Community Choice Aggregation

Community Choice Aggregation
Name	Community Choice Aggregation
Established	1990s
Type	Energy procurement model
Country	United States

Community Choice Aggregation

Community Choice Aggregation enables local jurisdictions to procure electricity supply on behalf of residents and businesses while retaining transmission and distribution under incumbent utilities. Modeled in the 1990s and adopted widely in multiple states, it intersects with state legislation, municipal authorities, and regional grid operators to advance renewable procurement, competitive pricing, and local energy programs.

Overview

Community Choice Aggregation operates where municipalities or counties form joint powers authorities or local agencies to aggregate demand and contract for electricity supply. Prominent institutional actors and legal touchpoints include California Public Utilities Commission, Massachusetts Department of Public Utilities, New Jersey Board of Public Utilities, Connecticut Department of Energy and Environmental Protection, New York State Energy Research and Development Authority, Bay Area Air Quality Management District, Bay Area Rapid Transit, and large investor-owned utilities like Pacific Gas and Electric Company, Southern California Edison, Consolidated Edison, National Grid (United Kingdom), and Exelon. Aggregations commonly interact with regional transmission organizations and independent system operators such as California Independent System Operator, PJM Interconnection, New York Independent System Operator, Midcontinent Independent System Operator, ISO New England, and Electric Reliability Council of Texas. Legal precedents and enabling statutes originate from legislatures and governors including actions under administrations like California Governor Jerry Brown and legislative initiatives tied to figures such as Senator Dianne Feinstein and Assemblymember Jim Wood.

Legal and Regulatory Framework

Statutory enabling frameworks vary by state, with landmark laws enacted by state legislatures and signed by governors in places including California State Legislature, Massachusetts General Court, New Jersey Legislature, and Rhode Island General Assembly. Regulatory oversight often involves public utility commissions such as the California Public Utilities Commission and adjudication in courts exemplified by cases heard before state supreme courts like the California Supreme Court and appellate bodies influenced by rulings from jurists comparable to Chief Justice Ronald M. George. Program compliance interfaces with federal regulatory actors including the Federal Energy Regulatory Commission and environmental regulators such as the Environmental Protection Agency. Interactions with market rules and wholesale procurement involve coordination with regional market operators including PJM Interconnection and California Independent System Operator, and procurement practices must account for mandates under statutes and programs like Renewable Portfolio Standard (California), Global Warming Solutions Act of 2006, and state clean energy targets championed by public figures such as Governor Gavin Newsom and policy advisors with ties to organizations like The Sierra Club and Natural Resources Defense Council.

Operational Models and Program Design

Agencies adopt operational models ranging from basic default supply procurement to enhanced 100 percent renewable opt-up products, often structured by procurement teams and managed by service providers including energy suppliers, scheduling coordinators, and third-party administrators modeled on entities like Municipal Utility Districts and joint powers authorities such as East Bay Community Energy. Financial and contracting tools include power purchase agreements with developers like NextEra Energy, Iberdrola, Ørsted, Avangrid, and TransAlta Renewables and participation in wholesale markets administered by PJM Interconnection and CAISO. Program design incorporates rate-setting and customer notices subject to oversight by agencies such as the Public Utilities Commission and partnerships with municipal actors including mayors and county supervisors influenced by officials like San Francisco Mayor London Breed or Los Angeles Mayor Eric Garcetti. Resource portfolios often feature procurement from projects developed by firms similar to Vestas, Siemens Gamesa, First Solar, SunPower Corporation, and community solar projects in collaboration with organizations such as GRID Alternatives and SolarCity (now part of Tesla, Inc.).

Economic and Environmental Impacts

Economic impacts are assessed through rate comparisons and local economic development metrics involving stakeholders including utilities like Pacific Gas and Electric Company and investors such as BlackRock. Analyses reference avoided cost methodologies similar to those used by Lazard and integrated resource planning approaches practiced by utilities such as Dominion Energy and Duke Energy. Environmental outcomes tie to emissions accounting frameworks used by agencies like the California Air Resources Board and programs such as Cap-and-Trade Program (California), with procurement shaping investment in renewables operated by developers like NextEra Energy and Iberdrola. Metrics on greenhouse gas reductions and air quality draw on studies from institutions like Lawrence Berkeley National Laboratory, National Renewable Energy Laboratory, Stanford University, University of California, Berkeley, and policy analysis groups such as Resources for the Future and The Brookings Institution.

Implementation Challenges and Criticisms

Critiques arise over cost risk, exit fees imposed by investor-owned utilities such as Pacific Gas and Electric Company and Southern California Edison, regulatory complexity adjudicated by bodies like the California Public Utilities Commission, and governance concerns in joint powers authorities resembling structures such as East Bay Community Energy. Concerns about resource adequacy, capacity markets, and procurement in markets overseen by PJM Interconnection and CAISO highlight risks of market exposure and reliability obligations. Legal challenges and lobbying involving utilities and trade associations like Edison Electric Institute and American Public Power Association have prompted litigation and legislative responses shaped by policymakers including state governors and legislators. Equity and consumer protection debates cite advocacy by groups such as The Sierra Club, Natural Resources Defense Council, AARP, and local community organizations in cities like San Jose, California, San Francisco, and Los Angeles.

Case Studies and Regional Examples

Notable implementations include programs in jurisdictions like San Francisco, San Jose, California, Oakland, California, Berkeley, California, Monterey Bay Community Power jurisdictions, MCE (formerly Marin Clean Energy), Lancaster, California and statewide initiatives in Massachusetts and Rhode Island. Comparative examples reference interactions with utilities such as Pacific Gas and Electric Company and market operators like California Independent System Operator and PJM Interconnection. International comparators and related municipal aggregation concepts appear in contexts involving municipal utilities like Los Angeles Department of Water and Power and national-level market reforms linked to actors such as European Commission energy policy and corporations including Iberdrola and EDF (Électricité de France).

Category:Energy policy