Many environmental and small-consumer advocates remain wary of the restructuring process underway in the American electric system. The most constructive advocates, however, now also seek mechanisms through which these structural changes can deliver both fair rates for small consumers and a healthy environment. In the following paper, Peter Asmus discusses one such mechanism: municipal green aggregation, in which local governments group citizens into a "buyers club" for power generated from renewable resources.

For municipal green aggregation to succeed, we believe that four things must first occur:

• First, as the retail electricity market allows customers to select their power provider, local governments should buy all or part of their own power from renewable energy suppliers. Sales of renewable power for municipal buildings, light rail systems, street lights and the like will sustain nascent green energy companies, expanding the supply of renewable energy and lowering its price. We recommend an immediate 10 percent renewable energy purchase requirement for local governments themselves where supply permits. Localities that operate their own municipal utilities - roughly two thousand across the nation - in particular should pursue this concept.
• Second, local governments must prepare citizens for the coming retail electricity market. The public must understand the environmental impact of producing and using electricity, they must accept the rationale for a municipal role, and they must trust their government to become an efficient and effective green energy purchasing agent. In short, local governments need to educate the public to ensure that municipal aggregation enjoys democratic support.
• Third, and related to the previous point, local governments must explore the benefits that regional renewable energy development can bring to their economies. They must demonstrate to citizens that by creating a market for environmentally friendly green power, the community can gain from retaining energy revenues in the community and putting local resources to work.
• Fourth and finally, municipalities exploring ways to meet local air pollution goals and reduce emissions of greenhouse gases should make municipal green aggregation part of their clean air and climate protection plans.

In short, municipal green aggregation is a good idea. By pursuing the foregoing ideas with confidence and creativity, local governments can make it happen.

Adam Serchuk, Research Director & Executive Editor of REPP's Issue Brief series
Roby Roberts, Executive Director
Virinder Singh, Research Associate

January 9, 1998

Abstract Executive Summary Article