How Utah cities are pursuing 100% renewable energy
Fri, 11/20/2020 – 01:00
In the absence of federal action on climate change in the United States, local communities have taken on the responsibility of reducing their greenhouse emissions.
To date, more than 150 cities, counties and states across America have passed resolutions to commit to 100 percent net-renewable electricity in the coming years, defined as meeting the city’s total electricity demand with the gross amount of electricity generated and purchased from renewable sources, such as solar, wind and geothermal as well as energy efficiency, demand management and energy storage. Six cities already have achieved this goal: Kodiak Island, Alaska; Aspen, Colorado; Georgetown, Texas; Greensburg, Kansas; Rock Port, Missouri; and Burlington, Vermont.
In Utah, 23 cities and counties have resolved to adopt 100 percent net-renewable electricity by 2030, representing about 37 percent of Utah’s electricity load.
How did a politically conservative, coal-dependent state such as Utah achieve such a commitment? We recently published a study in the journal Sustainability (access is free) exploring how it began with Salt Lake City, Park City and Moab, the first Utah cities to enact 100 percent net-renewable electricity resolutions in 2016 and 2017. Through interviews with the key players involved and secondary sources, our research uncovered the initial key obstacles facing the cities’ renewable electricity goals and the strategies they have initiated to resolve them.
How did a politically conservative, coal-dependent state such as Utah achieve a 100% renewable energy commitment?
The biggest hurdle was convincing Rocky Mountain Power, their existing fossil-fuel-dependent utility monopoly, to develop and provide the communities with sufficient clean, renewable electricity resources — not renewable energy credits or supplies from existing sources — and to retire fossil-fuel assets. The other significant challenge was securing buy-in from all city residents and businesses to accept 100 percent net-renewable energy, especially given that the costs for the transition were unknown.
Would citizens voluntarily adopt renewable electricity under these circumstances, or would the cities have to mandate participation?
Engaging the utility
We found that the cities collaborated with each other (along with Summit County, which eventually passed its own resolution), each playing different roles to bring Rocky Mountain Power to the table. Salt Lake City Mayor Jackie Biskupski initiated talks with the utility, and with the help of State Representative Stephen Handy, negotiations resulted in landmark legislation, the Community Renewable Energy Act (CREA) of 2019, which authorized the utility to procure renewable electricity resources and create a renewable electricity bulk-purchase program for participating cities.
The Community Renewable Energy Act of 2019
Rocky Mountain Power required that the additional costs associated with procuring the renewable electricity would not increase rates for customers outside the program. Consequently, CREA stipulated that any new costs and benefits associated with renewable electricity procurement would be designated only to the cities receiving it.
CREA also set a deadline for other Utah cities to join the bulk purchase program, and this resulted in 23 Utah cities and counties in total coming forward to take the renewable electricity pledge. These additional cities and counties included some of Utah’s most populated, including Salt Lake County, West Valley City, West Jordan, Orem and Ogden, totaling about 37 percent of the state’s electricity load.
Finally, CREA specified that all participating cities’ residents and businesses would receive renewable electricity by default, with a provision for customers to have the opportunity to opt out if they so desired. Park City had found that automatic enrollment in its own WaterSmart conservation program resulted in very high participation rates among its citizens with few choosing to opt out.
Thus, the automatic enrollment provision was a critical component of CREA. Academic research suggests that people typically accept defaults as a social norm, so the expectation is that few Utahns may opt out of the renewable electricity program.
We argue that CREA may be a model for other cities and communities across the nation implementing 100 percent net-renewable electricity resolutions. Nevertheless, the next major challenge will be holding together Utah’s coalition of cities and counties in the coming years as the costs of the bulk renewable electricity program and its benefits to ratepayers become better understood and accepted.
Preventing the coalition from unraveling
In 2017, Salt Lake City-based Energy Strategies was commissioned by Park City, Salt Lake City and Summit County to evaluate various cost impacts for each community to achieve 100 percent net-renewable electricity. The studies concluded that electricity rates could be 9 percent to 14 percent higher ($15 to $17 increase in a typical resident’s monthly electricity bill) over the standard rate should the cities transition to 100 percent net-renewable electricity by 2032. This amounted to about $200 more per year.
In our study, officials of the small town of Moab in southern Utah expressed concerns about how these added costs could affect its town budget and residents of modest means. More recently, the city of Ogden announced that it is reconsidering its participation in CREA over fears of potential high costs and rate impacts on the city’s most vulnerable residents. Many cities in the coalition seek ways to offset implementation costs through third-party funding and grants as costs become better understood to minimize their impact on lower-income customers.
Rocky Mountain Power seeks renewable electricity sources to fulfill the needs of the bulk purchase program and is developing its own cost estimates that must be approved by the state’s Public Service Commission. While it is a fact that the final costs of CREA by 2030 remain unknown, it is also true that the cost of Rocky Mountain Power’s standard fossil-fuel rate in 10 years is also unknown. Consequently, cities participating in CREA are grappling with these risks.
Since the initial 2017 Energy Strategies’ cost studies, wind and solar prices have continued to fall, becoming increasingly cost-competitive with and in many circumstances, less expensive than traditional fossil-fuel electricity sources. Indeed, a key economic benefit of renewable electricity is its price stability because the “fuel” for wind and solar is free and not susceptible to the price volatility of the boom and bust cycles associated with fossil fuels.
By 2030, renewable electricity may be the most fiscally responsible, price stable and least risky electricity choice.
By contrast, fossil-fuel power plants face strong headwinds in the form of reduced subsidies and the prospect of carbon taxes. While the U.S. does not have a national carbon tax, 13 states do and several more are considering one. The forthcoming Biden administration already has signaled that it plans to cut federal subsidies for fossil fuels and will re-engage the U.S. in global efforts to protect the climate. In a world that is increasingly facing up to carbon emissions, fossil fuels are a risky and expensive bet.
In short, by 2030, renewable electricity may be the most fiscally responsible, price stable and least risky electricity choice.
Recent polling shows that Utahns want a stronger transition to cleaner energy and air. To date, CREA and its coalition of 23 Utah cities and counties representing 37 percent of the state’s electricity load is the state’s best opportunity to reduce the state’s greenhouse gas emissions substantially, given that the state of Utah does not have a mandated renewable energy portfolio standard (it does have a voluntary standard of 25 percent by 2025).
The challenge is keeping that impressive coalition of Utah cities and counties from unraveling before CREA’s costs and benefits are clearly understood vis-à-vis the future costs and expected emissions inherent with fossil fuel-generated electricity.
The Utah experiences profiled in our research provide insights about the hurdles facing the implementation of 100 percent net-renewable electricity and the strategies cities are using to engage them that may help other communities chart their own paths toward a cleaner future.
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