. Environmental Justice and the Distribution of Benefits through Equity in
Ownership of Renewable Energy
In order to extend equity offerings across the local population, diverse forms and
technologies of equity is offered based on a shares and cooperative engagement
model.11
a. Onsite Shares
An onsite shares arrangement involves the physical sharing of stored renewable onsite
capacity among occupants and site owner:
i. City has finance contract with DER site owner
ii. Customer signs up for customer opt-up payments to repay loan
iii. CCA transfers percentage of payment to customer equity loan
account established by member municipality
b. Offsite Shares (Opt-up)
An offsite shares arrangement involves an arrangement of virtual sharing or bill credits
based on the provision of onsite energy and capacity to the site occupants and owner:
i. CCA identifies host CCA customer
ii. Municipality offers financing to customer
iii. CCA develops project through solicitation or Job Order system
iv. CCA negotiates with CCA customer for shares participation
11 Among the project categories listed, more work needs to be done, based on state and local
laws and regulations, CCA program policy (e.g. identification of specific stakeholders involved),
to define the benefits and risks to the parties involved.
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v. Host customer and shares customers opt into CCA premium
vi. CCA monthly transfer of percentage of payment to municipal loan
accounts of host and customers according to terms
c. Onsite Co-ops
Onsite cooperatives involve an agreement between site occupants and tenants to
physically share onsite electricity and storage:
i. Customers join/form building, block or neighborhood co-op
ii. Co-op applies to CCA for billing support
iii. Co-op applies to Municipality for financing
iv. Customer opts up for CCA co-op payback rate
v. CCA member municipality signs MOU with CCA Manager
d. Co-op Microgrid
A cooperative microgrid involves the same arrangement with a microgrid, under which
onsite members consuming less from microgrid resources are compensated for
providing energy and capacity to onsite energy consumers consuming more. Under the
proposed approach, municipalities will either directly offer or arrange/administer
financing with other sources, CCA will administer billing, and ownership models will be
determined by each cooperative and subject to approval by the CCA and member
municipality:
i. Owners (municipal finance)
ii. Tenants CCA “opt-with”
iii. Offsite shareholders CCA opt-up
iv. Integrator/operator - CCA job order
v. Supplier - CCA RFP (or finance partner PPP)
vi. May include generation/capacity sharing and neighbor automobile
sharing
e. Government/Commercial Microgrid
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A government/commercial microgrid involves a virtual sharing of customers in a
percentage of an offsite microgrid-enabled DER facility:
i. Up to 49% (site owner holds controlling interest) CCA shares
participation required
ii. Site consumes energy, with share bill credits by CCA or municipality.
iii. May include generation/capacity sharing and co-worker automobile
sharing
f. Electric Vehicle share
EV sharing combines the protocols of conventional car sharing groups with Vehicle to
Building (V2B) reverse port-based flexible storage integrated with DER:
i. CCA builds database of opt-up applicants, requests work information
ii. Scheduled use based on proximity and complementarity of schedule
iii. Focus on flexible onsite renewable storage, with cost of EV electricity
offset by onsite shared use of renewable storage
iv. Home based charger, work-based charger - variety of ways to
implement this, from offering free/subsidized chargers for sharing rights
to free/subsidized energy for purchasing a sharing-enabled charger.
h. Electric Vehicle ownership
EV finance contracts offer subsidy bundling, finance assistance and discounted
electricity rates or batteries in return for the customer's agreement to share battery
capacity with neighbors or co-workers:
i. financing agreement and storage sharing agreement.
ii. consumers purchasing EVs outright could be offered cheaper energy
in return for sharing storage or the car with neighbors.
i. Offsite share of municipal/commercial/other large customer DER
Sharing of non-microgrid DER involves virtual or bill credit-based equity benefits
to renters and other small customers through investment in local DER on public, large
commercial and institutional sites whose accounts are physically served by those
customers.
