Power to the people propels US green energy transition

• Proponents say time has come for public utilities
• A dozen takeover drives underway
• New laws spread opportunity beyond private sector
• Cities, states and nonprofits jump aboard

WASHINGTON - A push for increased public ownership of electrical utilities and new opportunities for cities, states and nonprofits to get involved is helping propel a U.S. transition to green energy that puts local needs above private profits.

Interest in public power – its generation and distribution – has "exploded" in recent years, said Johanna Bozuwa, executive director with the Climate and Community Project think tank.

But it has also been hamstrung by the fact that U.S. incentives for renewable projects had primarily come through tax breaks, which were not open to government and non-profits.

Now, new "direct pay" rules finalized in March by the federal government will allow cities, states, non-profits, rural cooperatives and more to receive those incentives directly.

"That has really catalyzed a massive explosion of municipalities, cities, states really thinking about how they could become the engines for renewable deployment," Bozuwa told Context.

"What's revolutionary about direct pay is the public sector can get the same benefit" as private developers, said Advait Arun, an energy finance expert at the think tank Center for Public Enterprise.

Arun is also part of a local drive in the capital to take over D.C.’s electricity and gas utilities – one of at least a dozen cities or states exploring the strategy, according to the American Public Power Association industry group.

The D.C. campaign is working on draft legislation, Arun said, while using the current election season to get candidates behind a "public power pledge" that would create "a publicly owned municipal utility system that is just, accessible, and sourced from 100% clean energy."

The Electric Power Supply Association, a national trade group, declined to comment on such municipalization efforts, but  Pepco, the targeted D.C. utility, has raised alarm bells.

"Municipalizing the energy grid in the District of Columbia would be a massive undertaking and place significant financial burden on District residents and businesses," said the company's senior communications manager, Addie Kauzlarich.

She said the company's investments have led to record reliability while promoting renewable energy and infrastructure, with a focus on affordability and equity.

Like water or sewers

The idea of public power is not new, and already a large percentage of Americans get their electricity from public entities – 2,000 communities, or roughly one in seven Americans, according to the American Public Power Association.

Backers say those public utilities deliver lower rates, more dependability and a greater receptivity to local communities.

But it is the new direct pay provisions that are a real "game changer" for the sector, said John Godfrey, senior government relations director for the association.

"If our customers want (renewables), we don't have to ask our shareholders' permission. If they want storage or microgridding, we'll give it to them."

That kind of direct input is what Greg Woodring wants for his city, Ann Arbor in Michigan: "a city-owned utility – like a water or sewer utility."

Woodring is the president of Ann Arbor for Public Power, an advocacy group that has gotten the city to do an initial feasibility study and is now pushing for an additional, more in-depth report.

In Ann Arbor, the issue gained momentum after the city in 2020 adopted a goal to become carbon-neutral within a decade, including powering its grid solely with renewables.

"The only realistic way for us to achieve 100% is through municipalization," Woodring said.

Yet Missy Stults, the city's sustainability and innovations director, said an outright takeover of the electrical utility would be too complex and legally fraught.

"We looked at municipalization and decided that wasn't a reasonable goal," she said.

"It doesn't mean it's not something worth exploring, but that's not the strategy (to get to) 100% renewable."

Instead, Stults said the city is looking at a related option: creating a "sustainable energy utility", tasked with overseeing Ann Arbor's rising investments in renewable energy, an option she hopes residents can vote on in November.

Rural coops

The public power movement is now pushing in three directions: for greater public deployment of renewable power generation, for more representative governance at existing utilities, and even for municipalization in some places.

Last year, New York state passed a key law facilitating such public investments in renewables, while voters in Maine rejected a high-profile referendum to create a state-wide public power utility.

New York's Build Public Renewables Act for the first time allows the state's publicly owned power authority – the country's largest – to develop renewable energy.

"It's morally the right thing to do, but also because it's the only recipe for policies that are going to stick and serve people in the way we want to serve them," said Patrick Robbins, co-chair of Public Power NY, which worked to get the new law passed.

There is also new momentum in carving out a larger space for rural electrical cooperatives in the green transition – in many ways, where U.S. public power began almost a century ago.

"Rural people have been left out of the conversation about how energy deployment was going to happen," said Duane Ninneman, executive director of the non-profit CURE, which works in rural Minnesota.

Now that is starting to change, he said, with rural co-ops helping fashion Minnesota's new law, passed last year, aiming to make the state’s electricity carbon-free by 2040.

CURE is pushing cooperatives to better represent their communities, as well as teaching  towns and counties how to negotiate greater community benefits around power projects.

"Public power is a combination of the cooperative side and the municipal side," he said. "The impact could be something tremendous. But it will take some work."

(Reporting by Carey L. Biron, Editing by Lyndsay Griffiths.)