Movements

A key lesson for Governments and corporations is that they ignore community requests for change at their own peril. The stories I gathered all started with a reasonable request to deliver more low carbon energy, often numerous requests. Many ended after a long, hard fought battle over a decade, some battles are still ongoing or part of a larger war.

The key lessons for communities is that building the movement for change is likely to involve a long and at times intense process, the resourcing of which will be a challenge. The relationships and partnerships become an important part of sustaining the effort. The result is often a clear statement of the community’s values and there is no easy replacement for this work – it is part of being a democracy.

These decisions are made at a political level with entrenched interests lobbying politicians for change or protection of the status quo. On the community side of the equation, the voices are heard once they have built a movement – a critical mass of support. In many of the stories I gathered, it took to the removal of the current government before the changes were made, ie community exercising the most powerful weapon it has by voting for new representatives. In the USA and Germany, the politicians offered a direct vote on the issue to the community at which stage the community group has an influencing competition against corporate interests which can afford massive advertising campaigns.

Political change is only one of many change models and is an essential ingredient

[1][2]. Some interviewees had little insight into the influence of other actors within the system, placing undue faith in politicians to bring about the changes needed. There is no doubt that the cultural and political systems play an important role in determining the best combination of approaches that drive change and a short visit to each country is insufficient to understand these deeper factors.

Buying back the grid and community choice aggregation are both solutions that have been developed due to the lack of choice by customers and local governments as to where energy is sourced. Australia does not have a vertically integrated electricity market and has high levels of retail competition at the residential customer level.  These models don’t easily apply to Australia but they tell interesting stories about communities taking back control. However, models for local ownership and control will become more relevant if Australians start to move beyond the individual choice model that is well accepted at the moment and look for the efficiencies and benefits that can be gained at the neighbourhood scale.

Grid Buybacks

Boulder, Colorado and Berlin, Germany are both trying to buy back their electricity grids. Hamburg has recently been successful in creating community support and winning the vote for City Government to take over ownership of electricity, gas and district heating networks. Schonau in Germany’s south is the pioneer in this area, having won the right to own and operate the local grid almost two decades ago[3]. I have written about each of these interviews in the appendix and will highlight the following key points here:

  • Schonau went through a number of local votes, firstly to establish that a local proposal should be allowed to own and operate the grid and then with time to develop the skills and capacity needed to operate the system and become a genuine bidder (as EWS). The process has established an important principle that local councils can and should consider local benefits flowing from grid operations. The principle continues to be important today as Schonau bids to be the operator of other grids in the local region. One court case in the European court will see a council defend its tender criteria that the utility says preferences community providers like EWS over normal private businesses. Schonau have been innovators, in the way they engaged the local community and crowdfunded from all of Germany in the 90’s, in the local ownership model that has been established and in the commitment to support other communities globally.
  • Berlin didn’t quite reach the 50% support needed for local government ownership of the grid but continue to pursue the option of providing a community owned grid operator and bidding against private utilities for the franchise. The local government has slowed down on this process, leaving the community organisers to continue to sustain the effort without external resourcing and also to communicate with shareholders about the changing opportunities for the funds raised.
  • Berlin’s efforts inspired Matthias in Hamburg. If two, seemingly ordinary, young women could raise citizen support for bringing infrastructure into public ownership in Berlin then it seemed the most obvious thing to do in Hamburg. Through some clever targeting of “prisoners of the district heating system” and strategic use of the volunteer resources they had, they made great strides in the final weeks of the campaign and left the city Government in the unenviable position of buying back the grid – an outcome that hadn’t been anticipated. Energienetz Hamburg – the energy coop formed by the most vocal volunteers – see this as just the beginning. They are now focusing their resources on delivering renewable energy projects and continuing to speed up Hamburg’s energy transition.
  • Boulder is also in the midst of its process and has been battling for almost a decade. After a number of votes over many years the city government has finally put resources into the grid buyback process and created a team to work through the details. The citizens behind the original campaigns feel they still need to be active, appearing at Council meetings, watching the votes and deliberations of councilors, challenging the material from bureaucrats and the private utility. The community work is not complete yet. The efforts to bring the community along have been considerable and over many years experts have been invited along, research has been conducted and plenty of time to develop options and deliberate has been included in the process.

