Marshall-based energy group localizes power and profit

David Briggs
Paul Fenn invented the community choice aggregation model.
06/28/2012

Ask Paul Fenn what he and his comrades at Local Power are concocting at the historic Strauss family farmhouse, and you’re likely in for a wild intellectual ride through 20th century politics and the corporatization of energy. But it boils down to this: “We are the Black Panthers of green energy,” Mr. Fenn said. “We’re considered radicals.”

Since 1995 Local Power has been changing the way communities think about and buy power. Through the creation of Community Choice Aggregation, or CCA’s — an invention of Mr. Fenn’s that is now used throughout the world — the Marshall-based company is working to make energy greener, cheaper and more independent.

A CCA works by replacing distant concentrations of corporate power with locally owned “green” sources of electricity such as wind or solar farms. “This is achieved by a socialization of wealth,” Charles Schultz, the company’s development director, said. “The money that previously went to a utility is now publicly aggregated, and then directed back into the community. “

The work of Mr. Fenn, his wife and business partner Julia Peters and their small staff is being embraced by a growing number of state and city governments. By creating mathematical, theoretical and financial models to test viability, and writing energy legislation, Local Power works with mayors, city council members and other government leaders to implement what they see as a solution to global climate change: local ownership of a mix of green technology choices, “smart” and micro grids and on-demand technologies adapted to energy-use patterns.

Dressed in an old down jacket and cocked, weathered sea captain’s cap on a recent afternoon, Mr. Fenn had the air of a revolutionary about him. “When it comes to international power struggles, energy is the new land,” he said. “We’re drilling a hole into one of society’s scary corners, and proving something is possible that they said was impossible.”

Widely regarded as the leader of America’s community choice movement, Mr. Fenn invented CCA’s while working for the Massachusetts senate in 1994. “I had been temping for a year, and Julia’s uncle, who was the governor, helped me get in touch with the right people to start writing bills for the energy committee,” he said.

Mr. Fenn didn’t start out in politics, or even law. An Oakland native with a Master’s in intellectual history, he attended Bates College and served as Dean’s Fellow at Manhattan’s New School for Social Research. He studied Otto Bauer and the Social Democrats, and came to lament how alienated society had become from the resources it needs to fuel modern life, be it vegetables or crude oil.

“There has been a policy shift owing to the corporate control of energy,” he said. “These primary issues have been removed from our consciousness and from the political debate, and we’ve gone from discussing economics to getting wrapped up in identity politics.”

But it wasn’t concern for the environment that propelled Mr. Fenn into the sustainable energy game — it was theory. As a trained intellectual historian, he writes about the energy industry, climate change and political and economic theory “as a form of participatory history” — an effort to write history as a participant rather than a neutral observer. “The idea is to re-engage and legislate,” he said. “We have to move from critique into actually writing law.”

It was after meeting British economist and Nobel laureate Ronald Coase that Mr. Fenn had a realization about the “farce” of carbon trading. “I thought, ‘This is it! This is the enemy! The corporate agenda pretending to be the solution,’” he said. “[They just] trade permits to pollute!”

Yet after Massachusetts passed his CCA bill in 1994, Mr. Fenn was promptly fired and his boss removed from the chairmanship. “From their point of view, I was a commie. They were like, ‘Who let this guy in here?’”

Mr. Fenn has been working to bring green power to the people ever since. He is the principal consultant to the San Francisco Local Agency Formation Commission and the San Francisco Public Utilities Commission. He has written and published continuously since 1992, and is currently working on a chapter for a book titled “The Prometheus Project,” about energy and economics.

After developing community choice legislation in Ohio and New Jersey in the late 1990s, Mr. Fenn drafted the nation’s first “solar bond” authority for San Francisco in 2001. The program, called H Bonds, allows the city to build its own solar power sources through tax-free bond revenue, and is now part of the city charter. Local Power has drafted 10 years of documents for San Francisco’s trailblazing community choice program, known as CleanPowerSF.

In 2010, PG&E’s Prop 16 put a spotlight on the community choice movement in California. Through a $65 million campaign, the electric company sought to block Marin County, San Francisco and other communities hoping to switch to greener power suppliers under the community choice law, Assembly Bill 117, authored by Mr. Fenn. That law, sponsored by former state assemblywoman Carol Migden, set the stage for the creation of CCA service in Marin County through the Marin Energy Authority via Marin Clean Energy.

Community choice programs have launched, or are in the works, in hundreds of cities and counties. Locally, Marin Clean Energy has been providing power service to Marin customers since May 2010. But while Marin was once ahead of San Francisco on the green energy front, the county has since taken a back seat when it comes to green energy innovation, Mr. Fenn said.

Local Power had negotiated with a dozen partners in order to get reliable, long-term bundled renewable energy for Marin at rates that “meet or beat” the rates being charged by PG&E. But instead, Mr. Fenn says MEA decided to rely on a high percentage of unbundled energy, without physical conversion.

“They sold out in order to make it happen faster,” he explained.

Wherever they work, Local Power’s formula is to look for the mayor or empowered local official who wants to physically convert more than 50 percent of the community’s power supply to local, renewable sources — and Local Power intends to deliver this conversion without any increase in power rates, he said.

Mr. Schultz said that beyond the “he said, she said” of renewable energy certificates (REC’s), Marin failed to take advantage of an opportunity for real localization. A REC refers to unbundled green energy — an electron’s “green attribute” that is sold separately from the energy itself. Power companies like Marin Energy Authority buy REC’s to “green up” their own power portfolio. While there are benefits to this approach, including investment in renewable energy projects, some feel it is greenwashing.

“Local Power is planning to physically replace fossil fuels with renewable power in San Francisco, and will employ hundreds if not thousands of local people, down to the most disadvantaged in the city, in an effort to make their CCA ‘real’,” Mr. Schultz said.

Mr. Fenn expressed frustration over what he perceived to be a population trained by Cold War ideology into thinking that a green power revolution wasn’t possible. “Solar power doesn’t need to be more expensive than brown power,” he said. “That’s a myth.”

He said the hubris of Local Power lay in believing that they can rethink the entire energy landscape. “We could just continue to ask, ‘You stupid Taliban moron, how can you not believe in climate change?’” Mr. Fenn said. “But instead, we have answers. The subtext in every text on economic theory is energy.”