RECs effect: Council weighs how to spend $2.6 million in energy credits

By Evan Goodenow -

Check yourself before you REC yourself.

How to spend some $2.6 million in Renewable Energy Credits is being decided by city council members.

Council held a work session Monday attended by about 60 people to discuss RECs, also known as Renewable Energy Credits. RECs represent the property rights to renewable energy with each representing 1,000 killowatt hours, or one megawatt hour, according to the federal Environmental Protection Agency.

A megawatt — 1 million watts — provides energy to about 600 homes annually.

Created in the 1990s, RECs are used to encourage and track renewable energy use and sales and can be bundled or sold seperately from the electricity generated from the renewable source. Through swaps of higher-priced RECs for lower-priced ones, Oberlin’s RECs are expected to be worth about $2.6 million by year’s end, Steve Dupee, Oberlin Municipal Light and Power System executive director, told council.

Created in 1934, the utility is a not-for-profit entity owned by customers and designed to keep rates low. However, its goal of purchasing RECs to provide fossil-free electricity by 2050 — it’s expected to be 87 percent fossil free by next year — has been costly.

Dupee said renwable energy for 180,000 megawatt hours will cost $9.1 million next year compared to about $6 million for the same amount in 2013. The average residential customer in 2o13 paid about $900 annually and will pay $1,149 yearly in 2017, an approximately 27 percent increase.

Dupee said the money could be rebated to customers by temporarily lowering rates or it could be kept and used to find long-term savings for customers through clean energy.

Rebates would primarily benefit the 10 largest commercial ratepayers including Oberlin College, the Federal Aviaton Administation, the Kendal at Oberlin retirement community, and the Lorain County Joint Vocational School. Dupee said utility staff and Oberlin’s public utilities commission recommend a dual approach.

It calls for returning 85 percent of REC proceeds to customers through lower costs over an as-yet-undetermined time frame. The remainder of proceeeds would be used to improve energy efficiency and reduce carbon emissions. “Let’s take a reasonable portion of these funds and let’s try to leverage these dollars into long-term benefits to our customers,” Dupee said.

Several residents spoke in favor of long-term savings through energy efficiency investments rather than short-term rebates of about $100 annually.

Jeanne McKibben said rate reductions would reward customers for using more electricity rather than than helping those who’ve reduced use through green energy such as solar panels. She recommended investment in solar cooperatives for poor customers to reduce use.

McKibben noted the utility’s estimates for costs over the next several years were based on the same amount of usage. “Why aren’t we looking at reducing how much we’re (using) rather than giving it back to the customers?” she asked.

David Orr, an Oberlin College environmental studies and politics professor, said rebates would expire after three or four years and while the college would get about $500,000, residential customers would only get a small portion of the money.

Orr, founder of the Oberlin Project, a town/gown environmental initiative, recommended using the money to establish a community foundation dedicated to green energy. He said the foundation, which could be administered by local banks, could use the money to obtain matching funds.

“It would keep that money in the community working long-term to help the people who need it most,” Orr said. “It’s something that is a long-term solution to a pretty tough problem.”

However, resident Tony Three Eagle Cloud said he wants a full rebate. Eagle Cloud said he’s is a veteran on a fixed income and could use the extra money to buy food even if it’s only about $8 per month

“I want my money back,” he said. “I don’t think you people have the right to do just whatever you want with my money.”

Council president Ron Rimbert said after the meetinig that additional work sessions will be held to gather public input. He said a decision on RECs will be made by year’s end.

Evan Goodenow can be reached at 440-775-1611 or GoodenowNews on Twitter.

By Evan Goodenow