Evanston’s renewable energy powers homes in other states. Are new solutions local?

Evanston aims to become carbon neutral by 2050 — a goal that’s earned the city accolades as it navigates rising lake levels, extreme temperatures and insufficient infrastructure.

To achieve carbon neutrality, the city needs to counter its carbon use by removing an equal amount of carbon from the atmosphere, or by cutting emissions altogether.

For years, Evanston has relied on renewable energy to offset its greenhouse gas emissions. But much of the clean energy the city claims to use doesn’t change the amount of fossil fuels burned in Illinois. It’s produced and consumed out of state.

The city currently purchases energy credits from wind farms in North and South Dakota, according to Sustainability and Resilience Coordinator Cara Pratt. These credits, called Renewable Energy Certificates, allow cities to purchase units of renewable energy to offset their carbon emissions. However, using RECs doesn’t actually increase the share of renewable energy in Evanston’s local electric grid.

Clean energy advocates have criticized the city for its indirect approach. The Evanston Environment Board has debated REC use internally for several years, member Matt Cotter said.

“If our only strategy for low emissions energy is purchase of RECs, is that in the spirit of reducing our emissions?” Cotter asked.

But if city government chooses to move away from this system, finding alternatives that reduce emissions as effectively could be a challenge. According to Evanston’s current environmental plans — the Climate Action and Resilience Plan — all city-owned facilities should use 100% renewable energy by 2030.

Residents have called out the city for its inaction. In response, City Council declared a climate emergency last spring to prioritize clean energy through legislation.

Still, RECs have sparked confusion and controversy in Evanston and beyond. Many residents say they’re unsure how the city’s renewable energy system works, and some have discussed more community-oriented and financially accessible energy networks.

Now, advocates are searching for more direct solutions to Evanston’s clean energy puzzle.

How does the current system work?

More than 7,500 Evanston residents are enrolled in the city’s community choice aggregation program, according to city records obtained by The Daily. The program connects residents to renewable energy — but it does so by purchasing RECs. Evanston’s CCA began operating in 2012 and is the city’s most widely used renewable energy system.

Illinois has a deregulated energy market, which means actual energy providers are separate from the suppliers listed on residents’ energy bills.

Residents on the CCA still use energy distributed by ComEd, Evanston’s utility company that delivers energy to residents and handles payment. It’s the energy supplier itself that changes — the city purchases RECs from a supplier, and in exchange the city’s name is attached to that clean energy production.

Under a CCA, the Utilities Commission finds an Alternative Retail Electric Supplier on behalf of eligible residential and small commercial energy users in the network. All of these accounts are then opted in to the network.

“Aggregation … allowed municipalities to negotiate on behalf of everybody in their community, and sign up the entire community with an ARES for a better rate,” Ald. Jonathan Nieuwsma (4th) said. “In one fell swoop, you sweep everybody in the community into a better deal.”

Individual users can shop around and choose their own energy supplier if they want, according to Citizens’ Greener Evanston board member Joel Freeman. But residents and small businesses often struggle to find the best deals on their own.

Negotiating on a citywide level through a CCA increases buying power and can help residents and small businesses get “the same shopping advantages as the big guys,” Freeman said.

To form a CCA, the city engages in a competitive bidding process. Evanston’s past contracts have usually lasted between one and three years. Residents can opt out of the CCA at any point, but risk a shift in their energy rates.

As a result, for some Illinois towns buying green is no longer worth the potential cost.

ComEd rates fluctuate, which doesn’t always benefit CCAs. The company’s rates were artificially high in the late 2000s and early 2010s, Nieuwsma said, but they eventually stabilized, becoming more affordable than some CCA rates. Some towns that opted into the fixed-rate program while ComEd prices were high regretted the decision.

Over the years, price fluctuation has prompted many Illinois municipalities to shut down their CCAs. Across the state, 746 local governments have had CCAs, according to a database from Plug In Illinois. About 43% of these contracts are expired or set to expire, according to data last updated in October.

Evanston never let its CCA go defunct, mainly because it created significant carbon offsets. Without the CCA, the city wouldn’t be close to reaching its climate action goals, according to a 2019 CGE presentation.

