Local Self Reliance and Energy Democracy with John Farrell

You should have gotten the message we're recording. >> Great. Uh uh Welcome everyone. I'm Matt Cannon, state conservation and energy director for Sierra Club Maine, and we are thrilled to have John Farrell here today for our community conversation. He's co-director of the Institute for Local Self-Reliance and directs the Energy Democracy Initiative. Uh he's an expert in distributed energy, many accolades, and um talks a lot about benefits of local ownership and decentralized renewable energy. He hosts the local he uh local energy rules podcast um discussing monopoly power, energy democracy, and how communities can take charge to transform their energy systems. Uh we're thrilled to have you, John. Welcome, everyone, and as we after John presents, we'll have time for a Q&A. Uh and this is a smaller group, so feel free to either raise your hand or put Q&A in the chat, and I'm happy to read them if you'd prefer not to, but feel free to use the raise hand function, and we'll do it that way. So, thanks, John. >> Thanks so much for having me. I'm going to share my slides here and get us started. Um Sometimes this does something weird where it shows you like the slide preview thing instead of the actual slides. Is that what it's showing right now out of curiosity? >> Yes. >> Man, one of these days I'm going to figure that out. There we go. Is that now showing just a whole slide? >> No. >> No, it didn't. Interesting. Did on my screen. Fascinating. Okay, we'll do it this way then. I'm just going to make this big. And now it will basically show what I want it to show. >> Cool. Um great. Thank you so much for the invitation to join you. I'm going to talk about two of ILSR's kind of resources as a way of explaining both what we do and the topics that we talk about. Uh I am happy to answer questions about community choice aggregation or anything else that ILSR has worked on or stuff you heard in a podcast or anything like that. But these this I felt like is a good way to give you an overview of sort of how we work and what we do that can be very helpful to folks who are doing organizing at a state level around policy. Um I always like to start off kind of like why do we do this work? And for me it's about a few kind of key things. One is we want to see more people put solar on their rooftops, get the benefits of that lowering their bills, contribute to lowering emissions from our energy system, creating local jobs, all of that kind of thing. We love community-based projects where people can go in together, they can subscribe, get a benefit from energy, come together to do something collectively. Um we think that our energy system can benefit from uh can actually if we design it in a way that's more distributed, it also supports our democracy, which is otherwise abused by a large corporations that uh run our utility systems. And we also think about it as, you know, helping people deal with their energy bills. And I apologize for the crappy stock photo, but um it works to convey the the problems that we face when it comes to energy bills, perhaps even more pressing now than when I first started putting this into presentations. So we're really interested in figuring out how do we actually bring solutions to people and how do we like communities drive that. Um sounds like many of you already know the Institute for Local Self-Reliance. I'm not going to spend a whole lot of time uh introducing us, but just say broadly we work across the economy um to uh oppose corporate concentration of monopoly power and to advance local and community-based solutions to all sorts of things across our economy, waste and composting, uh uh broadband access, uh independent local businesses, uh as well as energy. Um so I I direct our energy work, but our the breadth of our work is um across a lot of other sectors of the economy. Um I'm going to start by talking about one key tool that we have, which is called the Community Power Scorecard. Um this is something that we update every year. We've now been doing it for almost a decade. And the idea was we really felt like there were lots of folks out there that talk about renewable energy policy broadly, but not a lot of folks that talk about what we often talk about as energy democracy, which is how does state policy help communities have more to say about their own energy future. So this was less about them saying giving states a good grade based on do you have a renewable portfolio standard that says, you know, X% renewable by this date, and instead saying to what degree do you enable communities to do things by like having community solar policies or community choice aggregation, or do you have good net metering and interconnection policies to make it easier for local solar to come onto the grid. So that's the idea behind this, and you can see Maine scores actually sadly a C grade is among the higher grades among states across the country, because unfortunately a lot of states lag on implementing the kind of policies that we think would uh benefit communities in having more of that decision-making power. Uh and I can talk a little bit more about Maine with this, but I'm mostly just going to focus on a broader overview of the scorecard itself. Um so you can see if you go onto our website where we have the scorecard, you can actually get the breakdown of the scores across all the policies that we evaluate. Um there are actually 18 policies that are included. Um about half are what we call building local power, which is to say they are things that allow communities and individuals to do more to advance clean energy, and the other about utility accountability, which is usually about how do we hold accountable the for-profit investor-owned companies that often and most of our electricity. Um we have a pretty in-depth PDF document that has our scoring methodology. So, if you're curious like why did we give Maine SC, you can go on and you can see the score that we gave it for example on a community solar policy and then you can go on and see the details of what were the components of that. You know, do we did the program have a cap? Does it have a a carve out for low and moderate income folks? Did we consider the compensation rate to be fair? Um did it have other or does it have other beneficial or restrictive components? So, uh we try to be really detailed. Uh we have model policies. Um we actually also have if you're if you're doing this with community solar, we have like a a really extensive uh table that compares across many different details uh community solar policies. If you're not doing community solar and you're interested in something like community choice aggregation, we still have some evaluative criteria to help you understand like how would you design this in a way that would be most effective to make this work as well as possible. Um so, if you want to find the scorecard on our website, um it's uh at our on our energy democracy initiative uh website uh 2025 community power scorecard. I went ahead and threw in a QR code cuz that's what all the cool people do these days, but um just Google it, you'll find it. Uh you're on a phone for some reason when you're watching this presentation, people will be able to pull