As of fall 2020, the energy aggregation program serves between 75,000 and 80,000 accounts, most of which are residential customers. Annual procurement of renewable energy for these accounts currently stands at 750 to 800 megawatt-hours annually. This amount is approximately 300 percent greater than the City’s own energy procurement for municipal activities and makes the energy aggregation program the fourth-largest green energy aggregation program in the United States. Through the energy aggregation program, Cincinnati consistently procures power at a cost savings of 10 percent over local utility options. For example, through the energy aggregation program, the City of Cincinnati saved residents $1.5 million on electricity and $2 million on natural gas in 2016. Further, by procuring renewable energy certificates, the City provides green energy to nearly 80,000 residents and abates 250,000 tons of carbon dioxide each year.
Using the program, the City is also able to procure Renewable Energy Certificates. These certificates allow the City to offset 250,000 tons of carbon dioxide.
Public support also made this project possible. In Cincinnati, residents needed to see that energy aggregation is not a government seizure of power. To ease fears, City officials reminded residents that they still had the ability to opt out and choose their own energy suppliers if they did not want to participate in the program.
Next, Cincinnati plans to improve energy efficiency in its renewable power supplies by installing 310,000 solar panels within City limits, which will produce 100 megawatts of local solar power. To avoid cost liability for the solar farm if the energy aggregation program suddenly ends, Cincinnati will enter into nine-year contract(s) with solar provider(s), who can recoup the solar installation cost by selling power on the open market if the City no longer buys it.
Challenges
With tens of thousands of participating residents, the primary challenge in managing the energy aggregation program is simply the size of the program. While the program does not face many challenges in its day-to-day operation, the bid process is long, complicated, and can present a significant burden to program managers. Energy markets and prices are constantly in flux, so managers must make decisions on bids and come to an agreement in a matter of days or even hours. These challenges are especially true in 2020 for Cincinnati as the energy aggregation program begins to move into its next phase that includes the large solar field.
Another issue at the outset was low participation rates in voluntary municipal programs, especially when residents must opt in. To work around this issue, Cincinnati automatically opts its residents into the energy aggregation program and allows residents to leave by responding to opt out letters sent in the mail.
Takeaway Message
Given that the energy aggregation program spans the entire city of Cincinnati, proper alignment of leadership is key. There is a vital need for facilitators in government to connect across departments and have “open doors” for the project to succeed. Michael Forester, Cincinnati’s Director of Sustainability gave the following advice: “Launching and maintaining the energy aggregation program depends on partnerships with industry and other non-government partners, so it is essential to include affected parties in any negotiation and deal-making processes.”