So when Evanston’s last CCA contract expired in 2020, city officials needed to maintain residents’ access to clean energy without exceeding ComEd rates, Nieuwsma said.

MC Squared: A new solution?

In April 2021, homeowners and small business owners across Evanston opened their mailboxes to find flyers with an announcement from the city. They were now under a new CCA supplier: MC Squared Energy Services.

Evanston resident Jim Janecek said his neighbors seemed confused about the nature of the program when they first received these flyers, but he figured out he was connected to the CCA.

Later that year, a change came.

“Six months later, we were told that for some reason, we didn’t qualify,” he said. “I don’t remember what the reason was, but they switched us back to ComEd.”

The transition from the CCA back to ComEd as an energy supplier was “seamless,” Janecek said. MC Squared’s program is different from past ARES programs because it uses a ComEd price match. Customers pay the same rates whether or not they are connected to the CCA. The price match lasts throughout the city’s 30-month contract with MC Squared, so Janecek’s energy bill did not change when he was dropped from the program.

Still, city officials remember resident confusion about the new system.

“Everybody in the community got confusing postcards that (said things) like, ‘Hey, you’re in,’ or, ‘You’re out,” Nieuwsma said. “I got a lot of calls like, ‘Hey, what’s this? What’s going on?’ Not having been a part of the discussion, I wasn’t even sure myself.”

According to Ann DeBortoli, director of sales and marketing for MC Squared, this price match system is meant to eliminate the risk of ComEd rates dropping below a city’s CCA rate.

“Although some towns did fixed-rate (programs), many did not want to do it for fear that the ComEd rate would be lower, and their town residents would be on a municipal aggregation with a rate that was higher,” DeBortoli said. “So we sort of switched gears.”

Yet MC Squared’s system comes with tradeoffs. Because MC Squared is limited by ComEd’s pricing, not all residents are automatically opted into the program anymore — and they don’t have final say in whether they stay.

MC Squared conducts a review of its customers when ComEd rates are updated each year, DeBortoli said. Based on who MC Squared deems eligible, residents can be added to or dropped from the CCA.

DeBortoli said this may have been the source of initial confusion, because energy users received varying messages about their status in the program.

“(The review is done) to see who should be on the program to the benefit of the town,” DeBortoli said.

She declined to say how the review was conducted, saying the knowledge was “proprietary.”

The Daily also requested records of a ward-by-ward breakdown for which accounts were on the CCA, but the city said MC Squared only tracks citywide data.

According to city records, nearly 30,000 accounts are eligible for Evanston’s CCA. Yet today, only about 7,650 of those accounts are technically on the system.

“The majority of people that I spoke to really wanted to be a part of the program, and there was some frustration that they weren’t automatically included,” Pratt said.

Under MC Squared, the funding for Evanston’s CCA comes from an annual $500,000 community grant through 2024, the ending year of the current contract. The city has full discretion in how it spends this money, and it can use the grant to purchase RECs or fund other community sustainability projects.

For the past two years, Pratt said Evanston has used a portion of this grant funding to buy RECs for all of the eligible accounts, even those not technically part of the system.

Because of this, the city still purchases nearly 30,000 accounts worth of renewable energy even though the CCA covers less than 8,000. The main change is the messaging residents receive, and which homes are covered under MC Squared versus on the extra credits. Though it’s confusing to residents, ultimately the outcome is consistent.

‘A legal fiction’

For many clean energy advocates, the biggest problem with CCAs isn’t how residents join the program. It’s the source of energy itself.

The amount of gas-fired, nuclear or coal-fired energy used in the city did not change when Evanston began purchasing RECs, former CGE president Hal Sprague said.

Houses on a CCA aren’t directly powered by clean energy. Instead, part of residents’ energy bills goes toward buying RECs. Each REC represents one megawatt-hour of renewable energy produced by a clean energy supplier, like a solar or wind farm.

These suppliers can produce energy anywhere, whether right next door or states away. Energy providers located outside of northern Illinois — such as Evanston’s suppliers in North and South Dakota — don’t directly impact the local grid, even though they benefit clean energy at large.

