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Cape Cod Energy Strategy & Plan

As is the case almost everywhere, no single government agency or organization on Cape Cod has purview over energy supply, delivery, and use and its effects on economic, environmental, and social issues in individual communities and throughout Barnstable County. For several years, the Cape & Islands Renewable Energy Collaborative (CIREC) has been working to fill this vacuum by engaging diverse stakeholders in coordinated community planning processes (click here for information).

CIREC is a nonprofit, participatory entity through which individuals, organizations, businesses, and agencies are working together to promote a sustainable energy future. Representatives from Cape & Islands Self-Reliance, Cape Cod Community College, Cape Clean Air, Clean Energy Design, Waquoit Bay National Estuarine Research Reserve, Water Energy & Ecology Information Services, and Woods Hole Research Center are among the most active CIREC participants. They interact and collaborate frequently with the Cape Cod Commission, Cape Light Compact, and Cape Cod Economic Development Council, the agencies within Barnstable County's government structure that have the most influence on energy-related issues.

This page describes regional planning and decision-making processes with potential to shape Cape Cod's energy future:

Comprehensive Energy Strategy & Plan - Status
2006 Regional Policy Plan Update: Energy Element
Institutional Options: Municipal Aggregation & the Energy Cooperative Study

Visit the Sustainable Energy Calendar for information on upcoming events, and use the Civic Participation Guide to take action!

Comprehensive Energy Strategy & Plan - Status
For the past several years, CIREC participants have initiated diverse activities geared toward transforming the energy basis of the Cape & Islands region. This has included organized efforts to educate the public, promote energy efficiency, increase the use of sustainable design and green building practices, demonstrate renewable energy technologies, build a robust a clean energy sector, inform local and regional policymaking, and otherwise expand reliance on renewables.

In January 2006, members of the Cape Cod Economic Development Council (EDC) requested that its administrator send a letter to the Barnstable County Commissioners recommending that they direct the Cape Cod Commission and the Cape Light Compact to work with CIREC participants to create a comprehensive energy strategy and plan for Cape Cod. This strategy and plan would be institutionalized as an addendum to the Regional Policy Plan (RPP) for Barnstable County, which is currently being updated by the Commission.

The EDC decided to issue these planning and policymaking recommendations to the County Commissioners in response to a grant proposal from CIREC. This proposal outlined outreach, visioning, and options analysis activities, as well as follow-on efforts to develop a community-based energy strategy for Cape Cod. The proposal was developed in response to issues and needs identified during the "Beyond Cape Wind" stakeholder process in spring and summer 2005 and at the "Shaping Cape Cod's Energy Future" conference held in fall 2005. This conference highlighted the economic, environmental, and social opportunities associated with increased energy efficiency and increased reliance on renewable energy. It was organized by CIREC participants under funding provided by the EDC.

An energy strategy and plan for Cape Cod will need to complement—rather than be implemented within—the RPP for two reasons. First, the RPP focuses on resource protection, land use management, and development and redevelopment at the regional, local, and project levels. It does include an Energy element, and energy-related issues are relevant to other RPP elements addressing air quality, transportation, water quality, economic development, coastal resources, affordable housing, and other topics. However, the RPP is not intended to address energy in a comprehensive manner. Second, the current update of the RPP is scheduled to be completed in 2006, whereas energy-related visioning activities and public inquiry processes remain to be initiated.

Development of a community-based energy strategy and plan for Cape Cod will require significant time, substantial resources, and sustained involvement from diverse stakeholders. In addition to seeking EDC funding for coordinated planning activities, CIREC participants are attempting to secure financial support from the Massachusetts Technology Collaborative (MTC) and other sources. In the meantime, the Cape Cod Commission's updating of the RPP could help establish valuable context for follow-on work. In addition, the Cape Light Compact's study of an energy cooperative could help identify institutional solutions for addressing some of the energy issues facing local communities. Scroll down for background and status information on these activities and on the differing approaches being taken by these government agencies.