it up. Um so, uh like I said before, it covers uh a wide range of policies, 18 different policies. Um you can see uh we have what's called the community power map where it's actually interactive and you can pick the different policies to see where your state scores relative to other states. And again, the policies in orange here uh building local power focused on things that we see as being really beneficial to allowing communities more choices and more to self-determination about their energy future. Um uh includes things like community choice energy or even like the ability to negotiate over uh your local utility franchise, which is something that we found as a strong point of leverage for communities. Um and then we also have these ones uh that are deemed fighting corporate control or utility accountability. It includes really important things like can the utility uh charge its lobbying costs to consumers on their utility bill or do they have to pay it for it out of their shareholder funds? Um do utilities have to file resource plans that are approved by the state commission? Uh is there a what's called a right of first refusal policy, which is actually steadily common across the Midwest where utilities that build new transmission infrastructure, the state law actually favors them in being able to own it and profit from it. Um uh frankly in contravention of federal law. Um So we try to cover the breadth of what we see as uh these policies. And like I said, we update it every year. We do have an update coming out for uh the scorecard in the fall of this year, probably around September, October-ish. Um and we'll be continuing to add policies to it as well as to strengthen the the way that we measure the policies to better capture where states are doing this effectively. Um I think I already covered this. Got ahead of myself. So eight policies around building local power. Um I'll let folks look at that more detail if they're interested. Um and then we have these 10 policies uh for uh holding monopoly utilities accountable and ensuring that they're, you know, have reasonable restrictions on disconnections, that they're not able to charge things like charitable contributions and trade association fees and lobbying to consumers. Um And like I said before, you can see uh comparison on the map. So if you wanted to see, does my state prohibit utilities from recovering their lobbying costs? You can click that. You can see that Maine fortunately is one of the states that do have that restriction. Uh if you wanted to look at community solar policies, you can see here all of the states that have them and their relative score. And then control down and learn more about why it is that I also I felt like those scores were justified. Um once again, if you want to find it on our website, freely available community power map, give it a Google. Pop in that URL, you'll find it. Um and so one of the things I just wanted to flag really quick is that uh you know, I'm delighted to engage in further conversation with you about how this scorecard would be useful for you to can pick about like what is it that you want to work on. So, I just arbitrarily picked something here that Maine currently doesn't get points for on the scorecard, which is the ability for cities to negotiate franchise agreements with utility companies. I have a few podcasts about this. Uh Minneapolis, San Diego, uh Boulder, Colorado have all used those franchise negotiations to their advantage uh in driving the utility to be doing more favorable clean energy policy. Uh recent the interview that I published this uh spring with Sean Elo Rivera from uh the city council in San Diego, he talked about how they won a low-income solar program that's paid for out of the utility shareholder money, and not something that gets charged back to utility rate payers. Um so it's really it's it's become a very useful tool for cities that want to get more leverage about over their energy future, but may might not have access to some of the other kinds of policies that would allow them to do that like community choice energy. Um it can also uh another one would be around disconnection policy. I also just really quick in Maine's score on disconnection policy is sort of in the middle. Uh we have some model policies that talk about, you know, do the disconnection preventions uh uh does disconnection prevention apply year-round as opposed to seasonally? Does it apply to everybody uh that's low income? Is it easy to qualify if you're a low-income person? So, a lot of different ways that um Maine could improve its score, and we really try to have a wrap-around service in terms of explaining why we give the scores that we do and how states can boost those scores with model policies that they could use. So, that's the scorecard. Like I said, happy to talk more about that. Can talk at a very high level about like what do these policies look like if people want to dive really deep on community choice energy for example as we were talking about before we got started. I'm happy to do that as well. I have a lot of thoughts about how that's been implemented. And I actually did write a report back in 2020 on that if folks want to see a little bit more of kind of like what the um what the situation was at that time. Um the other tool though that I wanted to talk about is what we call our local energy policy toolkit. We recently republished this within the last 6 months. And the idea was uh to talk about what are ways that cities can leverage their authority. Uh so, the franchise power that I just talked about was one of them. Most states, probably about 40 states, uh do allow cities to have that negotiating power. But, the idea behind the toolkit was kind of talk about what are the breadth of things that cities can do to leverage their authority. And it's not about go get a grant and like swap out light bulbs. It's more like what power does the city have legally in order to uh accomplish uh change over its energy system. So, one of the examples that we cover in the toolkit is raising community funds for community energy projects. And we highlight cities and I've often interviewed leaders from these cities about uh they've implemented taxes uh via like the franchise contract that are on utility bills or they've done them on high income earners or done them on big corporations to give examples from Portland and from Seattle. And they've poured those money into those those funds into clean energy projects that are benefiting the community. Sometimes designed around helping low-income communities in particular. Other times it's just trying to advance clean energy deployment within their communities. Minneapolis has a pretty interesting green cost share program that is does a partial matching grant for both um uh like low-income households as well as small businesses to help them deploy clean energy. So, just a really cool example and we try to give uh voice to some of the the folks who have led those programs to talk more about how did they get them in place, how did they structure the taxes, etc. It would obviously require uh cities to have some sort of local taxing authority, hopefully beyond property taxes, uh but that's one of the tools that's out there that we try to cover. Um