As congressional Democrats struggle to pass an infrastructure bill containing any climate initiatives, it has become even more important for cities and states to address the very real climate catastrophe looming on the horizon. Cities are much nimbler than Congress and are more capable of implementing climate policy through local laws and policy initiatives.
First, How Much (Political) Power Does the City Have?
The climate tools available to a city depend both on the type of utility providing service to the city and, perhaps more importantly, the state laws governing renewable energy (RE) and local governmental control.
In a “Home rule” state, cities have more autonomy to implement climate policy, whereas cities in “Dillon’s Rule” states only have power to implement actions that fall within express delegated authority and will need to be more strategic in climate planning.
Other factors include whether a state has a deregulated energy market (provides competition); offers distributed renewable energy generation (option to buy back customer-produced RE), offers community choice aggregation, and establishes a mandate for its utilities to increase RE (also known as a renewable portfolio standard).
To help local decision-makers navigate the morass of applicable state policies, Lawyers for Good Government (L4GG) has produced state profiles for several states that provide an overview of relevant laws affecting local climate action.
Once a municipality understands the legal landscape, it can determine the portfolio of climate tools available. Ideally, these tools would be identified cohesively in a climate action plan that establishes clear, achievable greenhouse gas targets with a road map of how to get there.
Implementing Change: The City Tool Kit
Greenhouse gas targets mean precious little without taking concrete actions to achieve these targets. Below are a few of the effective tools cities can use to reach climate goals and are by no means exhaustive. The tools available to each city will vary greatly depending upon the factors referenced above, its size, political leaning, budget, etc., and should be assessed internally with in-house legal counsel.
Land Use Planning. A city can leverage its expansive land use authority to require carbon-reduction in new construction projects, i.e. green/solar roofs, LEED building standards, providing electric vehicle (EV) hook ups, etc., and can incorporate adaptation planning into new projects, including measures to address sea level rise, wildfires, and flood and storm protection. Options may be more limited in states with stricter state building codes, but cities in such states can still entice green design through expedited permitting review or financial incentives.
Incentives for RE Creation. To incentivize RE installations (solar roofs, electric vehicle charging), cities can offer tax credits, property tax exemptions, and zero-interest loans. A city also may create a net metering program to promote both individual and community RE projects, including buy-back options for customers who produce excess energy. These incentives will depend upon available budget and state law, although RE-friendly states may offer funding to cities through state net metering and other programs.
Community Choice Aggregation (CCA). CCA is a state policy that allows municipalities to select an electricity provider on behalf of its customers. CCAs generally provide the opportunity for cities to negotiate lower rates and larger RE portfolios with their utility providers. CCAs have been enabled by 10state legislatures,and are being considered in five more.
Tools for Municipal Operations
Electric Vehicle Infrastructure & Fleet. Most municipalities have a large vehicle fleet primed for upgrade to higher fuel standards. By constructing EV charging stations throughout its jurisdiction, a city will not only service its upgraded fleet, but will encourage private EV purchases and will bring new construction jobs to the city.
Improvements to mass transit systems will help take passenger cars off the road and will also provide new job opportunities. Approximately ⅓ of the GHG emissions produced in the U.S. come from the transportation sector. If Biden is successful in his bid to include EV funding in the American Jobs Plan, cities may have a massive new funding source for implementing such changes and creating such jobs. State funding may also be available.
Greening Municipal Facilities. Similarly, cities can upgrade municipal buildings and facilities to be more energy efficient and can plant trees and urban gardens on city property to promote greener living and help trap GHGs. These tools pose few legal hurdles as cities maintain fairly extensive authority over their municipal property.
Unless the city is a municipal utility, they will have little direct control over their utility provider. There are a few tricks a city can use to directly and indirectly increase its utility’s RE portfolio.
Agreement Negotiations. A utility typically needs local authority through a franchise agreement to use city streets for its distribution system (poles and wires). Cities with expiring franchise agreements have an opportunity to renegotiate with the utility to increase RE. Similarly, a city can renegotiate its procurement contract with the utility as it expires to include more RE sources.
Leveraging Tax Authority. A city with taxing authority over its utility may be able to raise revenue from utilities for RE projects.
PPAs, VPPAs, and Variable-Priced RECs. Depending on state law, cities can work with independent RE power producers to directly procure electricity through power purchase agreements (PPAs) to finance new renewable projects. In addition, virtual PPAs (which historically exist in the private space) can potentially be used by city procurement groups to help finance regional renewable projects and create RE credits (RECs) to meet GHG targets.
If a public procurement group is successful in funding third-party RE projects, it may foster competition and entice a more traditional investor-owned utility in a conservative state to increase its RE portfolio. To date, L4GG has trained and assisted procurement groups from 34 cities in 7 states regarding the legal viability of using such tools.
So Many Options, So Little Time
The available toolkit for each city will depend upon a number of factors, but there are many ways for cities to work towards aggressive GHG targets. Given the planetary imperative to take action as quickly as possible to protect our only home for future generations, all available strategies must be considered … and fast. There is literally no time to waste and no Planet B.
This column does not necessarily reflect the opinion of The Bureau of National Affairs, Inc. or its owners.
Jillian Blanchard is the director of the Lawyers for Good Government’s Climate Change Program. She manages almost 300 lawyers nationwide working with nonprofit partners to provide guidance to U.S. cities to expedite the shift to 100% renewable energy. She is also the managing partner of the Rudder Law Group, a boutique, women-owned law firm in the San Francisco Bay Area where she specializes in energy, natural resources, and land use law.