Abstract

Communities across the United States are taking advantage of new technologies and governance forms to assert greater control over their energy systems. For decades, energy provision throughout much of the nation was heavily centralized. Even where market-oriented reforms emerged, most consumers had little ability to take advantage of the changes. But resurgent interest in municipal takeover of energy systems, alongside new phenomena such as community choice aggregation and microgrid construction, are making what we call “community energy exit” a reality. Popular and academic commentators have hailed these developments as key steps toward decarbonization, social justice, and energy democracy.

This Article raises cautionary notes about the emerging changes. Although they can bring important benefits, community-centered energy systems could also generate systemic inequities. Traditional energy systems, despite all their flaws, also contain mechanisms for sharing the benefits and burdens of energy provision. When communities exit traditional systems, those mechanisms can be undermined or even lost. Inequities may also arise because local governance, despite its many virtues, can build and entrench social inequality. Important pressure on incumbent utilities, in public utility commission proceedings and other fora, also could be lost if communities elect exit over voice.

Beyond raising theoretical concerns, this Article explores emerging evidence from actual energy exits. The preliminary story is more nuanced than either the celebratory or critical accounts would suggest, partly because communities, legislators, and administrators in key states have taken concrete steps to avoid some of the inequities we fear. Without adequate legal oversight, however, future expansion could devolve into a form of energy elitism. The Article closes by summarizing and recommending ways to facilitate equity in community energy exits.

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