Suppliers use the funds from selling RECs to cities like Evanston to maintain their energy facilities, among other projects. In return, whoever buys these RECs gets to take credit for sponsoring however many units of energy they bought.

The problem? There’s no way to track how much clean energy actually goes to Evanston homes, even if the city pays for RECs.

Clean energy generated by suppliers flows into the electric grid local to the energy production facility, entering what Sprague described as a “pool of electrons.” Evanston’s “pool” comes from the electricity generated by ComEd energy suppliers in northern Illinois.

“When I turn my lights on, I’m getting (ComEd’s) electricity potentially from any of a number of different sources,” Sprague said.

Just 5% of ComEd electricity comes from solar, wind and hydro power, according to ComEd’s 2020-21 environmental disclosure report. Nuclear power accounts for 34%, while 38% and 22% comes from gas-fired and coal-fired power, respectively. The remaining 1% comes from other sources.

Residents on Evanston’s CCA still power their homes with the same ComEd energy as other residents.

The only difference is that because Evanston purchased the RECs, the city has “the legal authority to pat (itself) on the back and claim legally that (it) used 100% renewable energy,” Sprague said.

“(RECs) are a legal fiction,” he said.

Though they don’t actually change the amount of fossil fuels being burned locally, RECs create a major carbon offset on paper. The city subtracts the MWh of RECs purchased annually from the MWh of energy used citywide.

According to a 2019 presentation by CGE, RECs accounted for 44.8% of Evanston’s emission reduction from 2005 to 2017. This represents a significant proportion of Evanston’s carbon offsets from its carbon footprint, Pratt said, as the elimination of RECs would have resulted in a 2% increase in citywide carbon emissions from 2020 to 2021.

As a result, removing RECs from Evanston’s clean energy plan could derail efforts to achieve carbon neutrality by 2050.

But Pratt said the city’s Environment Board and Utilities Commission “have expressed interest in thinking about alternatives to purchasing RECs.”

MC Squared provides flexibility to find such alternatives, Pratt said. DeBortoli emphasized MC Squared has no say in how the community grant is allocated — the decision is entirely up to Evanston.

Shifting gears

With pressure mounting for Evanston to meet its CARP emission reduction goals, the city is searching for more direct sources of carbon offsets.

The proposed 2023 city budget places another $600,000 into the sustainability fund. In her October presentation, Pratt emphasized the need for a long-term solution to Evanston’s energy issues.

In 2021 and 2022, the city voted to purchase as many RECs as necessary to power the entire CCA, allocating the leftover grant money to fund CARP. The Environment Board is actively discussing alternative sources of renewable energy if Evanston stops purchasing RECs, Cotter said.

Finding a new carbon offset is no small feat. Despite the drawbacks, Pratt said purchasing RECs is “the most impactful thing we could do for our greenhouse gas emissions reduction.”

If the city wasn’t using RECs, she said, “(we would) have fewer subtractions from our carbon footprint, which could mean that we would sort of flatline as a community in terms of our reductions.”

But Cotter and Pratt both emphasized that the city wants to find a more direct way to get Evanston on renewables — even if its carbon offsets take a hit.

“What residents have started to express to me is that we want to see the impact here in Evanston,” Pratt said. “We want to see how this program really tangibly benefits us, instead of just numbers on a piece of paper that tell us that we’re getting renewable electricity.”

If not RECs, then what?

Kady McFadden, who moved to Evanston three years ago, has worked with the Illinois Clean Jobs Coalition to pass sweeping statewide energy legislation for the past eight years.

Through her work, she said she found “residents wanted to be able to feel like their sources of energy were closer to them … but they also wanted clean energy that was (on) the scale of communities.”

Connecting Illinois communities to clean energy has become far easier in recent years. When she moved to Evanston, McFadden said she was excited to leverage initiatives like the city’s community solar program. Under a community solar project, customers can “subscribe” to a solar farm in their area and receive savings on their energy bills for the solar electricity.