i. Monthly bill credit based on cumulative equity benefits defined by CCA
share policy
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j. Offsite share of block/neighborhood cooperative
Offsite share of block/neighborhood cooperatives allows customers in a neighborhood
whose buildings are ineligible for DER or microgrids to pay a voluntary rate to receive
equity benefits of an on-block or in-neighborhood DER cooperative that elects to
accept its application to invest:
i. Cumulative equity benefits defined by CCA-accepted co-op-share
agreement
k. DERs for residential and business customers who rent account site
Apart from shares to extend virtual benefits to all, and administrative support to
cooperatives “Portable” DERs for renters are a critical pathway to serving renters, who
are often low-, medium-, and fixed-income residents and small to medium commercial
customers.
Portability confers equity in this case because renters may bring their appliances with
them, and increasingly modular renewables, storage and heating systems, once paid
for, are the customer’s property and move with them.
Offering financial equity not merely to affluent building owners, but all customers,
portable DERs offer the financial benefits of equity to all. Conversely, as described
above, profound energy transformation requires reaching all people, not just the largest
loads or low hanging fruit, which the current state system and market already serve, but
the redlined majority:
i. IP Thermostats
ii. Plug load appliances
iii. EVs
iv. Modular HVAC (e.g. air source heat pumps)
v. Hot water
l. DER finance security for renters, customer churn, customers missing payments
CCA 3.0 leverages a customer’s bill payment capability to repay financing, as opposed
to traditional rebate and subsidy programs, which tend to help reduce costs for (the
minority of) customers who can already afford to provide more of the up-front capital
costs on their own.
While the overall pattern of power customers is typically stable in terms of bill payment,
there are some potential payment issue scenarios that will need to be addressed in
program design and management. A CCA 3.0 product design will seek to lower
stabilize the customer’s bill ‘balance’ as much as possible, such that power generation or
savings offsets the added portion of the bill that goes toward capital and finance costs.
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Serving low-income customers dictates that there will still be customers (as with any
utility company) who fall behind or can’t pay their bill. There also will also be the factor of
share customers, whether renting or owning their occupancy, decide to relocate outside
the municipality or CCA, and although the repayment for the deployment would transfer
to the next occupant the property sits empty instead for an extended period, thus
’stranding’ the equipment.
The program should facilitate contracts and mechanisms that allow building owners to
approve upgrades, and tenants benefit from lower utility bills. For commercial
properties, lease agreements may stipulate that the landlord pays for all capital
improvements while the tenant pays for the energy bills. The financed efficiency
approach mitigates this barrier, as the landlord is not required to pay for the measures
up front, and the tenant enjoys lower bills while also over time paying off the measures
installed.
The customer agreements associated with asset implementation would fall into two
groupings; those agreements with persons or entities with control over the site where
the installation would be located (owners or tenants), and those agreements with
customers who will own an indirect share in a community installation, but will not have
any assets located on their property (whether rented or owned).
In general, the on-site customer agreements would cover:
● Access for installation
● Customers roles and rights during any design processes, and installation
● The customer’s rights to asset benefits
● The expected cost of the assets (capital and ongoing maintenance if applicable)
and any program financing methods to be used to repay installation costs. This
would include conditions applicable to the rights to use of power, shared
savings, and billing rates associated with the financing of the assets
● Remedies for any customer default; such as repossession, or activation of any
security measures involved in the transaction.
The shared asset (off-site) customer agreements would include:
● The customer’s rights to asset benefits
● The customer’s ownership and transfer rights to a share in the asset
● The expected cost of the assets (capital and ongoing maintenance if applicable)
and any program financing methods to be used to repay installation costs. This
would include billing rates associated with the financing of the assets.
8. Environmental Justice: Distribution of Benefits through Rate Structures
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Apart from opt-out enrollment, the key (and widely neglected) leverage of CCAs to
support energy equity is its ability to design rate structures, and to offer energy
products through rates in the form voluntary premiums, to repay customer DER loans.
