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
March 15th, 2011
How are communities using this unique strategy for taking charge of their energy future? This report explains community choice aggregation and how it gives communities more power to lower costs and choose the sources of their electricity supply.READ THE REPORT
Voices of 100%: Can Philadelphia and its Suburbs Revolutionize Their Local Energy System? — Episode 80 of Local Energy Rules Podcast
July 3rd, 2019
More than 100 U.S. cities have now set ambitious commitments to transition to renewable energy, but how are they making these goals a reality? In this episode of our Voices of 100% series from Local Energy Rules, we dig into what has given 16 suburbs of Philadelphia an edge over the central city in making commitments to 100% renewable energy, and what strategies both suburbs and the city can take to make progress.EXPLORE...
September 19th, 2018
As a growing number of U.S. cities make commitments to reach 100 percent renewable electricity, how are cities making plans to achieve these goals? In our third episode of Voices of 100%, a multi-part series of Local Energy Rules, San Diego’s Chief Sustainability Officer Cody Hooven joins John Farrell to discuss how the city is making progress toward its ambitious goal to shift to 100 percent renewable energy.EXPLORE...
Ohio Residents Exercise Community Choice to Bill Themselves for Public Solar — Episode 56 of Local Energy Rules Podcast
July 5th, 2018
Residents of Athens, Ohio, recently passed a carbon fee ballot initiative that will add 0.2 cents per kilowatt hour to electricity costs. On this episode of Local Energy Rules, Director of the Energy Democracy Initiative John Farrell speaks with UpGrade Ohio’s information and outreach director Mathew Roberts about this first-of-its-kind carbon fee and how a community-run energy utility made it possible.EXPLORE...
March 14th, 2018
More than 50 U.S. Cities have made commitments to reach 100 percent renewable electricity, but how do communities build the political will to adopt such goals, and how do they plan to meet them? John Farrell interviews Nicole Capretz of the Climate Action Campaign to learn how San Diego's community choice program will move them toward 100 percent renewable electricity.EXPLORE...
Westchester Power Puts New York Communities in Charge of Energy Future – Episode 43 of Local Energy Rules Podcast
April 28th, 2017
In this 2017 episode of Local Energy Rules, John Farrell, director of ILSR's Energy Democracy initiative spoke with Glenn Weinberg, who helped launch Westchester Power, a community choice aggregation program for 20 communities just north of New York City.EXPLORE...
Same Price, More Renewables. San Diego's Fight for Community Choice – Episode 23A of Local Energy Rules Podcast
June 5th, 2014
In this 2014 episode of Local Energy Rules, ILSR Energy Democracy initiative director John Farrell talks with Lane Sharman, co-founder and chair of the San Diego Energy District Foundation about the energy and economic potential of a city-run community choice energy program.EXPLORE...
April 3rd, 2014
Learn more about the struggle against the incumbent utility giant for local clean energy in this 2014 interview with Marin Clean Energy Executive Director Dawn Wiesz about community choice aggregation in California and her community's pioneering program.EXPLORE...
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.
From the Archive: A David and Goliath Fight to Tap World Class Solar — Episode 75 of Local Energy Rules
April 25th, 2019
In this episode of Local Energy Rules, we revisit an earlier episode from our archives in which ILSR’s Director of Energy Democracy, John Farrell speaks with Mariel Nanasi of New Mexico’s New Energy Economy about how the citizens of Santa Fe could benefit from the economic and environmental benefits of switching to a city-owned utility.EXPLORE...
Voices of 100%: Boulder Takes Bold Steps to Support Local Renewable Energy — Episode 71 of Local Energy Rules Podcast
March 6th, 2019
Over 100 U.S. cities have now set goals to transition to 100 percent renewable energy. In a new episode of our Voices of 100% series from Local Energy Rules, we feature the city of Boulder, Colo., and the strategies it is using to make its ambitious local, clean energy goal a reality.EXPLORE...
May 31st, 2018
The final referendum results in May 2018 were stunningly close, with local organizers coming within three votes of advancing an effort for a municipal electric utility in the small town of Decorah, Iowa. The incumbent monopoly utility outspent local activists by a 4-to-1 margin, overwhelming local organizing despite a study that suggested electric customers could save 30% by switching to a locally owned utility.EXPLORE...
Ballot Initiative Shapes Iowa Town’s Fight for Local Power — Episode 54 of Local Energy Rules Podcast
April 25th, 2018
What can a town do to advance clean energy locally if it is fed up with its incumbent, investor-owned monopoly utility? In the latest episode of the Local Energy Rules podcast, John Farrell, Director of ILSR’s Energy Democracy Initiative, interviews Andy Johnson and Joel Zook, community members and local energy leaders from Decorah Power, about an upcoming ballot initiative in Decorah, Iowa, and the culmination of an organized, grassroots effort by residents to take back local control of their electric utility and energy future. In a midterm election year, this is one vote that those who care about local, clean eEXPLORE...
October 13th, 2017
Municipal Utility Offers Springboard for Minnesota City's Energy Vision – Episode 42 of Local Energy Rules Podcast
March 6th, 2017
Sprouting from southeastern Minnesota farm country, the city of Rochester is an unassuming mini-metropolis best known for its world-famous Mayo Clinic. But the city is also home to the state’s largest municipal utility and an ambitious plan to ramp up renewable generation. In this 2017 episode of Local Energy Rules, John Farrell speaks with Rochester City Council-member Michael Wojcik.EXPLORE...
May 23rd, 2007
In mid-May, Los Angeles' Mayor announced a new climate change action plan that calls for the LA municipal utility to increase its renewable energy portfolio to reach 35 percent by 2020. This in combination with about 50 other proposed actions will work to reduce GHG emissions in the city of angels to 35 percent below 1990 levels by 2030. EXPLORE...