And like I said before, we really try to give voice to the folks who have implemented these, so I have an interview with Patrick Hanlon who is the director of environmental programs in the Minneapolis Health Department. He can He talks kind of like about how did we stand this program up? How does it work? What's the impact of it? He's actually terrific. He has a amazing dashboard on the City of Minneapolis website that talks specifically about here's the money that we have spent, here's the private funds that we've leveraged, here's the greenhouse gas emissions reductions that we've gotten from it, here are the bill savings that we've gotten from the participating homes and businesses. Um he's done a really great job, I think a model of how we can demonstrate how public money is doing good work. Um We also uh and then on the topic of franchise authority in the toolkit, there's also a map where you can see where the franchise authority resides, so you can see all the states in orange, which does not include Maine, uh have allow cities to have these negotiations. It actually kind of is in some ways like a legacy of over 100 years ago before utilities had monopoly service territories, cities actually did decide who was going to be the utility provider or providers, sometimes they had multiple, and that was the a decision made at the local level. These days that authority is not as broad as that, you can't kick out your utility provider, for example, in Minnesota, where we have state laws that give that uh monopoly uh or designate that monopoly provider, but you do have the control over the use of public right-of-way, and that's where this negotiation can be fairly fairly interesting. Um this is that example I mentioned before with Council Member Sean Elo Rivera uh in episode 265 of Local Energy Rules. He talked more about the franchise authority. Um there's a lot more in in the toolkit than this. I just wanted to highlight one of the particular topics and give you a sense of how we try to both uh talk about the policy broadly, give examples of where it's happening across the country, explain how it works, and then actually interview people who were involved in the negotiating process or in the implementation. So, that if you want to really understand how it works, you can do that. I would also say that anybody who's been a guest on my podcast, when I've said, "Hey, do you mind if I connect you to people who might want to know more about this?" They've said, "Yes, absolutely." So, if you listen to a podcast or see someone that I've talked to, and you're like, "Hey, it would really be helpful for us doing this policy work to talk to this person." I'm more than happy to make that connection. Uh and people have always been uh really interested in being helpful. Um I just want to note that about the toolkit and about some of these local solutions, we actually have a webinar coming up on Thursday, June 4th. Uh Sean Elo Rivera from San Diego is going to be on it. Katie Cashman, who is a Minneapolis City Council Member through our recent franchise negotiation, uh who also had a lot of le- showed a lot of leadership around the local funding uh that I mentioned has been been done in Minneapolis. And then, Joshua Cox was a partner in developing community solar and a community-based solar projects for the um uh it's called the New York New Orleans Community Lighthouse Project. Um so, I interviewed him about that project. I would It's a really amazing uh project in which the city at least got some of the funding for it by a settlement agreement with Entergy, which is a terribly acting you to investor and utility and had done a lot of terrible things. And they gave that money or used that money to build solar and energy storage projects on places of worship around New Orleans. I think they're up to at least a dozen now with hopes of doing quite a few more. And then the city is actually partnering with those uh institutions so that in uh in terms of disaster preparedness the idea is that those places will have energy after a disaster because they have the solar and storage arrays. And then the city is actually working with them and saying, "Hey, we'd like to be able to stage disaster relief supplies at those locations knowing that they'll have power." So it becomes this really cool thing where they're connecting with and supporting community institutions and building resilience and lowering their bills. And then those community institutions are in turn supporting the the city's public disaster response. So really cool stories there of how those things can intersect when the city is able to exercise some of that power and authority. Um I think I'm going to stop there. I guess well, I'll say one more thing. Uh we also coordinate a national network of uh public power advocates. So Seth Berry and others from the Our Power and the Pine Tree Power effort have been on those calls and sort of like founding members. Um Uh it is a network now of over 50 people who mostly are have joined because they have been involved in a public power campaign somewhere. Uh we actually published a handbook of the public power handbook that we consider to be sort of the collective wisdom of the that group of people who is experienced going through public power campaigns. Um I've interviewed a number of those folks for my podcast uh including a six-part series that we did on well, had it it was sort of a punny name with lots of peas. I can't remember exactly. So like the the uh uh pitfalls or perils of of publicly owned power and it talked about the struggle of of trying to do that. But again, it's an open network. So if folks are really interested in public power, I can connect you with my colleague Ingrid. We have monthly calls. We do like learning sessions with folks who are advancing public ownership in various ways as well as have a networking opportunity where people can connect with one another and just try to learn like, "Hey, you know, I'm trying to set up a public power campaign. Where do I get started?" Um so that's another thing that we try to do is act as a connector with folks who are trying to work on those similar elements of energy democracy. So now I really will leave it there because I'm mostly interested in questions and conversation. This is just a little bit about how uh we work. We talk about the vision. We talk about the tools and the rules that need to change to get us to thriving, self-reliant clean energy communities. And I think I've already talked about all these different things that we publish or do, but happy to talk about more. Thanks so much. >> Amazing. Thank you, John, so much. And as mentioned at the beginning, we're we're still recording. So but we're a small group. So folks want to use the raise hand function or ask direct questions, that's great. If you're not comfortable, you can put it in the chat and I'm happy to read those off also. Cat, we'll start with you. >> Sure. Hi, John. Thanks for the presentation. It's quite mind-boggling in a certain way. When you talk about locally owned power, the Our Power effort was more about taking over the companies, you know. How do you see this working symbiotically with the utility companies who are going to always block any type of legislation or