CCA managers have a variety of ways to charge customer’s premiums dedicated to
equity payment, from administrative adders to pay for CCA staff or renewable energy
projects, to operational adders to pay for renewable energy facilities and energy
efficiency measures. In some cases, adders may be bundled into rates for consumer
product transparency. CCAs with utilities offering billing access or favorable metering
may use them, but CCAs with limited bill access may employ member municipality
water/sewer/tax bills as a repository of CCA premium equity transfers.
CCAs with limited metering or billing options may employ commercially available
transactive energy platforms and autonomous interoperable DER generation, storage
and usage logging for allocating benefits among voluntary participants. Distribution
utility bills may be used to collect adders, fees, and or rate adjustments, as permitted
by state regulators.
a. CCA actions for energy equity through rate structure
As described in this document and the CCA 3.0 Pathways report, the CCA will continue
to provide the lion’s share of all program work, covering CCA-defined service and
supporting member municipality DER customer finance and planning programs, with
member municipalities providing targeted assistance and participation in an electronic
data exchange. While the grid energy procurement and planning and customer
interface functions are taken in house, these basic activities comprise a fraction of work
performed by the CCA at first, and shrinking to a small portion of work/budget once
DER development is underway, and an insignificant part of the budget once DER
operations become new jobs at the CCA.
There are five categories of activities CCAs will undertake, listed below., Depending on
the size of the CCA, the number of staff corresponds to full or part time equivalents of
each of the five categories during launch phase (year 1-2). Depending on the number of
customers served by the CCA and success of customer investment in DERs, this
number may double or more during development phase (which includes establishment
of administrative hardware and software systems and resources) and double or more
again when significant levels of DER are operational and energy efficiency retrofit
operations are underway.
These five elements are funded, defined and placed incrementally, consisting of both
staff starting with the CCA manager and growing to administrative, customer service
and contract management personnel, and consultants required for setup and launch of
new programs or selectively outsourced specialty functions (e.g. transactive energy
billing platforms or Virtual Power Plant/microgrid operators, DER battery storage and
peak shaving). Contracted functions should be direct reports to the CCA Energy
Manager to ensure that the CCA maintains adequate knowledge of contractor
functions, maintaining best practices and evaluating whether and when to bring their
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functions in house through licensing agreements or other available means. The five
CCA activities are:
i. Procurement from supplier(s) and design/build/maintain contractors
ii. Real-time Desk with demand dispatch
● DER operation
● State agency compliance (state regulator, ISO)
● Public relations
iii. Data, administration, communications
● Data management/analysis
● Web, mail (web account)
● Back office
● Transactive energy platform
● Monthly calculation and payments to municipal member
customer equity accounts.12
iv. Development, contractor and agency partner management: collect,
compile and maintain available utility, government and commercially
available data. Manage DER design/build/operate contracts for financed
installations (municipal revenue bonds or local banks/credit unions) and
demand side management contracts paid for by regulated energy
efficiency funds (MA/CA). Use municipal water/sewer or tax bill as
allowed by state and local laws and charters. Prepare municipalities’
utility interconnect applications for DERs and any other regulatory filings.
Manage all data and technical energy matters.
v. Outreach, customer education, civil participation: customer service
local phone number/account management, advertising, free media, local
activist engagement, civic organization engagement, business
organization engagement
b. Transactional arrangements between customer, CCA, municipality
It is critical to convey that CCA 3.0 is a local democratic initiative that will require
community effort in order to achieve a scaled climate impact, confer equity, and
develop the local economy. Further, it will reach out to state agencies and local lending
institutions to fund the micro-agency's launch and organize low-cost financing for
customers who opt-up, -on or -with. The success of the CCA 3.0 financing will depend
upon two main partners; the citizen/consumer (individually or in co-ops), and member
municipalities:
i. An awakened and sustained local civic and economic participation: a
Local Green New Deal and Climate Mobilization
ii. An active partnership of member municipalities
12 For example, the City of Cincinnati CCA (Ohio) puts information about their programs in both
their opt-out notices, as well as in local water bills. See Local Power’s CCA 3.0 Pathways report.