“Right now, because we have this bold leadership at the state level, we have this brand new climate law, we have a lot more tools in our toolbox as to ways that the city itself, but also the residents, can actually access and be part of the clean energy economy here,” McFadden said.

Many of these alternatives draw on two pieces of statewide legislation: the Future Energy Jobs Act, passed in 2016, and the Climate and Equitable Jobs Act, passed in 2021.

Both acts helped put Illinois on the map as one of the most progressive states for energy policy. CEJA drastically expanded incentives to purchase renewable energy for low-income customers. It also aimed to create job growth in the renewable energy industry.

Grassroots efforts drove these passages, according to Tessine Murji, a conservation organizer with Illinois Sierra Club who helped advocate for CEJA’s passage.

“We had community conversations five-plus years ago around the state, even just to build the policy, so Illinoisans had input from the start,” Murji said. “It was a community process, and being part of that process was the reason why folks were so dedicated.”

FEJA also created Illinois’ community solar program. In Evanston, 224 residents or small commercial entities use community solar, according to city records obtained by The Daily. The program is also operated by MC Squared.

Subscribers to the city’s community solar program are currently guaranteed a 20% savings from community solar credits on their energy bill.

Community solar projects have to be in the same region as their energy utility provider so they can be on the same grid. For example, a solar farm powering a project in Evanston must be within the northern Illinois ComEd region.

These projects also increase the amount of clean energy in the local grid, which Sprague said is another big benefit.

“If we want to be doing good environmental stuff here, we want to be supporting something that’s as local as we can,” Sprague said.

Pratt said city officials want to expand community solar and potentially phase out RECs as the city’s main carbon offset — but consumer demand remains key.

Resident interest directly drives the construction of new renewable projects under community solar — a local impact not felt under CCAs. Though this allows consumers to influence their grid, it also means community solar projects have limited slots.

Evanston residents must join a “reservation list” to enroll in the program, according to MC Squared. Depending on project capacity, residents can wait from a week to a few months before connecting to community solar, according to Sharon Alegado, MC Squared’s manager of regional sales and community solar.

McFadden and Cotter are both subscribed to Evanston’s community solar program. They think it’s among the best alternatives to purchasing RECs.

“Community solar is a really great (program) for residents who want to make an impact on climate, but also ensure that there’s demand for clean energy that is built right here in Illinois, and also want to save money,” McFadden said.

Obstacles to outreach

A main barrier to the program’s growth is getting the word out. Towns can’t sign residents up automatically for community solar like they can for electricity CCAs — community members have to voluntarily opt in to the program.

This means residents need some knowledge of community solar’s benefits. Providing this education can be a challenge, according to Myriam Perez, the energy outreach coordinator and organizer for Rogers Park food justice group A Just Harvest.

“There’s been predatory sales based on (solar energy),” Perez said. “To build trust around that is very difficult.”

Evanston and ComEd have both warned residents to watch out for scammers, who often offer homeowners low-cost renewable energy deals in an attempt to steal their personal information.

Perez currently works as a grassroots educator, teaching residents about statewide solar incentives as part of Illinois Solar for All. Created under FEJA, Solar for All provides savings and subsidies for low-income customers interested in community solar or rooftop solar panels.

Residents in parts of Evanston’s 2nd, 5th and 8th wards qualify for income-based benefits under Solar For All. Non-income qualified residents can receive separate solar incentives through Illinois Shines.

These community solar incentives aim to make solar more accessible for renters and people who live in apartment complexes, so they don’t need solar panels on their roofs to participate, Perez said.

Evanston is also looking to implement its own Accessible Solar Program, which would help with rooftop solar panel installation costs, as one of its 2023 CARP action items.

Looking ahead, Nieuwsma said the city wants to find a way to aggregate residents on to community solar. He said combining the local energy source of community solar with aggregation would be a viable option, though it’s not legal yet.

As support grows for more direct methods of decarbonization, McFadden said the city can’t sit back and wait for the opportunity — it needs to take action.

“Advocates would need to hear from communities like Evanston that this is something that they would like to see changed,” she said. “If Evanston were to speak out, I think that would help the advocacy community to take note.”

Email: [email protected]

Twitter: @lilylcarey

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