Local Programs & Project Development

The Coalition's strategy to modernize market rules and policies, develop local programs and projects — while managing a cost-effective portfolio of energy contracts — reinforce and enable one another, and are intended to ensure that Community Power programs achieve the full range of their local policy objectives over the long-term.

 

Innovative Local Programs & Customer Services

 

Facilitating the design and deployment of innovative, cost-effective local programs is a strategic and financial priority for the Coalition. These offerings will help our Members' Community Power programs:

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1. Lower electricity supply costs and risk in aggregate, along with the electricity bills of participating customers;

2. Strengthen customer relationships and local brand recognition; and 

3. Protect against customer attrition (the risk that customers opt-out of the program over time by choosing an alternative supplier).

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Cost-effective local programs are designed to offer new retail products and services that enable customers to:

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• Intelligently moderate their use of electricity from the grid during times of high wholesale power prices and when the physical grid is constrained (at-risk of not being able to deliver enough power to meet all customers’ usage requirements during the hours of “peak demand”); and

• Increase their use of electricity from the grid when wholesale prices are depressed and the physical grid is not constrained. 

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Examples of innovative retail products and services that enable customers to do so include time-based rate options, individual and group net metering, distributed generation and energy storage programs, electric vehicle charging rates, and other services that leverage third-party aggregators and directly empower customers with new technologies.

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Intelligent use of electricity simultaneously lower costs for both individual customers (from a “total bill” perspective, inclusive of transmission and distribution charges) and each Member’s Community Power program in aggregate (from a supply cost perspective) — provided that the local programs are properly designed to achieve these over-lapping objectives. 

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Energy Risk Management & Financial Reserve Policies

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To guide the long-term stability of Member Community Power programs, the Coalition assists Members in adopting the Coalition's Energy Portfolio Risk Management, Retail Rates, and Financial Reserve policies. The purpose of these policies is to: 

 

1. Guide each Member’s Community Power program to allocate their customer revenues in ways that balance their community’s goals and objectives over the short-to-long term; and

2. Define how the Coalition will conduct energy procurement risk management, ratesetting, and financial reserve fund management on behalf of each Member (e.g., to remain in compliance with the policies). 

 

The Coalition manages a single power portfolio on behalf of Member Community Power programs, and our policies help ensure that the Coalition adequately analyzes and plans for contingencies (such as power supply shocks, economic downturns and regulatory changes) and remains able to draw on capital reserves or credit support sufficient to maintain (1) rate stability for customers and (2) adequate cash flow for program operations in these situations. 

 

As Members accrue financial reserves, the Coalition will be able to facilitate additional ways to lower costs and create new value for our Members — and further enhance the financial stability of participating Community Power programs in the process. 

 

As one example, the accrual of sufficient reserves will allow the Coalition to begin self-providing the collateral required for wholesale power market transactions and power purchase agreements. This will lower the capital costs and risk premiums otherwise embedded into the price of power for Members.

 

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Development of Renewable and Battery Storage Projects

 

As Members demonstrate the ability to accrue reserves sufficient to ensure their financial stability — and maintain or grow their customer base by offering competitive rates and innovative services over time — the Coalition will be able to facilitate new local project developments for Members that elect to jointly participate in long-term contracting solicitations. As context:

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• Project developers and financiers require long-term power purchase agreements (e.g., 10 years) to justify the upfront cost of constructing renewables and battery storage facilities; 

• Consequently, project financiers will not execute long-term contracts with a Community Power program if they do not believe that the program will remain a stable, credit-worthy counterparty — and able to meet its payment obligations over the length of the contract. 

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Achieving the ability to execute long-term contracts and build new renewables and battery storage projects is a priority for the Coalition.  

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This objective is a common policy goal for many of our Member communities and will additionally diversify the Coalition’s energy supply portfolio — helping stabilize our operating margins by intelligently hedging our Members’ collective exposure to wholesale market dynamics and price fluctuations over time.