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Key administrative and community processes need to be organized in order for the
optics on CCA 3.0 to have a clear pathway. These are political and policy decisions,
based on public discourse and local political leadership, not technical challenges. Local
political leadership must put forward CCA 3.0 for discussion and approval as a self-
funded community-based redevelopment “micro-agency”, with increasing local
management of CCA programs based on widespread participation by members of the
community.
Transactions occur in three forms: (1) contract between a customer (and co-op) and her
municipality to finance her equity, (2) a voluntary choice of her CCA's "opt-up" (shares)
or "op-with" (co-ops) product options to basic service rate; and (3) an agreement
between a CCA and a member municipality. Thus, the following transactions will
implement the service:
i. CCA - member municipality MOU for CCA and municipal account
cooperation
ii. Municipality
● customer loan
● co-op loan
9. Usage Data and Metering
Monthly data is used for ROI forecasting and targeting for aggregate load benefits.
Lower retail rates may be accomplished by targeted planning and development to
reform the CCA’s Load Duration Curve (8760 hour per year shape).
CCAs will employ consultants to assist with rate design. State restrictions on revenue,
such as New York, restrict financing by CCAs. The CCA 3.0 program is designed to
overcome this barrier through member municipalities offering aligned financing
programs to residents and businesses so that CCA bill payments are partially allocated
to customers according to a voluntary agreement, and with transparent accounting.
The program does not depend upon Time of Use (TOU) meters on all participating
customers, though DER facilities will very likely have TOU meters installed as is
standard practice on medium-scaled systems. The program will employ generation and
storage metering, EV meters, heat and hot water meters to provide data for equity
account calculations and loan payments. The CCA will bill consumers for power
consumed in the conventional manner according to conventional utility meters, settling
the customer’s benefits off-bill under member municipal management. Load shaping
will be achieved through long-term development of targeted facilities and avoiding of
aggregate load and seasonal peaking, not through short term transactions like load
shifting, unless adequate metering is available and such transactions are deemed
appropriate marginal monetization strategies.
10. Security and Revenue
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Utilities provide collection on power through state-regulated protocols, while
municipalities provide collection on finance agreements according to its customer
equity finance contracts, such as discontinuation/reduction of benefits, transfer of
shares to the common pool, imposition of charges on water/sewer/tax bill, or
conventional collection by lenders, depending on the (municipal, state or commercial)
underwriter the municipality (or, alternately the CCA) chooses.
a. Utility - utility bill with CCA charges imposed according to utility tariffs
and state rules
b. Municipality - DER finance contract
c. Municipal PPAs on properties and rights of way
d. Joint Powers Entity/Agency: hold revenue bond authority in addition to
grouping municipalities in a CCA
e. Rental owners
f. Available state and local programs like PACE and zero interest loans
(Massachusetts)
f. Local bank financing
g. Third party/developer “tax appetite” financing via the Investment Tax Credit
(ITC) / assessing the transfer of ownership provisions after tax period ends.
11. Customer Experience of a Universal Shares Offering
Residents and businesses in a CCA 3.0 program will be offered more than the current
“standard offer” of conventional service mitigated RECs (when they do not opt-out) or
an option of paying a premium above their rate for an additional purchase of RECs
(when they opt in). Instead they are offered DER equity and/or DER equity benefits, by
paying a premium above their rate in order to incrementally accumulate those benefits
through monthly bill payments.
