Climate Solution #1
Increase direct investment in renewable energy through Power Purchase Agreements, on-site installation, and community choice aggregation so that all Dallas residents have 100% renewable energy by 2035.
How it works
In order to keep global warming below 1.5℃ we need to transition from dirty fuel sources to renewable energy (wind, solar, geothermal, and battery storage) and have a zero emissions electricity grid. Texas cities like Dallas can use various tools to ensure all residents have 100% renewable energy by 2035, which would be in line with the Biden Administration’s goal of having a carbon-free electric grid by that date.
Unfortunately, Dallas’ Climate Action Plan only aims to have 50% of residents and businesses on renewable electricity plans by 2050, well below the federal government’s goals and where we need to be to stop the worst effects of climate change. Dallas can and needs to do better. Power Purchase Agreements, On-site Installation of Solar, and Community Choice Aggregation are three tools Dallas can use to accelerate the transition to renewable energy sources locally.
A Power Purchase Agreement (PPA) is a long-term contract between an energy producer and an electricity buyer in which the buyer agrees to purchase the project’s energy for a fixed price during the contract’s duration, typically lower than the local utility’s rate. A third party provides the upfront investment to pay for the project and in return, receives contracted long-term revenue from the energy buyer.
PPAs provide potential electricity cost savings with no up-front financial costs, long-term electricity cost stability and predictability, and the ability to purchase large volumes of electricity through a single transaction. With many of the contracts requiring large volumes of energy for the long term, usually from municipalities, large businesses, and universities, this allows for a substantial amount of energy to be procured from 100% renewable sources, making a significant step towards mitigating the climate crisis.
On-site Installation of Solar enables individuals and businesses to generate their own power by owning a solar energy system on their property, often on rooftops, and converting solar rays into electricity through the solar panels. Cities can use local solar projects to create powerful economic benefits, such as stimulating job growth and saving taxpayer money on energy costs. Local solar and microgrids also increase local resilience by making residents less dependent on the statewide grid during times of natural disasters and potentially helping to insulate them from blackouts caused by energy shortages in other parts of the state, like those we experienced during winter storm Uri. The City of Dallas can increase solar adoption by setting ambitious goals for solar and install more solar on city buildings.
This allows individuals to become more self-sufficient by generating some or all of their power from on-site, clean power. Additionally, solar helps to save money on electricity bills, become more resilient to climate impacts by shifting away from the centralized grid, and increases the transition to clean energy, with excess energy production being able to be sent back to the grid for a profit to the individual producer, all while allowing others to also take part in a cleaner energy mix.
Community Choice Aggregation (CCA) programs allow local governments to procure electricity on behalf of their residents, businesses, and municipal customers. Through CCA, local governments can control local electricity portfolios while existing investor-owned utilities remain responsible for transmission and distribution.
CCAs are an attractive option for communities that want more local control over their electricity sources, more renewable power than is offered by the default utility, and/or lower electricity prices. By aggregating demand, communities gain leverage to negotiate better rates with competitive suppliers and choose cleaner power sources. This helps to break apart monopolies on the electricity market from utilities that are not incentivized to stop using fossil fuels any time soon.
How to implement these policies in Dallas
Power Purchase Agreement (PPA)
- Leverage city influence to increase renewables through Power Purchase Agreements for the city’s long-term energy procurement contracts, requiring PPAs to be 100% renewable energy.
- Ensure the successful implementation of the city’s green procurement plan, and that it is 100% renewable.
Although renewable energy has become increasingly competitive with the cost of fossil-fuel generation, the upfront costs of installing new capacity and ongoing maintenance needs associated with on-site generation may still be too burdensome for many cities. A properly-structured PPA may help solve this. Some developers, for example, may be content with providing the upfront capital for development if they have a long-term agreement in place for the generation. A developer may also include maintenance costs in the agreement, which will reduce the uncertainty about technology upkeep.
All cities can enter PPAs for renewable electricity, but the type of PPA may be dictated by existing regulations that cover retail choice and electricity franchises. Cities in markets allowing retail choice with favorable franchising structures can typically pursue PPAs, while cities in markets not allowing retail choice (most regulated electricity markets), and which have strict franchise requirements that prohibit the city from purchasing electricity from any entity besides the existing utility, may need to consider vPPAs. A vPPA still helps promote renewable energy development but in another electricity grid. In some cases, franchising agreements may also present a city with opportunities to negotiate with the existing utility and spur a move toward different electricity sources.
On-site Installation (solar)
- Build upon the city of Dallas promoting utility rate structures that incentivize solar adoption.
- Facilitate greater adoption of distributed solar for residential and commercial rooftops and investment in battery storage through financial incentives, including rebates, incentives, and low-cost financing.
- Encourage Dallas to allow and incentivize access to affordable community solar for those who are ineligible for rooftop solar (ex: renters), promoting CECAP’s community solar framework.
Community Choice Aggregation
As a first step, Dallas should work with other local governments to actively lobby the Texas legislature to pass legislation authorizing Community Choice Aggregation (CCA) in Texas. Once authorized by the state government, the city of Dallas would be able to offer CCAs as a means to quickly grow the number of businesses and residents using renewable energy in their homes. CCAs are viewed as a means of economic opportunity and job creation for communities.
In states with CCAs, two primary models typically operate. The first is a joint powers authority (JPA) model where cities and/or counties join to form a JPA, an independent public agency that operates the CCA on behalf of its member agencies. When a JPA is formed, participating jurisdictions typically are represented on the JPA’s board of directors, which is made up of elected leaders from participating cities or counties. Many CCAs also have a community advisory committee, which often comprises volunteers who represent the participating agencies and labor and commercial, agricultural, industrial or other stakeholders. The second option is a single jurisdiction model whereby a city or county individually establishes and operates a CCA as an enterprise fund within the jurisdiction.