community choice aggregation

community choice aggregation
Name	Community choice aggregation
Othernames	CCA
Established	1990s
Jurisdiction	Localities
Type	Energy procurement program

community choice aggregation

Community choice aggregation (CCA) is a model for local jurisdictions to procure electricity on behalf of retail customers while Pacific Gas and Electric Company or similar investor-owned utilities continue to deliver power and maintain distribution. Municipalities, counties, and special districts form CCAs to select generation sources, negotiate supply contracts, and set rates, interacting with entities such as California Public Utilities Commission, New Jersey Board of Public Utilities, and regional transmission organizations like California Independent System Operator and PJM Interconnection. Early adopters include Marin County, Sonoma County, and San Francisco, and the model has influenced programs in Massachusetts, Ohio, and Illinois.

Overview

Community choice aggregation programs aggregate the electricity demand of participating customers in a municipality or county and procure generation and renewable attributes through bilateral contracts, power purchase agreements, and market purchases with counterparties such as NextEra Energy, Shell Energy, and AES Corporation. CCAs typically coordinate with distribution utilities—examples include Southern California Edison, Consolidated Edison, and National Grid in jurisdictions that permit aggregation—to continue metering, billing, and grid maintenance. Governance structures vary, with many CCAs organized as joint powers authorities like East Bay Community Energy or as municipal departments similar to Los Angeles Department of Water and Power municipal models. Stakeholders often include environmental groups such as Sierra Club, labor organizations like the International Brotherhood of Electrical Workers, and consumer advocates such as Public Citizen.

History and Development

The concept traces to regulatory reforms in the 1990s and early 2000s following decisions by bodies such as the California Legislature and rulings from the Federal Energy Regulatory Commission. Pilot programs and enabling statutes—prominent laws include California’s Assembly Bill 117 (2002)—paved the way for municipal programs in Marin County, Lancaster, California, and Santa Monica. Growth accelerated after notable procurements by CleanPowerSF and MCE (formerly Marin Clean Energy) and through power purchase agreements with developers like SunPower, First Solar, and Iberdrola Renewables. Expansion outside California followed precedents set in Ohio Senate Bill 3 debates and municipal initiatives in Chicago and Boston influenced by state-level enactments such as Massachusetts General Laws provisions.

Structure and Governance

CCAs adopt governance models ranging from city councils and county boards, to joint powers authorities and independent boards reflecting examples like San Diego County’s local governance and Santa Clara County authorities. Boards commonly include elected officials from participating jurisdictions, with technical advisory committees drawing staff from utilities such as Pacific Gas and Electric Company and consultants from firms like Black & Veatch and Navigant Consulting. Procurement processes adhere to standards promoted by organizations such as Electric Power Research Institute and accounting guidance from Governmental Accounting Standards Board. Risk management often involves credit support from institutions like Bank of America or J.P. Morgan Chase when negotiating long-term power purchase agreements with developers like Orsted.

Electricity Procurement and Rates

CCAs procure electricity through a mix of short-term market purchases via PJM Interconnection or New York Independent System Operator, and long-term power purchase agreements with generators including Renewable Energy Systems, Pattern Energy, and community solar projects developed by Sunrun. Rate-setting processes balance procurement costs, renewable portfolio standards influenced by laws such as Renewable Portfolio Standard (California), and customer classes previously defined by distribution utilities such as Pacific Gas and Electric Company and Con Edison. Many CCAs offer rate products and programs—green energy options, time-of-use rates, and net energy metering alternatives—coordinating with wholesale markets administered by entities like Midcontinent Independent System Operator.

Environmental and Economic Impacts

CCAs often emphasize renewable energy procurement and greenhouse gas reductions, executing large-scale solar and wind contracts with developers like EDF Renewables and Vestas, and purchasing renewable energy certificates from markets influenced by Regional Greenhouse Gas Initiative. Analyses by research institutions such as Lawrence Berkeley National Laboratory and National Renewable Energy Laboratory indicate varying impacts on local job creation, investment in distributed resources like projects from Tesla Energy and Sunrun, and emissions compared with utility default service. Economic effects include changes in utility stranded cost recovery addressed by agencies such as California Public Utilities Commission and fiscal consequences for municipal budgets observed in San Francisco and Marin County case studies.

Legal and Regulatory Framework

The statutory basis for CCAs differs by jurisdiction: notable frameworks include Assembly Bill 117 (2002) in California, enabling statutes in Massachusetts General Laws, and state laws in Ohio, Illinois, and New Jersey. Regulatory oversight involves state public utility commissions such as California Public Utilities Commission, Massachusetts Department of Public Utilities, and Illinois Commerce Commission, while federal oversight by Federal Energy Regulatory Commission affects wholesale market participation. Legal disputes have reached courts like the California Supreme Court and federal district courts over issues including exit fees, procurement accountability, and compliance with mandates such as Clean Air Act-related requirements.

Criticism and Controversies

Critics raise concerns about exit fees and cost-shift liabilities enforced by investor-owned utilities including Pacific Gas and Electric Company and Southern California Edison, litigation involving entities such as Utilities Consumer Action Network, and disputes adjudicated by California Public Utilities Commission. Debates involve labor concerns from unions like the International Brotherhood of Electrical Workers over procurement practices, allegations of greenwashing countered by environmental NGOs such as Natural Resources Defense Council, and controversies over long-term contracting with large developers including NextEra Energy that carry market risk. High-profile challenges have led to policy responses by legislatures and oversight bodies like California Legislature and New Jersey Board of Public Utilities.

Category:Energy policy