2006 Regional Policy Plan Update: Energy Element
Through the RPP, the Cape Cod Commission is charged with "the conservation and preservation of natural undeveloped areas, wildlife, flora and habitats for endangered species; the preservation of coastal resources including aquaculture; the protection of groundwater, surface water and ocean water quality, as well as the other natural resources of Cape Cod; balanced economic growth; the provision of adequate capital facilities, including transportation, water supply, and solid, sanitary and hazardous waste disposal facilities; the coordination of the provision of adequate capital facilities with the achievement of other goals; the development of an adequate supply of fair affordable housing; and the preservation of historical, cultural, archaeological, architectural, and recreational values." (Cape Cod Commission Act, 1989)

Despite this emphasis on resource protection, the 2002 RPP's Energy element focused largely on the high prices of energy commodities in local communities. These costs burden consumers, particularly those with low or fixed incomes, and they harm Cape Cod's economy. However, the Cape Cod Commission Act was not developed by local stakeholders and passed by the state legislature with issues like these in mind.

During the ongoing update of the RPP, the Commission has an opportunity to address this inconsistency. At a public hearing on February 1, 2006, the Commission solicited input from regional stakeholder groups on both the Energy and Air Quality elements of the RPP. In addition to Commission staff, representatives from the following organizations attended:

• Alliance to Protect Nantucket Sound
• Association to Preserve Cape Cod
• Cape Clean Air
• Cape Cod Economic Development Council
• Clean Power Now
• Waquoit Bay National Estuarine Research Reserve
• Water Energy & Ecology Information Services
• Woods Hole Research Center

The general consensus of attendees, most of whom are active CIREC participants, was that the Energy and Air Quality elements require a comprehensive reworking. Discussion focused on the need for the RPP to emphasize "true cost" issues such as climate change and pollution and on the need for explicit consideration of energy-related issues in other RPP elements. For developments of regional impact (DRIs) falling under the Commission's purview, discussion focused on the need for minimum performance standards relating to "beyond code" efficiency standards, renewable energy generation, and mitigation for pollutant and greenhouse gas emissions.

As of early July 2006, Commission staff have drafted a revised Energy section based on this hearing, data collected through the Cape Cod Sustainability Indicators Project, and input from the Commission's Planning Committee, the Cape Light Compact, and CIREC participants. Consistent with the Cape Cod Commission Act, the draft section emphasizes the impacts of energy supply and use on air quality, water quality, climate change, and other concerns. It is scheduled to go out for public review in summer 2006.

Institutional Options: Municipal Aggregation & Energy Cooperative Study
The Cape Light Compact was created to represent the interests of all electricity consumers on Cape Cod and Martha's Vineyard. Currently, it manages ratepayer-funded energy efficiency programs within its service territory, and it negotiates agreements to purchase power on behalf of local municipalities, as well as residential and business consumers. It also manages energy education programs in local elementary schools and advocates for consumers in legislative and regulatory proceedings at the state and federal levels.

The Compact has achieved some remarkable things since its inception. At present, however, tens of thousands of local residents and businesses are saddled with the highest electricity rates in the continental United States due largely to a combination of bad luck (Hurricane Katrina) and the Compact's inadequate attention to a core principle in the power supply business - risk management. The performance of the Compact's power supply procurement programs is further constrained by a variety of institutional factors (click here for information on challenges brought to the fore by local municipal wind initiatives). Many of these can be traced to its nature as a municipal aggregator, the only one to be established so far under the Massachusetts Electric Utility Restructuring Act of 1997. Others are attributable to the intergovernmental agreement that articulates its bylaws.

Since 2005, the Compact has been exploring the possibility of forming an electric "energy cooperative," as authorized under the state's restructuring act (M.G.L. Chapter 164, Section 136). This institutional arrangement, which has never been realized in Massachusetts, could offer a number of benefits:

1. Any energy consumer—residents, businesses, towns, etc.—can be a member of a cooperative and can take advantage of its services, and all of a cooperative's members are eligible to vote on its leadership. By contrast, the only members of the Compact are municipal consumers—the 21 Cape and Vineyard towns, along with Barnstable County and Dukes County—and the Compact's Governing Board is run by representatives who are appointed by municipal officials, rather than elected by voters. Under this institutional arrangement, municipal consumers have the opportunity to exert undue influence on the allocation of energy efficiency funds and on the setting of power supply rates, to the possible detriment of residential consumers and other commercial and industrial consumers. It also means that local residents are not allowed to choose whom to represent their interests. (In fact, the Compact has never surveyed local residents about their interests.)
   

