Buying Clean Energy: One Community at a Time

Ken Jones  
Glen Rock Environmental Commission 

Many residents are interested in doing what they can to reduce energy use (e.g. turning down the thermostats, using LED light bulbs), but there is growing concern for our environment that requires additional measures. Rooftop solar panels are affordable with a payback of 10 years or less and they put a real dent in our carbon footprint, but this is not an option for many. Another option is to purchase electricity from a renewable energy provider, but buyer need be aware of unscrupulous offerings such as teaser rates and cancellation fees. 

Many municipalities in NJ are helping to make the switch to a green energy provider safer and easier and cheaper. In the past 2 years, a number of towns in central NJ, including New Brunswick, Princeton, Woodbridge, and Glen Rock in Bergen County have created renewable government energy aggregation (R-GEA) programs—essentially government-operated purchasing cooperatives—that leverage the purchasing power of thousands of residents to obtain competitive contracts for electricity. In other states, these are called Community Choice Aggregation.  

Two years ago, several towns in Essex County formed a multi-town cooperative to provide electricity with twice the renewable content as PSE&G at a comparable cost. Recently, a second contract was awarded to an expanded group of towns, including Glen Rock. In addition to the enhanced renewable product, this contract offers an optional 100% renewable product at slightly greater cost. 

Despite the obvious appeal to those who would like to support the transition to clean energy, there are a few hurdles to overcome along the way to establishing an R-GEA. For one, the municipal government must take several steps before collective bidding can occur.  Most towns will want to find an energy agent (or consultant) who can explain the process and options, as well as manage the technical aspects of crafting bid specifications and soliciting proposals. Additionally, the governing body must pass an ordinance that permits the town to form a government-operated purchasing cooperative and solicit bids for electrical power on behalf of the residents. 

Another challenge to getting an R-GEA off the ground is explaining how it works to residents because, ultimately, they make the choice to either accept the new product or opt-out and remain with their current utility (PSE&G for most of us). Historically, anywhere between 10% to 50% of residents decide to opt-out. Once the municipality accepts a bid, all residents are informed by mail about the features of the plan and its price. Individuals who want to participate don’t need to do anything—they are automatically enrolled in the plan by the new provider.  However, those who prefer to receive electricity from their utility must “opt-out” either by placing a phone call or by checking a box and placing their response in the mail.  Although it sounds simple, for some the process is bothersome. Nevertheless, the opt-out mechanism is a necessary downside of the process; without it bid prices would be unacceptably high in order to offset the risk of having too few customers. Herein lies the conundrum: do the benefits of offering inexpensive cleaner energy to a large swath of residents outweigh the inconvenience placed on others?  Clearly many towns believe this is the case, but the success of these programs is critically dependent upon public officials being transparent in the process and informing residents along the way, as well as a willingness among public to embrace green initiatives. 

Many folks who contemplate joining an R-GEA program wonder where the renewable energy is coming from. While it’s true that there are no wind turbines yet in Bergen County, you can think of the energy grid as a drainage basin: as water from different smaller tributaries merges together to form a river, individual sources come together to form a homogeneous mixture. Likewise, electricity coming from wind, solar, hydroelectric and non-renewable generators are merged and mixed in our grid, which includes a large region of the northeast.  

When it’s all mixed together, you don’t know whether the electricity you’ve just used to boil your kettle actually contains electrons produced from clean energy sources, but we do know the breakdown of electricity generation by source type (non-renewables vs. renewables).  

Every unit of electricity that you consume on your plan will be matched by the R-GEA and bought as certified renewable energy and placed back in your energy grid. In effect, the actual amount of electricity you buy will probably be dispersed to many houses, but your participation in the R-GEA will indirectly increase demand for the buildout of new solar and wind-generated electricity in our region because the contract we make specifies the allowable sources of power generation (and through RECs).  This is another important advantage of these programs—they let you (or town officials) determine where the new renewable electricity comes from (local or regional is best).   

Finally, residential participation in these programs sends a very positive signal to our elected officials at both state and national levels that there is a real interest in reducing our carbon footprint. The current incremental shift toward clean energy sources does not place us on a trajectory that will meet the goals of the Paris Agreement or even our State’s Clean Energy Program with a near-term goal of 50% of electricity produced by renewables by 2030. New Jersey has recently begun two major initiatives to increase both solar and wind through the Community Solar program and through the development of offshore wind. Our state has a long way to meet these goals, and by enabling R-GEAs, our town’s elected officials are demonstrating much needed leadership. 

Ken Jones is a resident of Glen Rock, and serves on the Glen Rock Environment Commission