Is ‘community power’ an energy game changer?

New NH law gives local governments a tool to lower costs, boost renewables use

“Community power” legislation recently signed into law will give Granite Staters greater control over their energy choices and could help modernize New Hampshire’s energy system.

Henry Herndon

Under a community power program, local governments can procure and provide electricity to their residents and businesses on a competitive basis. By bypassing outdated regulations and legacy technologies, community power programs can harness private sector innovation to lower costs for their customers and provide other energy services. Electric distribution utilities continue to deliver the electricity over their poles and wires.

After town meeting or city council approval of community power programs, all customers not already on competitive supply are automatically enrolled, but can choose to switch back to their regulated utility or to another supplier.

At least eight states currently enable similar types of programs, sometimes referred to as “municipal aggregation” or “community choice aggregation.” Programs vary from ones enabling basic contracts for competitive energy supply (more common to Massachusetts) to more robust programs driving power sector innovation by crafting diverse portfolios of energy resources, deploying new renewables and energy storage, and enabling communities to play a more active role in energy markets (as seen in California).

Lebanon Community Power, managed on behalf of the city by the Lebanon Energy Advisory Committee, is on track to be New Hampshire’s first community power program. Numerous other local governments are considering establishing community power entities to take advantage of the new legislation. community power programs can be implemented at the municipal or county level.

A growing number of New Hampshire communities are setting renewable energy targets, with at least a half a dozen aiming to achieve 100% renewable electricity supply by 2030. The community power law will likely play an important role in enabling cities and towns to achieve their renewable energy goals.

Crafting energy portfolios

Beyond simple energy procurements, the community power law equips users with various other capabilities.

For example, Lebanon Community Power plans to develop renewable energy projects within the city to supply electricity to the community as a whole. The city of Lebanon has appropriated $2.85 million for the development of a one-megawatt landfill gas-to-energy power plant. The city is also considering options for large solar projects which could similarly provide electricity directly to city businesses and residents. These resources could be balanced alongside other competitive energy supply contracts to make up Lebanon Community Power’s energy portfolio.

Community Power programs could similarly contract with existing resources as part of their portfolios, such as existing hydropower or biomass generators in New Hampshire.

Another area where the law expands local control relates to smart meters and electric grid modernization. Grid modernization, a concept currently under study by New Hampshire energy regulators, seeks to accelerate and harness customer adoption of distributed solar, energy storage (batteries), electric vehicle charging infrastructure, and other technologies.

Grid modernization requires smart meters that can track energy production and consumption in real time. The vast majority of energy meters owned by electric utilities only log energy data once a month. Under the new legislation, community power programs may deploy their own smart meters, use them to track energy data, and unlock a suite of new pricing options to achieve greater savings both for energy consumption, and as payment for power from solar or household batteries.

Senate Bill 284, also recently signed into law, establishes a Public Utilities Commission proceeding to evaluate the development of a statewide multi-use online energy data platform. Implementation of some of the more sophisticated aspects of community power relating to smart meters and dynamic pricing will rely on modern data collection and processing.

Implementation process

The first step for a local government to implement a community power program is for the local governing body – whether it be a select board, town council, city council or county commission – to form an electric aggregation committee to develop a community power plan. Once finalized, community power plans must be approved by the local legislative body (e.g., town meeting, city council).

Multiple towns, cities or counties may group together to implement community power programs.

Some of the more successful aggregation programs in the country are achieving greater efficiencies and cost reductions by establishing shared back offices that house staff serving multiple community power programs. Shared services can range from data management and billing, to energy load modeling and forecasting, to joint energy portfolio management.

Henry Herndon is director, local energy solutions, for Clean Energy NH.

Categories: Business Advice, Energy and Environment

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