This approach will reproduce the general return on investment (ROI) calculated
by homeowners who purchase photovoltaic systems for their homes, but not require
that the customer own the property they occupy, nor only serve property owners with
ideal conditions like unimpeded southwest facing rooftops. Included in this option will
be bundled an energy efficiency analysis and shared savings offering to reduce load in
renters as well as owners' occupancies. There are five categories of savings:
a. Opt-up to shares
b. Notification of project on line
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c. Energy efficiency shared savings
d. Receive monthly account of paybacks
e. Non-bill payment- suspension of share payment and transfer to
water/sewer/tax department collection as allowed
12. Distributed Energy Resources (DER) Development Planning
DER development is driven by the CCA with the municipality as client, and customers
as voluntary third-party beneficiaries. The CCA leads the development process:
a. CCA develops member municipal properties
b. The municipality is lender and holds title until customer loan repayment is
complete, after which it manages the account in relation to the CCA, which
calculates the benefits defined in the municipality’s customer finance contract
with a customer or cooperative
c. CCA leads municipal permitting process for residential and commercial
properties
d. CCA creates Job Order System to accommodate local contractor
participation and trains/coordinates local labor training and placement programs
e. Municipal financing is based on a CCA agreement
f. Medium-scale DER projects (100kw-500kw) are financed
g. Interconnect permitting is non-exporting
13. Inclusive Representation
Success in engaging low-, middle-, and fixed- income residents and small- and
medium-sized businesses depends upon both civic and economic participation, in a
synergistic, open, encouraging protocol to facilitate high participation rates across all
socioeconomic categories and customer types.
An inclusive program will depend upon a variety of engagement strategies to reach a
diverse population of residents and businesses. Most critical is a deliberate strategy to
encourage civic participation to reflect the program’s emphasis on equity participation,
as well as active citizen/business-led cooperative projects.
On the civic engagement side, a CCA 3.0 program should form voluntary citizen
participation committees to work on policy questions and technical questions,
contributing to staff workload and consultant work, engaging and informing the
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community at the local level, and reporting to the CCA governing board at monthly
meetings. Advisory boards may be created to focus on grassroots engagement of
neighborhood organizations and activists to encourage low-, middle- and fixed-income
customers, as well as local businesses, to participate in the meetings. Issue-Advisory
committees are useful to focus on key program goals such as participation of
disadvantaged and redlined residents and often redlined business customers, as
described in Local Power’s previous CCA 3.0 Pathways report.
On the economic engagement side, using customer data from the utility and member
municipalities as the basis for customer engagement, the CCA manages a robust web
database account management system and CCA-staffed local call center. The CCA
actively engages shares/co-op consumers and DER site hosts from communities
including local climate activists, civic organizations and business organizations. The
CCA routinely inserts announcements in scheduled municipal billing and public
announcements, conducting direct mail for data-targeted offers to customers,
advertising and free media. CCA 3.0 programs will rely on a diverse platform of mostly
low-cost, special access public purpose and conventional marketing, subscription and
account management resources:
a. Database
b. Software-as-a-Service and/or Transactive Energy Platform,
c. Utility bill rate ready/bill ready submission,
d. Monthly water/sewer bill or annual tax bill submission,
e. CCA and member municipality web account and public email
broadcast lists,
f. Direct mail,
g. Speakers bureau to local community groups and business
organizations,
h. Paid advertising,
i. Free media.
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Appendix A: Glossary of Terms
8760 -- The electricity usage pattern over every hour in a year.
AMI -- Advanced Metering Infrastructure -- sometimes called Smart Meters -- meters
that facilitate realtime collection of customer energy usage for the purpose of analysis
and DER integration.
CCA -- Community Choice Aggregation -- the statutory mandate that allows
municipalities, solely or in groups, to become the buyer of electricity for customers
within its jurisdiction on an opt-out basis. The details and powers of a CCAs statutory
authority vary slightly by state.
DSM -- Demand Side Management -- the dynamic monitoring and control of customer
demand through energy efficiency and demand response technologies.
DER -- Distributed Energy Resources -- renewable and efficient technologies that
provide energy at or near the point of consumption.
DERMS -- Distributed Energy Resource Management System -- the software and
hardware that allows DERs to be integrated
DOER -- Massachusetts Department of Energy Resources -- a research body similar to
NYSERDA and the CEC
DPU -- Massachusetts Department of Public Utilities -- the state utility regulator.