effort by the populace to lower our rates even though they don't lose any money by us not using their electricity because of decoupling, revenue decoupling. So, they're guaranteed their income. Like my energy bill this month and they raised my operating costs $5, which doesn't seem like much, but when they keep doing it, you know, it adds up. My electric usage was $25. My operating and distribution costs were $50. So, I'm paying $75 for $25 worth of electricity. So. I mean, it seems like a running uphill a Sisyphus thing, you know, where we go ahead and get green and we go off grid and then we still get slapped with the bill. So. >> Yeah. I mean, there's there is like a master's thesis in response to this. I'm going to do my best to give you a summary. Um one of the things that we work on a lot and is the sort of broader focus on the monopoly power of utilities. So, I wrote a report and I, you know, the three-page executive summary is probably enough for most folks uh a couple years ago called Upcharge in which I talk about this particular issue. And it applies it really the rules are the the the understanding from that research kind of applies regardless of your utility has decoupling or not, regardless of your utility is in a restructured state as in owns power plants or not. You know, Minnesota, we have a vertically integrated utility. They own the meter on my house, the wires in my alley, the transformers at the substation and the power plants, all of it. Uh in a lot of states that restructuring and I can never remember exactly which states are which, but uh in a lot of states they sold off the power plants and you might have uh retail competition for providers, but the distribution utility that provide, you know, moves the electricity on the local wires is the same. And their profit incentive hasn't changed even through that restructuring process. All utilities are the same. And this is actually the part that I found really confusing when I started doing this research, but those utilities make money by building infrastructure. It's not I mean decoupling helps in terms of like leveling out the variation in their income from year to year and potentially makes them indifferent to energy efficiency measures from the standpoint of sales, but really the way they make their money is by rec- recouping uh you know, a regulatory set rate of return on their capital investments. So, even if their income is held steady from by decoupling, you doing great green things and producing your own energy and reducing your energy use means that they have to forego making capital investments in new stuff, whether that's bigger transformers to beat greater energy demand uh and or you know, or if the utility owns power plants, uh you know, building more power plants. And so, unfortunately, the truth is we're always going to be fighting with them uh or when it comes when we talk about local energy, no matter how we talk about it, whether it's about ownership or whether it's about building things in our communities that serve our community needs, we are always going to be in tension with that. And the tension is really high in part because utility profits are like the rate of return they earn is still ridiculous. You might have started to see there's been gratefully a lot of national news about this lately because the higher costs are finally driving people to look into it. And my organization and others have been out there saying, "Yeah, and it's like ridiculous." I mean, this is a mostly guaranteed investment for them thanks to state commissions, and they earn like a 10% return on it. And God help me if I could figure out a way to put my retirement account into something that earned a return like that. Um maybe I should just buy utility stocks. So, that I hopefully was a shorter answer than a master's thesis, but still helpful in understanding like we're never going to not be in conflict with utilities over this. The for-profit ones because the fundamental way that they make their money is earning very excessive profits on capital investments in infrastructure. And so if we want the grid to be more efficient, if we want to produce energy locally, if we want someone else to own it that's not making a huge profit, all of those things are going to be in tension with how they make their money. >> Ted, did you have a follow-up? You're you're on mute. >> Yeah, I'm sorry. I do it automatically cuz I have dogs and they erupt at any given moment. Um have you heard of uh customer-centric I can't read my own tab. The customer-centric grid. I was watching or listening to a Volt podcast and I'll put it in the chat. Uh with Bruce Um Northum. Have you heard of him? >> The name is familiar. Um I haven't listened to that podcast though or or followed up to know >> Well, he's >> it. >> He's discussing uh pricing Let's see if I can find it. Price-based demand flexibility. In other words, setting up price server, which there is open-source software to do this. And um and creating your own exchange, your own ISO, I guess, you know, kind of sort of. And that would allow you to work behind the meter and aggregate generation from ratepayers rather than and getting paid a direct return rather than through the whole credit um you know, net energy billing type system where the utilities are actually making money being accountants basically and sending you a bill for things. This would be something that would be separate from that. So, I think Did I stick it in the Don't think I did. Anyway, it's really worth a look because I My background is in computer technology and I've always wondered why someone hasn't developed an a a free for use uh software that would allow you to basically do with electricity like people do with day trading. You know, because you would be able to see all of the members of your software application and you could see what they were charging on the fly for energy and you could either sell, you know, okay, I have this much energy that I'm generating I can sell you that right now and or I can buy my electricity from somebody who's super cheap. So, to me this concept is groundbreaking. So, of course it'll be you know, it'll be poo-pooed and oh, you can't do that and you know, you're too stupid to do stuff like that because the utilities pretty much want a stranglehold on us, you know, so and I don't blame them because it's a rigged game and they make a lot of money at it, so uh >> I I've heard a little bit about this and I will say that I I like that you made the comparison to day trading because the thing I worry Well, I shouldn't say I'm worried about it. Yes, we should have more transparent pricing of the value of energy on the system and just as an example like we know, the fundamental policy for getting distributed solar on the grid forever has been net metering and that was basically because the equipment we had on the grid at the time people started putting solar um didn't allow you to do anything else. The mechanical meter either went forward or it went backward and so net metering was a policy designed around what the technology was that we had attached to our homes. And it doesn't really capture anything more precise than the commodity energy value. And as we know, if if any if any of you spend any