Recently, I had an opportunity to talk with Paul Fenn, who has written or helped write several pioneering pieces of legislation which allow communities to aggregate their electricity purchasing power in order to choose renewable energy. This policy framework is called community choice aggregation, or CCA (of course, if I mangle any of the specifics, it will be from my own lack of understanding).
When a CCA is created, the city or town or county can contract with an energy service provider (ESP) to provide the power for all residents of the area, if the residents so choose (so far, only about 5 percent of residents haven't signed up with various CCAs).
In the case of the San Francisco CCA, the electricity service provider (ESP) will produce 360 megawatts over three years: 103 from distributed renewables, mostly PV on buildings; 150 from a wind farm; and 107 from conservation and efficiency. That should constitute 51 percent of San Francisco's electricity needs (up to 20 states are pursuing CCAs). The utility still provides the transmission lines, billing, and electricity backup.
In 2001, San Francisco voters also passed a proposition to allow for "solar bonds" to be issued by the city (with an assist from Adam Browning's VoteSolar Initiative). These bonds will be used to construct the wind and solar electricity generating equipment and "smart grid" equipment which will be paid back by the revenue from the electric bills of the San Francisco residents who are part of the CCA. This mechanism gets around the biggest problem we've had with building wind and solar electrical generating capacity -- the lack of upfront capital.