In 2017, Montgomery County declared a climate emergency and pledged to reduce greenhouse gas emissions by 80 percent by 2027 and 100 percent by 2035. This is a daunting but scientifically necessary goal. To achieve it, Maryland must pass legislation that gives local governments more control over policies that can lead to drastic reductions.
To enable local governments to have more control over the fuel sources that power their local electricity, we have come together to push for legislation that will allow localities the right to purchase and generate electricity for their residents and businesses by creating a community choice aggregator. This innovative policy solution puts power in the hands of communities to negotiate better prices with energy providers, allowing municipalities to generate and sell more affordable clean, renewable electricity directly to their residents.
Originally conceived as a response to the deregulation of the electric power industry in the 1990s, community choice aggregation has evolved to focus on two main policy objectives: lower rates for consumers and a higher level of renewable electricity generation. Creation of a local electricity aggregator would allow residents in a community to take control of the electricity purchased by their local utility, while leaving ownership of power plants and the grid in the hands of utilities. In essence, an aggregator is a sort of hybrid between an investor-owned utility and a municipal utility.
Eighteen states, including Maryland, have some form of a deregulated electricity market, but only eight states authorize local governments to establish community choice aggregators. Yet, unlike programs in deregulated states that simply allow an individual ratepayer to arrange to buy renewable electricity from a third-party provider or more traditional green purchasing programs run by utilities, community choice aggregators can supply renewable electricity to a large majority of a locality’s residents. Whereas traditional programs may have a penetration rate of about 2 percent of ratepayers, an aggregator can have participation rates of more than 80 percent.
The dual role of aggregators as both lowering rates and providing for more renewable electricity is seen in the history of the first aggregator established in the nation. The Cape Light Compact was established in Massachusetts in 1997 with a focus on lowering rates for its customers. From its beginning, the compact included a focus on energy efficiency along with its role as the aggregate purchaser of electricity. A decade after it was founded, the compact helped create the Cape and Vineyard Electric Cooperative, which was focused on renewable electricity generation.
Across the country, cities are using their authority to create community choice aggregators to drive the transition to 100 percent renewable electricity. In recent months New Brunswick, N.J., and San Diego announced plans to set up locally controlled aggregators to achieve 100 percent renewable electricity more quickly than their states’ renewable portfolio standards.
The legislation before the Maryland General Assembly would give all Maryland localities the power to pursue cleaner, cheaper electricity for their residents. The legislation also would explicitly allow local ownership of electrical generation, giving counties such as Montgomery the authority to own our own solar farms and community solar gardens.
We only have a few years to act before the worst effects of climate change become unavoidable. Localities need the authority to take the lead in this fight while Washington remains paralyzed by inaction. The legislature should pass this legislation so we can get on with the work of transitioning to clean renewable energy for all our residents.