amount of time studying how the grid works and how what drives the cost of it, it's usually about peak demand. Uh and like distribution and that can be a peak that's local like, "Oh, my local substation that serves my neighborhood is over capacity." Or it could be broadly across the whole grid. We need you know, for 3 hours of the year, we need like 600 megawatts of energy and the rest of the year we only need 500, right? And having pricing and having transparency about how the grid costs work, I think it's super important. So, conceptually I'm 100% behind this idea. My concern about something like pricing at the consumer level is just that most people don't have the time or knowledge to manage it themselves. Like if there's a way to automate it, like I can sign up with somebody else who will help me capture that benefit, maybe be able to put my thermostat on a schedule or my car charger on a schedule, etc. I think that's really exciting if those if there's easy ways to make that accessible. But my concern is yeah. >> That's what this is doing. It's automating DER. So, you can set it and forget it, you know. But there are ways that you can keep tweaking it, you know. And so it I think I believe I'm like this is super new to me. So, I haven't really done a lot of research into it. I thought I'd put it in your ear because, you know, uh ILSR, you know, is interested in local you know, building the economy as well as having energy democracy. So, to me, this is about as democratic as you can get, you know, putting it right literally into the hands of the people. And you know, I'm not talking so much about a a global scale, but a regional or community scale, you know, where you could share power between your community CCA, you know, or policy's on on there somewhere, uh and um and also create your own virtual power plant so that you could share energy back and forth between your neighbors. So, it wouldn't just be you with your own standalone battery and solar panels, which is what I have, but you would actually be aggregating, you know, and building out organically, you know, adding people into what would essentially be like a member-owned power plant or kind of backdooring away from the grid. You'd still use the wires and poles, you know, for facades, so you'd still be probably charged distribution, and I'm not quite sure how that would work, you know. But but yeah, but the software's out there. It's getting developed, so. >> The only The only the from a policy design, not a technical perspective, the only other lesson I've learned over the years about pricing is if people are going to make this investment themselves or if it's going to be a commercial investment, it's just going to be like a grid-connected thing, not something goes on a particular home or business, um to get a bank loan, you need some sense of certainty of how much you're going to get paid. And so, when you design this pricing system, it's also important to keep in mind that if if you're just saying this is the prices are out there and we're going to know them, you know, in real time, but we can't tell you what they're going to be a month from now, a year from now, 2 years from now, it would be really hard for people to be able to put together the money to build the things that would be useful in our communities. And so, that's kind of the trade-off I've seen with how accurate the pricing is is that we also have to give people some runway to make the investments. Anyway, sorry, I know we get the nerd level turned up a little bit here. Um but thank you, Cat. I really appreciate it. I'll give that podcast a listen. >> Okay, no problem. >> Um I don't know who popped up first, but I see Gary and Becky. >> I think Gary. >> Uh um thanks, Matt. Uh my question for you, John, is um whether you have examples of what other states have done in um developing publicly owned power supply and um you know, we we know in Maine that uh a consumer owned utility uh failed and it's not going to be coming back up anytime soon, but the idea of having um publicly owned power generating uh facilities seems to be something that we might explore, and I I wonder if you have any examples of where that's been successful. >> Um not probably in the way that you're hoping. So, in terms of doing it at like large scale, New York has their Build Public Renewables Act. I am not aware that it has actually resulted in the building of projects yet, but it has created this sort of financing structure for that to happen. Um and there are some terrific people like Jason Kowalski from the Public Renewables project who you could talk to to get more detail about kind of like how that was designed and how it can work. Um And he also has some really good insight into like the financing mechanisms that you can use for that. So, I haven't I haven't I mean And then sort of on the other far side of it, there's like, "Well, 100 years ago in the New Deal, they built lots of things with the Works Progress Administration and creating the various federal authorities that have done power construction, and you still have those, like the Tennessee Valley Authority." Although, as if you're a podcast listener of mine, you know that I'm fairly critical and have interviewed people fairly critical of the local accountability of those structures, uh which is always my concern about uh when you scale it up too big. Um there are of course on the other end there are cities that have done publicly owned renewables on their own property, but there's not a lot that fills that gap of like publicly owned renewables not like financed for sort of broader grid benefit. I don't you know, sort of as like merchant power plants I guess for lack of a better term uh, that I'm aware of. It's definitely a developing area the I think the IRA was meant to open that up a little bit more by making the tax credits more accessible for non-taxable entities. It's some of which is still accessible through like third-party ownership structures, so no longer as direct as it might have been unfortunately. Um, but it's it's definitely possible. I've heard more about it. I know there are quite a few bills being considered in California for doing something like that. Um, I haven't followed them all super closely, but I'm sure I could find someone there that I could connect you with if you're interested in that. Um, but Jason Kowalski would be a terrific contact on on that piece cuz that's basically what his work is right now is focusing on that idea of leveraging low-cost public financing to do renewables. >> W- Where is Jason Kowalski? >> It's called the Public Renewables Project. But if you just send me an email, I'm happy to make the connection, Gary. >> Okay. Thank you. >> Hey, Beth. >> Um, thanks, John. I I joined late, I'm sorry. I'm really glad you to see you here and um, I wanted to just like two things. One, um, I live in I live where a municipal power company is and so I think I'm wondering if we could begin this sort of process with a municipal power company. I have, you know, I I would love to see what Cat was suggesting. There are a number of us who have, you know, solar backup batteries or solar and backup batteries who, you know, are um, costing our grid, as they say, because of our peak, you know, the peak load