Community Choice Aggregation (CCA), while created in California almost 15 years ago, is gaining momentum as a new program that allows communities greater control over their energy supply, while reducing greenhouse gas emissions, lowering electricity prices, and generating substantial money for municipalities. It’s a rare triple-win for municipalities that have seen electric bills for the same dirty energy jump as much as 10 percent annually.
CCA enables cities and towns to exercise their right to control what kind of power they want to use in their community, without the burden of putting up new power lines or making any changes in infrastructure. The existing utility continues to supply power, maintain the grid, and handle billing and other services for customers. Although CCA met considerable push back initially from the utilities, the Public Utilities Commission have consistently backed original CCA law, which restricts the utility from interfering with the formation of community choice programs, and prevents the utility from diminishing the quality of services.
What currently happens is your utility decides which energy generators to use to supply power to its customers. The alternative is for the participating community to decide when the municipality aggregates the customers in its area to create a CCA program. They can decide how much of their energy will come from fossil fuels, or from renewable sources like solar, wind, or geothermal. A CCA also sets the energy rates for customers—their community’s residents and businesses. The municipality then balances these three benefits— increased renewable energy, municipal revenue, and energy rates—to reflect local priorities.
California is certainly not alone. Community Choice Aggregation is presently in Illinois, Massachusetts, New Jersey, Ohio and Rhode Island, and New York recently began its own CCA pilot program. Participating communities in these states are already reaping the benefits of CCA. For example, Chicago implemented a CCA program in 2012 to reduce air pollution, and was able to slash its use of coal power from 40 percent to zero, according to a 2014 report by the Go Lean, Go Local Coalition.
CCAs can not only reduce greenhouse gas emissions and combat climate change while meeting environmental requirements and goals, but can also jump-start economic growth, both nationally and locally. CCA increases the demand for renewable energy, which spurs growth from clean energy generators. By driving investment in local clean energy sources, CCAs can create jobs, and power a sustainable economy.
In California, CCA is the “default” program, meaning that as soon as a municipality establishes its program, the CCA is the default electricity provider. However, every ratepayer has a choice; each can always opt out, switching their individual service back to the utility. The automatic enrollment makes the CCA instantly viable, and high levels of participation help keep the program financially healthy. In areas where the local CCA reflects local values, the existing programs have proven to be immensely popular.
Despite the wide variety of benefits, communities considering these programs can run into significant setbacks.
The biggest hurdle, by far is financing. To establish a CCA program, the city or county must produce substantial funds to pay for development and operational costs. Additionally, municipalities have many competing priorities, with limited resources and expertise in this area. Further, communities under approximately 100,000 in population are likely not large enough to create the millions of dollars needed in program revenue to support a new government agency.
The only option smaller communities felt they had was to join another CCA, but this method has two significant drawbacks: it precludes localities from earning millions in revenue a year, and provides little say over its services. Thus, joining another CCA seems akin to joining another utility.
Our benefit corporation, California Clean Power, was established out of a desire within the CCA community to help communities overcome these hurdles—allowing them to bring in the funding and independence that CCAs were designed to deliver. With our unique offering of independent financing and operations by experts in the CCA field, we can help communities of all sizes and economic levels smoothly adopt their own local CCA program.
The benefits of a CCA are abundant. They deliver compelling value on every level, from more clean energy, to lower electricity rates, to valuable financial boosts to the community. CCA puts communities back in control of their power. And that’s really where the power should belong.
Peter Rumble is CEO of California Clean Power and serves as the Chair of the Leadership Institute for Ecology and the Economy, and was named among the North Bay’s “40 Business Leaders under age 40” in 2014. He can be reached at www.cacleanpower.com.