A Tale of Three Cities

Tackling climate change policy is not for the faint of heart. On the federal level in particular, progress on the issue remains largely blocked by partisan politics, a small but hardy group of global-warming deniers, heavy lobbying by conventional energy industries, and concerns about the economic impact of carbon-reduction measures on states that produce fossil-based fuels such as coal. "When you work on climate change, you have to remain an optimist," US Department of Energy official Alice Madden said recently. "Otherwise, it would be hard to get out of bed in the morning."

Chatterjee and her colleagues first became aware of aggregation as a weapon in the fight against climate change about two years ago, when the staff of WWF's office in Sweden suggested that the organization confine its Earth Hour City Challenge (EHCC) to cities that provided their residents with 100% renewable energy. "Impossible," Chatterjee recalls thinking. "Maybe that was fine in northern Europe, but that was not how the United States worked. I thought it would limit the number of American cities we were working with to zero."

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It was in that context that in 2011 Oak Park became the first municipality in the country to use a CCA to negotiate a 100% renewable electricity portfolio for residents and small businesses. "We saw aggregation as not just being about the best price, but about choosing green energy as a way to address local effects of climate change and to work towards a smart community future," Doyle says. "It went from being a statement about practicality to a conversation about hope."

When Oak Park's groundbreaking green energy initiative was announced, it made national news and brought a host of accolades and awards from sustainability groups around the country. Paying close attention to all this were officials in Cincinnati, who were preparing a renewable energy push of their own. "While Cincinnati was the first major city to use aggregation to deliver a 100% green energy product, we were not the first to come up with the idea," concedes Larry Falkin, director of the city's Office of Environment & Sustainability. "We modeled our program on Oak Park's."

Once the aggregation concept was approved by Cincinnati voters in a referendum, Falkin and his staff sent out requests for proposals from energy providers. The results were eye-opening. The best bid for a 100% renewable electricity package for aggregation customers was 21% below the default utility's market rate, while the lowest possible bid for a mixed-energy package was 23% below market rate. Cincinnati's city manager at the time, Milton Dohoney Jr., chose the renewable package.

"Contrary to common belief, government contracting is never about the lowest bid—it's about the lowest best bid," Falkin explains. "There are lots of situations where the lowest bid is not the best bid because of nonfinancial considerations that outweigh the difference in price. If the choice had been that the people's electric bills would stay the same or go up 2%, I think that would have been a hard sell. But when the choice was a 23% discount or a 21% discount, that put the city manager in a position where he could say, 'I'm saving folks a lot of money and, by the way, I'm doing the right thing.'"

Cincinnati's renewable energy initiative, which prompted the US Environmental Protection Agency to name the city its Green Power Community of the Year, added momentum to a growing movement soon joined by the city of Chicago. The Windy City had long been at the forefront of urban sustainability innovation—emphasizing green roofs, permeable paving to reduce storm water runoff and heat-resistant plantings to curb the urban heat-island effect. Last year, the city even introduced one-day permitting for residential solar installations. But Chicago was only "part of the second wave of communities to introduce municipal aggregation," as the Environmental Law & Policy Center's Sarah Wochos explains.

With the 2011 election of Mayor Rahm Emanuel, Chicago's administration moved swiftly to shut down the city's last two coal-fired power plants. The hoopla surrounding that event created momentum for an unprecedented move during Chicago's aggregation process: requesting a cleaner energy package that included no coal-generated electricity. While negotiating this, Chicago officials also succeeded in winning another environmental victory: creating a package that incorporated at least 5% wind power.

The request startled executives at Integrys, the Chicago-based utility holding company that ultimately won the bid. "When they first asked us if they could buy the product with no coal, our immediate reaction was, 'You can't do that. It doesn't work that way,'" recalls Integrys's Ronnie Cardwell. "But they insisted. ‘We just closed two coal plants, made a big deal out of it. We can't go out and buy coal electricity after we did that.' The customer of course always being right, we went back to the drawing board and were able to structure the supply in a way that did not include power from coal."

Karen Weigert, Chicago's chief sustainability officer, recalls the city's decision to stick to its guns as a matter of common sense. "It's a market, and when you ask a market for something, they can provide it," she says. "It was a great deal for our residents, because you're getting the dollar savings as well as the environmental impact."

Chicago's aggregation strategy—which included direct procurement of power from suppliers, as opposed to the easier and more common practice of using renewable energy credits to offset brown power usage—set yet another example for cities in the future. "This was something very different and unique and brave, quite honestly," Wochos says. "The no-coal request…sent a strong signal that the big-city aggregation model is not interested in coal. It sends a signal to other municipalities, and it also sends a signal to other utilities, that they shouldn't be investing in coal. And the request for wind power sends a signal that companies should be investing in wind."

Not to be outdone, Cleveland—which had been using aggregation since 2000, albeit in a way primarily focused on cost rather than sustainability—took the unusual step in 2013 of negotiating a green energy package that emphasized not only wind power but local wind power. The city now offers its citizens a 100% renewable electricity package that features 50% hydroelectric power, 20% wind power generated out-of-state and 30% wind power generated in Ohio. This last category is intended to spur local job creation—a concept that the city plans to emphasize even more strongly as it seeks new aggregation proposals in 2016.

"We see this as a tremendously important step in the right direction, both in terms of getting our citizens comfortable with the idea of renewable energy powering their homes and setting the bar high in terms of green jobs in our own backyard," says Jenita McGowan, Cleveland's chief of sustainability. "In 2016, we'll be considering aggregation that can support more local renewable generation facilities, which we expect will be in place by then."

In the early days of aggregation, citizen participation in the decision-making process was limited, in part because the model was new, complex and poorly understood except in the simplistic context of cost savings. But with sustainability considerations increasingly highlighted in Cincinnati, Chicago and Cleveland, residents and advocacy groups such as WWF have been more vocal in support of expanding renewable energy by sending emails to local officials, speaking out at public meetings and using private networks to encourage policy makers to act.

Gail Eyler, a member of WWF's National Council, took note, and offered to connect WWF to Mayor Emanuel's chief of staff, who happened to be a college friend. As a result, WWF now enjoys an excellent rapport with the Emanuel administration on matters related to climate change and renewable energy expansion. "It was a small thing, really," says Eyler, "but maybe it speeded the process along."

That kind of networking and cooperation will be more important than ever as municipal aggregation matures and expands around the country in a way increasingly linked to the spread of renewable energy use. (At press time, several states—including Pennsylvania and Utah—were considering aggregation bills.) "I think one of the most pressing needs going forward will be getting more state legislatures to approve bills allowing aggregation," says Doyle of Oak Park. "Active, vocal support from individual citizens and groups like WWF will be crucial in that process."

The process may be gradual, but if the cases of Illinois and Ohio are predictors, aggregation in states could snowball in the foreseeable future, leading to many more cities making major strides against climate change.

WWF's Chatterjee hopes so. "Before I jump in the ocean, I like to stick my toe in and see what the temperature is like," she says. "Our hope is that cities stick their toes in and like what they feel. And this has to be just the beginning. If it's not, we're all in big trouble. It's not just the polar bears, you know. We're all in this together."