at sunset. And um and and it if the wind's not blowing, which is not that often out here, but cuz we have windmills on North on North Haven. So, North Haven violent Haven has wind and then many of us have solar, but it seems as though there would be you know, a large number of people who would be wanting to participate in an in and out of our batteries, you know, for um you know, providing solar during the time of of um peak loading and I you know, I don't know exactly how that would work and I'm you know, I'm not professional about that, but I think that that might be a place to get started. So, um and then the second thing I was thinking as you're talking about this idea, Cat's idea and you know, kind of how we could kind of get around um or at least find some financing for this. Do you know about resource generation? Um which is not about energy generation. It's about capital generation and it's young wealthy people who are looking at progressive ways of dealing with the economy and they actually have another um and I don't know the name of it that they've just just started that's for people over 30 that are in the 30 to 50 range who are looking at alternative ways of investing in a more um viable and you know, uh democratic economy, uh socially democratic economy. And I just wonder, I mean, if have you ever heard of those that group or particular? No, okay. Well, um I will I had have a friend who's involved with them and I will sort of connect you to them, but also you, Cat, to them and maybe it'll be kind of an interesting thing to see if there's a way to gen up some you know, capital for a for projects to see if there's a way that we can get around this stranglehold that the utilities have on on on the that financing. Cuz that's a just ridiculous amount of money that they, you know, are sucking out of everybody's pockets and not caring about, you know, what's happening to, you know, people who can't ill afford increased costs. So, um anyway, I'll pass that on to you. But, I'd love to know if there's something you could tell me our local utility, like our municipal, you know, little municipal power company, where we were supposed to get a municipal battery in the, you know, in the IRA, we were supposed to get a big battery that we would then become generators. Um so, that that our those of us on the island would then not be feeling guilty about our solar at between 5:00 and 8:00 at night and uh and um we would actually be, you know, putting power into the grid. So, I'm hoping that we actually get that that that that set of batteries. I don't know if that funding has come through yet or not, but anyway. Um but, if there's another way to do that with munis, it might be I don't know, what do you think about munis? >> Yeah. Let me actually I want to do one follow-up on the resource generation thing, which is I've seen a couple of proposals and I think the Pennsylvania governor actually was talking about this specifically and I think there's now legislation supporting it. The concept is called competitive direct equity and the idea is that utilities will say, "Oh, we want to build this new power plant." And then they'll say, "We're going to use our equity from our shareholders and we want to earn a 10% return on it." And what intriguingly could happen is that the utility commissioner or the legislature could say, "Well, yes, you can get approval for that power plant and yes, you can get approval to raise $500 million for it, but you actually have to go out and bid, take bids for who's willing to provide $500 million at what the lowest possible equity return that they'd be willing to accept. And I think it would be a really interesting way to undercut the ridiculously high rates that they've been getting. So, if you have wealthy people that, I mean, are in the like tens of millions of dollars bucket who wanted to invest, that's a potentially interesting marriage of reform of the utility like equity structure um and that that we're starting to see some legislators uh get interested in. Uh a lot um so that'll be an interesting combo. But then to get back to your muni question, >> Yeah. >> um two things came to mind. One is the New Hampshire Electric Co-op uh is has what they call transactive I think it's transactive pricing. So they've they are similar in scale to uh you know, municipal utility. I interviewed their general manager for a podcast a couple years ago. But the idea was essentially we they wanted to figure out how do we value things that our customers produce and pay them when those happen. Not just through things like solar with a net metering policy, but you know, if they have an EV charger, if they're willing to not charge at certain times, or maybe with vehicle-to-grid. That's vehicle-to-grid was the technical concept that they were interested in supporting through that. So I definitely follow up and and see where they're at in that development. >> Yeah. >> Um the second really I think powerful place for a municipal and any small utility uh that doesn't own its own transmission is that usually they're getting some amount of wholesale power from someone else on a contract. They're not producing it themselves. And usually that is structured kind of like a commercial business's electric bill, which is to say there's an energy charge and then there's a demand charge. >> Right. >> And so if a utility builds that battery, for example, or gets its customers to build the batteries for them, and then has some control over them and can lower their peak demand, that can save them a lot of money on those wholesale contracts. So there's a really powerful connection and that is very local, where that utility is having to pay these demand charges to a larger wholesale supplier. Um there's a utility in Minnesota called Connexus, and I think a few others actually. They're all part of a broader whole like co-op wholesale arrangement, but they've specifically been deploying batteries to lower their demand charges. Um I don't know if they've done uh stuff where they're incentivizing consumers to do that, but they've definitely been building batteries within the local territory to support that. Um and also I do have to say I I haven't found a lot of utility managers being very creative thinking like, "Hey, our customers have done solar. Instead of bitching about them putting up solar, maybe we should figure out how to make it more useful by putting up the batteries ourselves." So, to your point, hopefully your utility does that and recognizes like, "Hey, this is a chance for us to like time shift that solar our customers hopefully installed for us and make it more useful." But, I think the demand charge link there can be a powerful economic driver for those local utilities. >> Absolutely. I mean, I'm just going to say our our our peak power is charged to us at 14 or to 18 cents per kilowatt hour, whereas what I get paid back is two. If we you know, what do we get two cents per kilowatt hour for the excess power during the you know, not during the peak time. So, it's it's you know, it's it's it's very onerous for a little utility, but they actually we do have a fairly progressive manager. So, it's it's exciting that we're looking at that, but I you know, I just wanted to see if there's any other