2. A cooperative can purchase energy commodities at the wholesale level, allowing it to participate in wholesale markets and to buy directly from electricity generating facilities, including wind and other projects on or around Cape Cod. By contrast, the Compact can only purchase electricity at the retail level, meaning that it must enter into agreements with "middlemen," such as ConEdison Solutions, that are licensed to participate in wholesale supply markets. This institutional constraint precludes the Compact from securing the best market rate for electricity and from purchasing power directly from municipal wind and other projects.
   

3. A cooperative can be a bankable entity, capable of entering into long-term power purchase agreements, financing and owning energy supply and delivery infrastructure, and helping residents and other consumers invest in cleaner and green technologies. By contrast, the Compact is not bankable, meaning that it lacks the secured assets required (1) to enter into long-term power purchase agreements that may offer local consumers lower prices, cost certainty, and other benefits; (2) to enter into long-term power purchase agreements that may assist local developers in arranging favorable financial terms for municipal wind, cogeneration, and other energy projects; and (3) to finance the purchase, construction, and operation of energy facilities in the Cape & Islands region. This institutional constraint compels the Compact to buy power through short-term contracts, exposing consumers to market volatility. It also means that the Compact is not optimally positioned to assist towns, businesses, and residents in transforming their energy supply and use practices.

An energy cooperative could address the Compact's shortcomings and give "the power to the people" by allowing residents, businesses, and municipalities to gain more control over their energy futures. Inclusive and transparent public inquiry processes are needed to ensure that the issues, options, opportunities, and challenges associated with forming a cooperative are fully explored from all perspectives.

In November 2005, an initial legal analysis was completed by the Compact's counsel under funding from Barnstable County. This analysis, distributed to Compact Governing Board members, has been labeled confidential, and it has not been released to the public. Presentations and discussions at board meetings suggest that initial analysis focused on creating a cooperative with membership limited to Cape and Vineyard municipalities and with the public prevented from having direct influence on its governance. Based on this initial analysis, Compact Governing Board members approved further investigation.

To support a more detailed analysis, the Compact issued a request for proposals (RFP) in February 2006. The RFP specified a two-phase study, with funding of up to $100,000 to be provided by Barnstable County. Phase I will screen a range of possible functions, membership options, and governance structures to identify those having "fatal flaws" and those offering the most promise. Phase II will focus on detailed feasibility analysis and cost-benefit assessment of a set of cooperative models selected by the Compact. The RFP acknowledges that several possible membership structures exist, including one limited to include only Cape and Vineyard towns and counties; another expanded only to include other governmental entities; and a third extended to include some or all residential, commercial, and industrial consumers. The RFP indicates that the Compact will procure a separate legal analysis of factors influencing the feasibility of the third option.

As of early July 2006, findings from the Compact's initial legal analysis and its plans for the ongoing, more detailed analysis have not been released to the public, despite this work being funded by taxpayers/ratepayers and despite direct requests to the Compact's administrator. The Compact also has not responded to requests that the public be given opportunities to comment on Phase I results in advance of the initiation of the Phase II study. Phase 1 findings are scheduled for public airing at the September meeting of the Compact Governing Board, a forum the public is allowed to attend but not actively participate in.

Disclaimer: This page has been developed based on original research, the sources listed above, and an analysis of strategic issues. It is intended to be informative, not authoritative, with the goal being to support informed and transparent decision-making by putlic officials and the public at large. Readers are encouraged to air their opinions on these issues and to contact elected and appointed officials at the local, regional, and state levels with questions. See the "Civic Participation Guide" for tips.

Last updated 07.11.06