DR - Demand Response -- the ability to curtail loads and dispatch power in response to
specific conditions and needs, enabled by smart technologies like AMI meters and IP
thermostats.
EE -- Energy Efficiency
ESCO -- an energy services company, in many states the third party suppliers of
electricity to CCAs
FiT -- Feed-in-Tariff -- a fixed price by kWh paid for all the power produced by a
renewable energy installation.
GW -- Gigawatts
IoT -- Internet of things
IP -- Internet Protocol -- a technology that can communicate with and be controlled
remotely via the internet.
ISO -- Independent System Operator -- regional electricity market clearing entities.
They are non-profit organizations that facilitate bulk electricity transactions, among
other related activities. New England by ISO-NE, or frequently “NEISO”
ITC -- Investment Tax Credit -- the ITC a corporate tax credit, equal in the case of PV
projects to 30% of the expenditures on a given project.
kWh -- Kilowatt hour, the unit that is used to price the sale of electricity.
Load Duration Curve -- 8,760 hour per year demand pattern, in this case defined by
eligible accounts in a CCA service territory, and differentiated by commercial and
residential sources, representing actual recorded load and billed purchased energy, and
representable in a 365 leaf fluctuating sine curve.
MW -- Megawatt
Microgrid -- Integration of DERs to provide on-site as opposed to remotely sourced
electricity.
Local Power LLC Draft II CCA 3.0 Equity Lens
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NEM -- Net Energy Metering -- a tariff that pays a set rate for the generation of
electricity from a renewable source while providing electricity to a meter at all times.
Production and consumption are netting against each other.
Negawatt/Negawatt Hour -- A negawatt hour is the assignment of monetary value to
reductions in the use of electricity; a theoretical unit of power representing an amount
of energy saved. The energy saved is a direct result of energy conservation or
increased efficiency.
OBF or On-bill financing/repayment -- The ability to finance DER, traditionally EE,
measures over a period of time, often years, embedded within the bill or rate that a
customer pays on a monthly basis for electricity, heating fuel or water -- a way of
minimizing or eliminating upfront costs to adopters.
Opt-in -- Every customer offered service is automatically enrolled on an opt-out basis,
meaning if they do not elect to remain with the distribution utility’s Basic Service or
another supply if available, they will be enrolled in the CCA, meaning they have “opted-
in.”
Opt-up -- Under the CCA 3.0 program design, customers may volunteer to pay a
premium to receive shares, ideally through a municipal loan agreement and billing, or
else through a CCA-administered Transactive Energy Platform, using lmunicipal bonds
or other public funding, local banks or if necessary commercial project finance for
facilities with a tax-based ownership transfer or “flip” provisions to the co-op/shares
customer. Thus, customers “opt-up” to equity.
Opt-with -- the CCA 3.0 program will administer a similar service to active customer
DER cooperatives, which would be “opting-with” one’s neighbors.
PACE -- Property Assessed Clean Energy -- is a financing mechanism that allows DER
installations to be repaid on a property tax or other municipally assessed bill over a
duration of as many as 20 years. It can cover 100% of costs for a project and when it
paid off, energy generated or saved by installations can make participants revenue
positive into the future. Recent developments, sometimes called CivicPACE, allow
community solar installations on multi-residential buildings and participation by non-
profits.
SaaS -- Software-as-a-Service -- commercially licensed or contracted cloud-based
platforms to provide DER back office services, including reporting, customer care,
online billing and payment, and utility electronic data interface (EDI) communication.
TOU Metering -- Time of Use Metering -- is a method of measuring and charging a
utility customer's energy consumption based on when the energy is used. Utility
companies charge more during the time of day when electricity use is higher. TOU rates
vary by region and utility.
Transactive Energy Platform -- Transactive energy systems comprised of coordinated
participants that use a system of economic and control mechanisms that allows the
dynamic balance of supply and demand across the entire electrical infrastructure using
value as a key operational parameter. Regulations vary by state.