Each process has involved a cost for buying the grid and the price is often contested and inflated by the private operator –the only actor with detailed knowledge of the assets. Schonau went back to the community to fundraise the extra €1m that the utility insisted on and later had more than this amount awarded back to the company by the courts. Boulder have priced the asset a number of times, firstly under their own steam as a volunteer collective utilizing some of the excellent grid-knowledge skills that exist in the community. The local government is now more engaged in the process and is reassessing the financial information.

Community Choice Aggregation

Community Choice Aggregation (CCA) started as a concept in Massachusetts where it exists in law but appears not to be used because the market has become far more competitive. On the west coast in California vertically integrated utilities control the sources of electricity, using their own fossil-fuelled and nuclear power stations to provide energy to their customer base. Over a decade, California brought in an improved version of community choice aggregation. The state benefited from the key author of the Massachusetts Bill becoming heavily involved in Californian efforts and providing authorship and careful oversight of details during the many years of bringing the law into California. The CCA bill allows city and county governments to purchase wholesale electricity on behalf of all their residents (there is an opt out clause but the American market operates with over 95% of residential consumers buying from default providers). The private energy supplier is still in charge of the billing and the customer relationship.

Boulder considered advocating for CCA but decided it would take too long. CCA is sometimes considered ‘municipalisation lite’ because the city and county governments need to set up the institutions to manage the purchasing process but don’t need to build grid operating and retailing capacity. The setup process, even now when the legislative mechanisms are in place, requires time and money and community support.

CCA advocates are pushing for CCA to be adopted throughout California in all territory controlled by private operators (mainly Pacific Gas and Electric, PG&E). Los Angeles has always been under municipal control and a number of rural electricity cooperatives exist in the more rural counties. Marin County and Sonoma were pioneers and are gradually expanding their offerings to include local power and local innovation. A number of other counties have recently introduced CCAs. Improving the cost of power has been an important part of their offering, as well as providing cleaner power and choices for up to 100% green power.

There are a number of cautions amongst the rush to achieve this local mechanism. Community choice aggregators claim to provide cheaper and lower carbon energy. The main reason this is possible is that cheap gas has been available and the incumbent utilities have not been positioned to exploit these cheaper offerings. This is not a sustainable basis for affordability.  There are cautions about how green the CCA offerings really are – some rely on existing ‘old’ hydro power and advocates argue that buying this form of renewable energy does nothing to speed the energy transition to a low carbon grid. The most important caution is around who is served by the move to CCA offerings. Energy Democracy advocates see increased local ownership and renewable energy as a good thing, only if it serves the whole community and particularly the most disadvantaged within the community.

The incumbent utility is also pushing back. It is claiming opt out charges to cover its sunk costs in power stations that are no longer being as well used. This will be tested at the legal level and involve the state utilities commission and potentially the courts. In February 2016 PG&E launched a community solar scheme where customers can pay a premium for solar power. Although the company claims it will not compete with CCAs, more consumer-led offerings might reduce the community support for energy system takeovers.

Municipal Owned Utilities without the movement

The municipal owned model has happened in various places without the community-led battle. Burlington, Vermont and many of the Danish district heating networks are simply following the traditional approach in those places and have stayed away from opportunities to sell up assets and privatise networks.

In the UK the town of Woking is famous for starting its own energy company in 1999. This allowed it to add generating assets (particularly combined heat and power) and to invest in energy efficiency. Local Government often owns public housing in the UK so its ability to deliver energy services allowed Woking to also address fuel poverty. In some cases the company duplicated the electricity grid in order to access cheaper energy and operate outside the constraints of the electricity market.

In Manchester the local energy network has been advocating for Greater Manchester Council to look at municipal energy. Bristol will be the modern test case, having recently started its own utility driven by the city council. In contrast to community-led initiatives, this has been well funded and has the resources and commitment of the Council to help make it a success.

[1] Pathways for Change offers 10 different models from policy windows of opportunity through to grassroots community organising. I had been thinking about ‘socio-technical transitions’ and met with various academics.

[2] Kingdon talks about the necessary confluence of a problem, a practical solution and the political will in his book, ‘agendas, alternatives and public policies’

[3] Germany is credited with having the energy aware and politically liberal citizens for grid buybacks. ‘Since 2007 60 municipal utilities have been formed and 170 communities have tried to purchase pieces of the energy grid back from private providers’ http://energytransition.de/2014/06/remunicipalization-of-hamburg-grid/

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