suggestions. Thank you so much. >> Yeah, you're welcome. >> Um policy, was your hand up? >> Yeah, it was. Yeah. Uh so, CCAs, community choice aggregation. Um Maine has had that um authorizing legislation around since 1999. And there were two major problems with it. One was that it was an opt-out process. I mean, opt-in process, sorry. And uh the other was that the utilities had veto power. So, now uh in the legislation legislature that just come finished, there was a bill to correct those along with a bunch of other things. That's why I was asking Gary about LD 2112, which passed and the governor did sign. And so, CCAs are on a whole new footing now here in Maine. And there is a small group of volunteer activists that are, you know, working to kind of roll that out, looking at what, you know, what's the next step for that. And we've started working with Paul Fenn. I don't know if you know about know Paul Do you know Paul Fenn? Okay. >> Yeah. >> Author of CCA 3.0. So, he's started to work with us. I mean, there was a great webinar. I think it was just last week that the national CCA organization put on. And I'm pretty sure it was recorded. So, I I'll look and see if I can find the link for that, which compared the different models of CCA, CCA 1.0, which is the broker model. You you know, you can hire a broker to come in and and set it up for you. CCA 2.0, which is what's being rolled out in New Hampshire now, which is basically the joint powers authority and the New Hampshire, what is it called? Community Power Coalition of New Hampshire has like 75 cities and towns and municipalities across New Hampshire, which are all part of that coalition. And then there's the 3.0. So, this is a learning curve that we're kind of on right now. And I'm just curious to hear your thoughts about that, John, because when I listen to Paul Fenn, he sounds a lot like you. In terms of what he's saying about the CCA 3.0 model. And, you know, there are 8 to 10 um areas in Maine municipalities, some are in more than municipalities. This is following up to what Becky was saying, where there are municipal owned utilities, but obviously the majority of cities and towns are under either Versant or CMP. And I think that CCA can be a real step towards um towards more local control and local power and more renewable generation uh because it does give the municipality, you know, the the authority to be the one who buys their power, where it comes from, and returns any profits again to the users. So, curious about your thoughts about that. >> Yeah, um I have lots of thoughts about community choice. I'll I'll hold myself to the two things that have been challenging for CCAs to like fill up full So, I think the full vision. One is you don't buy the distribution grid, and unfortunately that's where a lot of the interesting things with distributed energy come in about like how could you for example, like if we deployed lots of distributed energy resources and we managed them well, like with virtual power plants for example, could we reduce the otherwise heavy capital expenditures the utilities would make in the distribution grid? You can procure those things through a CCA, but you can't make sure that the utility actually uses them in a way that reduces distribution grid costs. So, that would be one component that I would say knowing that thinking through like is there a way to connect local procure to then actually getting their utility to have to reduce distribution grid expenditures cuz that will otherwise just be a pass-through from your incumbent utility, and they have no incentive to make that cheaper um under the current structure. The other one, and this is kind of related, is I you know, I'm I'm thinking of specifically about Illinois where most of the CCAs that were operating have since shuttered uh cuz they were mostly under that sort of broker model. And and what they also were doing was they they basic Oh, and and this also think of the one in in Westchester, New York. They were essentially going out for bid on short-term contracts into the wholesale market to see what they could get. And certainly having the buying power to go negotiate that and having a mission-driven approach meant that they were often finding cheaper electricity and sometimes even with more renewable content, although a lot of times that was through buying renewable energy credits, which is not in and tightly linked to actually like climate progress as we might like. Um the thing that I think is the unlock here is long-term procurement contracts. Can you sign a contract to procure power over 5 or 10 years as opposed to like 2 years? And that will connect back to that thing I said earlier about, you know, are things financeable? Somebody's not going to build you a new solar or wind project if you can only sign a 2-year contract. Right? They're going to they're going to they're going to take out a loan for 10 years and they're going to want to see the ability to pay that loan off. So, if you can get the ability through the design of the program to have those longer-term contracts, then you can actually start investing in stuff that will make a difference. Now, I had often thought of that largely as like how do you procure new renewables that they could be local, they could also not be local, but the whole idea was getting new additional renewables. On the other hand, if you were to there's a great report recently out by Rewiring America called Homegrown Energy. But it specifically talks about this how data centers could spend money to basically buy heat pumps and solar and batteries for consumers to offset their load. You could probably do something like that with a CCA and essentially say, "We're going to buy our power from our customers." without having to do long-term contracting, because the customer that is looking for a little help up front probably. And I'm sure that's kind of the design on like the Homegrown Energy project design was also in that model. So, that would be an intriguing way. uh I also I was actually right now engaged in doing a like a technical modeling study that would we don't have any results yet. We're like just at the very early stages. But hopefully within 6 months we'll be able to have some models that would show if you wanted to maximize local energy production, how would you do that and how would its cost compare to doing it sort of status quo? And hopefully because we don't think that that information is really out there. Usually people talk about distributed energy and they say like, oh well, if we just get a bunch of it, it'll do cool things. Uh but it we're not really thinking about communities from a like community boundary standpoint. And so we're going to hopefully have some more information that that we'll be able to share in 6 months or so. >> Mhm. So, John, do you think that CCAs um are a way of growing more uh local control over energy supply? I mean, do you see it as something that fits into what, you know, the ILSR's mission is? >> Absolutely. I mean, it's in our scorecard. We give we give states points for having it. Uh you're absolutely right about the opt-out and the veto power being problematic. We would have definitely deducted for those kinds of provisions since they make it unworkable. >> now. >> We're