Much of the United States' electricity needs are met by investor-owned utility companies. Often part of multi-state holding companies, in 35 states these utilities have no competition by law. In this monopolistic situation, ordinary energy customers have little agency or control over their energy sources and costs. Archaic market rules push utility companies to build and own more infrastructure to benefit distant shareholders. Public utility regulators frequently lack sufficient funds to do independent oversight, relying on the utilities themselves for data and analysis.

Communities across the country have exercised the only power they have to fight back: take over their utility. Typically, communities have one or two methods  to wield this power: community choice aggregation or forming a municipal utility.

Using Community Choice

If you are in one of the 8 states which allow for this action, communities can take control with community choice aggregation (CCA). Sometimes called community choice energy, this policy allows cities, counties, or groups of both to create community-based pools of electricity customers. The community itself becomes the energy retailer, rather than the utility. The electric utility still has many roles: maintaining the grid, doing customer service, billing, and serving customers who have opted out. The locally-run community choice entity, however, purchases the energy and pays the bills. This inclusion of the utility company is what makes community choice different than a municipal utility, where the local community provides all three grid functions shown below.

In all successful programs, every local resident is automatically enrolled with the new, local provider (with the ability to opt-out if they wish). This automatic inclusion makes the group of customers large enough to have market power. Communities have a wide range of desired outcomes for their community choice programs, ranging from lower costs to more renewable energy to local jobs. The primary, shared aim is the power to choose and to use the market power of aggregating hundreds or thousands of customers to get a better deal in the marketplace.

To learn more, explore ILSR’s many resources on community choice aggregation:

Community Choice Aggregation Reports

Multimedia Resources

Becoming a Municipal Utility

The second option to leverage local power, municipalization, is available in all states, but requires determination.

In the creation of a municipal utility, the city buys out the energy infrastructure from the utility company, taking over all of its functions. Across the country, around 2,000 cities operate their own city-run electric or gas utilities. Typically, these utilities generate more revenue for the community, and provide more reliable and less costly electricity. In some cases, municipal utilities have also been leaders on clean energy deployment.

Many cities that attempt municipalization face monumental resistance from the incumbent utility. In one case, a Colorado utility was willing to spend almost 1 million dollars on a single ballot initiative to prevent municipalization. Among the following resources on municipalization is the tale of Boulder, a city engaged in an eight-year fight (through 2019) to become its own master. Other cities that have considered, but not completed, municipalization include Decorah, Iowa; Minneapolis, Minn.; and Santa Fe, N. Mex.

Other Resources