Several distinct groups, each with unique interests, need to familiarize themselves with green aggregation by local governments:
Local governments need to understand the opportunities and altered responsibilities they face in a restructured energy market, and how renewable resources3 can meet local needs. One local need that renewables address is meeting environmental policy goals, such as reducing greenhouse gases that contribute to global climate change. Another local need met by renewable resources is regional economic development, in this case by retaining energy revenues in the community.4 A third local need that renewables target is responding to citizen concern for the environment and support of clean energy, as shown in decades of public opinion surveys.5
Restructuring will provide local governments not only the opportunity but also the responsibility to satisfy this long-standing citizen de-sire. Local governments, even those not currently in the electricity business, might adapt programs developed by the Sacramento Municipal Utility (discussed below) to promote new renewable power sources in response to customer demand.6
With restructuring, local governments can resurrect and revitalize their long dormant electricity service franchise powers.7 Other tools for encouraging the development of renewable resources include access to low-cost capital (in the form of low-interest bonds or tax-exempt financing) and the potential to develop local ordinances for siting new generation facilities.8 In addition, local governments already send constituents monthly bills for other infrastructure services; this system could be a potent advantage of public green aggregation programs over for-profit marketers, greatly redu-cing their transaction costs.
Environmentalists and renewable energy advocates should consider that a green municipal aggregation strategy represents an excellent opportunity to advance clean power in a market-oriented electric system. Green municipal aggregation, with voluntary public participation, also offers an opportunity to link environmental goals more closely to the goal of consumer advocates, who have not always supported those environmental energy policies perceived as potentially costly and not supported by ratepayers.
Renewable energy developers and manufacturers will find that local governments represent a logical new market as most utilities shy away from investments in new electricity generation facilities of any kind, and particularly in resources that are perceived to cost more.
Consumer advocates have long safeguarded the public interest in reasonable electricity rates, and they continue to pursue that goal in the restructuring process. Yet consumer advocates, too, need to expand their horizons and consider how municipal aggregation can simultaneously deliver economic and environmental benefits from competition. Consumer advocates can become key partners in implementing clean power programs that reflect local values and utilize locally available renewable resources. Finally, consumer advocates wishing to expand their focus from cost alone to economically healthy communities in general will find that renewable energy development, unlike most traditional energy infrastructure, can create local jobs and retain energy revenues in the community.
The following section of this paper explores the probable rewards of, possible disadvantages of, and potential obstacles to municipal green aggregation through history and policy analysis. The following section contains case studies of four local governments that have developed innovative programs, plus a short study of Sacramento's municipal utility, the Sacramento Municipal Utility District (SMUD).