going to do that. I I wrote it down actually. I put a star next to it cuz I oh, my colleague's working on the scorecard right now. She's going to actually love having this information. So, yeah, I mean, to me it is absolutely in keeping with that idea of localizing energy decision making. And I mean, even in its 1.0 format, you're still at least being able to make that choice and you are also building knowledge of how the energy system works locally. Like you have to have somebody in your local government who now cares about energy procurement. Like there's a title, there's a job, etc. That matters. But you really do you're going to have to push people that are in that decision-making role to use it more robustly than just doing that short-term contracting cuz what we found in Illinois and now in New York is if you if if the market just the timing is bad for you, you can it it can fall completely fall apart. Like the fracked gas boom in the early 2010s undercut all of the energy savings that cities were getting in Illinois and they basically all shuttered their programs. Sustainable Westchester happened to go out to bid for its most recent contract right after the Ukraine war started. And energy prices spiked on the market, they had to they were now charging people a price premium and of course then all of the like social capital that went into building it was eroded because people were like, "Why am I paying more than if I was just a ConEd customer?" So. >> So, how do you prevent something like that? >> I don't have a great answer to that question off the top of my head. I think >> where we need to be thinking. >> Yes. Yeah, absolutely. >> nuts. >> I mean, if you if you are actually have more control over your energy resources in terms of procuring your own on long-term contracts, that's your insulation then from the broader market forces. The thing that killed Westchester and people in Illinois is that they had none of their own local resources. They were always going out to bid for all of it. So, you are a price taker at that point even though you have some leverage by, you know, aggregating as a community. The advantage an investor and utility has right now in a lot of places is they have contracts for power or their own energy resources that they're using so that they're less exposed to market conditions. So, I think that's it's an important thing to think through in that design of how you would do like when you stand up the program is how do you make sure that you're actually be able to do this in a way where you can, you know, build off of whatever security you've had. You know, maybe you just contract for the first 2 years or whatever amount of time with the incumbent utility. Uh because you know that they have a lot of that uh you know security built into their supply hopefully. I mean they've done it well. >> Just a FYI Paul says they're doing a pilot project in Ithaca, New York and they're pretty far along on it. I don't know if you guys are looking at that but you might want to >> Oh interesting. >> Yeah. Okay, I yield my time to Pat. >> Thank you Halsey. I just wanted to put in a quick thing because the data center that's proposed for Sanford unless Sanford blocks it is an AWS Center which is pretty resource intensive. The developer of that site owns the property is the developer for the data center and also owns his own electricity company which is called the Northern New England Electric Company. They misquoted it in the news as corporation and apparently that's a completely separate entity and has nothing to do with the data center development. But I found it odd that he could actually be his own utility even though he's claiming he's not a utility because then he would have to you know deal with the PUC and stuff. So he's looking at I guess having a dedicated power supply to the data center but they're calling it an energy park because they're adding other things besides the data center even though the data center would probably be their cash cow. But I don't even know how that would be structured. You know, how could somebody get away with that because that's what we should do Halsey is that you know, you create your own little networks like local area networks and and wide area networks only using electricity instead of technology. Well, using technology but you know what I mean. >> My my guess is how they're getting away getting away with it is the term that comes to mind cuz I'm guessing there's also going to be on-site fossil fuel generation as part of it, but >> Yeah. >> most most state regulation about who is a utility involves how many customers you serve. Like in Minnesota, we it's like if you don't serve 25 or more customers, you're not a utility. So if it's one facility in one place and you're the only customer, you then you have a different process. You don't have to go through the public utilities commission. Uh instead you have like air permits, water permits, local zoning, whatever. Like that's those are your limiting factors. So um Yeah, so that's that's how they're getting around this and there's probably examples of like factories or other things where they've built their own onsite generation. You know, hospitals for example often have backup generation on site. They're not a utility. Um of course they're not running the damn thing all the time and that's the problem with data centers is that they've they're going to build their own power generation and run it 24/7. Uh so yeah. >> And they're they're claiming to be developing hydrogen fuel cells, so they'll only be using 300 megawatts of natural gas for 5 years until they get those fuel cells up and running, but then 96% of all hydrogen created in the global arena is using natural gas. So I'm not really holding my breath for that. The other thing is your email address. I don't see it. Maybe Becky could send it to me or or Matt, somebody, you know, I didn't see it. >> Oh, John's put it in the chat. Yeah. >> That was >> Good good timing and yeah, I was just going to say we're we're right at time. So that's a good last message to have the email. Really appreciate you, John, and we'll we will most certainly be in touch, I'm sure some of us, but particularly on community choice aggregation and some other items. So really appreciate your time. >> Oh, my pleasure. It was great to talk to you. Loved the questions. Really appreciate your deep engagement in this and be happy to be involved further in brainstorming with you about all these thorny issues. >> Thank you, John. >> have your podcast queued up, John, so you'll be hearing from me. I'm going to listen to of podcast and take you up on that offer of oh, get a hold of me, you know, and you know, I'll be glad to help. You'll probably regret those words. >> Thank you. >> Thank you, John. >> Thanks so much, everyone. >> Thank you, John. >> Thank you, everyone. >> Good night, everybody. >> Bye. >> Good night. >> Thanks, everyone. >> Thank you, Corrine. >> Yes, you're welcome. Hi, Gary. Maybe Gary stepped away. Yeah. >> So, you were the host? >> Uh >> Or was Matt the host? >> Well, I I set it up. I got in touch with him. I said And um Jane >> the host cuz you're still on. >> No, yeah, I'm the host. Yes. Oh, I forgot I have to re-delete that. Sorry.