Utah homeowners and other small customers could buy electricity produced by solar, wind and other renewable sources under a bill introduced in the Utah House.
HB110 would allow municipalities and counties to purchase power from renewable sources on behalf of customers, creating new incentives to develop Utah’s ample alternative-energy resources. The power would be delivered through transmission networks operated by utility companies, but Rocky Mountain Power, the state’s largest, opposes the bill, arguing that implementing it would incur huge costs.
“It’s about choice,” said Summit County Councilman Roger Armstrong, who backs the bill. “When you adopt these kinds of innovations, it enables us to stimulate the renewable market.”
The bill, sponsored by Rep. Kraig Powell, R-Heber City, has strong support from the Solar Energy Industries Association, which contends that lack of competition stifles demand for renewables.
“Thousands of customers want to buy renewable energy but can’t,” wrote Carrie Cullen Hitt, the trade group’s vice president, in a letter of endorsement. “Entrepreneurs like our members want to provide that power, but utility monopolies prevent them. This bill will help connect willing buyers with a market that’s poised to take off.”
Powell’s measure expands on legislation passed in 2012 at the insistence of online retailer eBay. That law enables large electricity customers to purchase power from renewable sources as long as they contract for at least two megawatts, enough to power about 2,000 homes.
Silicon Valley-based eBay needed the law change to meet its corporate sustainability goals, which call for more reliance on green energy. The company is now developing a technology called Ormat, which recovers waste heat to generate power. It hopes to harvest five megawatts of electricity at its South Jordan data center.
“With this investment, we anticipate that we’ll be able to reach, and possibly surpass, our goal of sourcing at least 8 percent of eBay Inc.’s energy from cleaner sources by 2015,” executive Dean Nelson wrote in a blog post.
The eBay bill established a way for the utility that transmits the power to be compensated for modifications to and the use of its distribution network.
Powell acknowledges logistical hurdles to expanding the practice to residential and small customers.
“It is a large change in the way we think of energy delivery in Utah,” Powell said. “It makes sense to have some choice in selection of energy types. Cities and counties that are willing to act as the gatekeeper should be able to offer that service.”
Unless they install their own turbines or solar panels, smaller Utah power customers’ access to renewables now depends on decisions made by Rocky Mountain Power, a regulated monopoly that serves most of the state. HB110, to be heard in committee Tuesday, would change that by enabling “community choice aggregation” (CCA), a concept pioneered in Northern California’s Marin County and now spreading to other counties up and down the coast.
A nonprofit power authority called Marin Clean Energy purchases power for all 13 Marin cities and Richmond, the city directly across the San Francisco Bay. About 77 percent of these cities’ businesses and homes have signed up to receive alternate power.
Last year, commercial customers actually paid less for renewable energy, while residential customers paid $18 more on average, said Marin Clean Energy spokeswoman Jamie Tuckey.
California is one of six states that allow such arrangements. The others are Massachusetts, Rhode Island, Ohio, Illinois and New Jersey.
“We see a great range of clean-energy activities that were enabled by CCA,” said Shawn Marshall, founder of LEAN Energy U.S., a California-based nonprofit advocating consumer choice. “We were told there is not enough [renewable energy] supply to serve [California], but exactly the opposite has proven to be true. It’s really a market driver. When a large group of customers asks for something, the market usually responds.”
But Rocky Mountain Power says extending such an arrangement to communities would prove costly in a regulated market like Utah.
“There is a long track record showing that states with open access have higher electricity rates than states with regulated utilities, at least 3 cents per kilowatt-hour higher,” utility spokesman Jeff Hymas said in an email.
“Implementation of the bill would be incredibly complicated, and would require new, expensive metering equipment on each customer’s home so they could receive power from both the community’s renewable generation source as well as Rocky Mountain Power when the renewable source isn’t producing enough electricity to meet their needs.”