Overview In 2002,
California State Legislature enacted Assembly Bill 117, setting the foundation for Community Choice Aggregation in California. The bill recognized that as local, not-for-profit service providers, overseen by their local elected officials, CCAs are the preferred default service provider in their service territory. So CCA law mandated that customers be automatically enrolled in their local CCA, with the ability to opt out at any time to remain a "bundled customer" with their incumbent utility. The law also makes the clarification that, in California, CCAs are by legal definition not utilities, and are legally defined in California law as not-for-profit electric service providers.
[2] After passage of AB 117, two years of rulemaking followed at the California Public Utilities Commission. The fundamentals of CCA regulation are contained in this rule-making that occurred between 2003 and 2005: • Phase 1 Decision: December 2004: Implementing Portions of AB 117 Concerning Community Choice Aggregation • Phase 2 Decision: December 15, 2005: Decision Resolving Phase 2 Issues on Implementation of Community Choice Aggregation Upon completion of this rulemaking process, CCA became available to local governments in late 2005. In the early days of the
California energy crisis, Paul Fenn, the Massachusetts Senate Energy Committee director who conducted the legal research and drafting of the original CCA legislation, formed Local Power Inc. and drafted new CCA legislation for California. In a campaign organized by Local Power, the City and County of San Francisco led Oakland, Berkeley, Marin County, and a group of Los Angeles municipalities in adopting resolutions asking for a state CCA law in response to the failure of California's deregulated electricity market. Fenn's bill was sponsored by then Assembly Member Carole Migden (D-San Francisco) in 2001, and the bill became law (AB117) in September 2002. CCA formation in California was delayed by initial political opposition by the state's investor-owned utilities. In June 2010,
Pacific Gas & Electric sponsored a ballot initiative,
Proposition 16, to make it more difficult for local entities to form either municipal utilities or CCAs by requiring a two-thirds vote of the electorate rather than a simple majority, for a public agency to enter the retail
power business. Although
PG&E spent over $46 million in an effort to pass the
initiative Prop 16's opponents, a broad coalition led by grassroots clean energy activists, Local Power Inc., and The Utility Reform Network, raised and spent less than $100,000, Proposition 16 was defeated. San Francisco adopted a CCA Ordinance drafted by Fenn (86–04, Tom Ammiano) in 2004, creating a CCA program to build 360 Megawatts (MW) of solar, green distributed generation, wind generation, and energy efficiency and
demand response to serve San Francisco ratepayers using
solar bonds. Specifically, the ordinance combined the power purchasing authority of CCA with a revenue bond authority also developed by Fenn to expand the power of CCA, known as the H Bond Authority (San Francisco Charter Section 9.107.8, Ammiano), to allow the CCA to finance new green power infrastructure, worth approximately $1 Billion. In 2007 the City adopted a detailed CCA Plan also written primarily by Fenn (Ordinance 447–07, Ammiano and Mirkarimi), which established a 51% Renewable Portfolio Standard by 2017 for San Francisco. Over the following decade, Sonoma and San Francisco worked with Fenn's company, Local Power Inc. on program designs focused on achieving energy localization through renewables and energy efficiency. Inspired by Climate Protection efforts, CCA has spread to cities throughout the Bay Area and the state. In 2007, 40 California local governments were in the process of exploring CCA, virtually all of them seeking to double, triple or quadruple the green power levels (Renewable Portfolio Standard, or "RPS) of the state's three Investor-Owned Utilities. As of November 2020, there are 23 CCAs serving the energy needs of more than 10 million customers in more than 180 cities and counties throughout California, and more are expected to have CCA service in 2020–2021 as new programs launch and existing programs expand. In April, 2014, Assemblymember Steve Bradford (D-Gardena) introduced legislation (AB 2145) that would sharply limit the ability of CCAs to enroll customers. CCA advocates and a broad coalition of local governments, business, and environmental organization rose up in opposition and defeated AB 2145. AB 2145 passed in the California Assembly but died in the Senate on August 30, 2014, when the Senate's legislative session was ended without it coming up for a vote.
New renewable development The California Renewables Portfolio Standard (RPS) is a standard established by the State of California that requires electricity service providers in the State to include certain minimum levels of defined renewable energy in their power mixes. In California all CCAs meet or exceed these minimum standards. CCAs are regulated by their local governing boards, which are mostly made up of local government elected officials. In addition, CCAs must comply with State and federal regulations that apply to them. They engage with numerous state and federal agencies, including their regulatory overseer, the California Public Utilities Commission, and also the
California Air Resources Board, California Energy Commission, and the
Federal Energy Regulatory Commission. CCAs are well established in California with the first one having launched service in 2010. As of January 2020 there were 21 operational CCAs in California serving over 10 million customers. CCAs are responsible for over 3,000 megawatts of new renewable energy in California, including solar, wind, and bioenergy. They are the primary procurers of California renewable energy portfolio-eligible renewable energy in the State. All CCAs in California are entering into contracts for new renewables. In 2018, six of 19 California CCAs had Power Purchase Agreements for new renewables, accounting for approximately 10% of CCAs total load and 1.6% of California's total load assuming an average 30% capacity factor for all types of renewable technologies.
Power Charge Indifference Adjustment Other issues that can arise from the development of community choice aggregation include the development of exit fees, specifically in the state of California. This is an issue for CCAs in the state of California because it allows
Investor-owned utility (IOU) to raise prices through a Power Charge Indifference Adjustment (PCIA) or exit fee, making it more expensive for customers to join CCA programs because there will be a fee to customers when they choose to stop using bundled services provided by their utility provider and start using a CCA program. The exit fee, which typically is charged for 5 years, is applied to each kilowatt-hour of electricity consumed by the customer and shows up as a separate charge CCA customers' monthly bills. In California, it has been difficult to determine the appropriate exit fee to customers who remain at the incumbent utility are not paying more than their fair share for these long term services, which has caused exit fees to change rapidly. Exit fees in Pacific Gas & Electric's service area decreased by 62 percent from 2012 to 2013, only to spike by 211 percent from 2013 to 2016 and increase again in a 2018 CPUC order. The main issues revolving PCIA is the transparency of the program, accountability of the agencies, and proper valuation of costs associated with the exit fees. Exit fees are put on CCA users to compensate for the cost that would be put on those remaining with IOU services. In October 2018, after working on this issue for a year, the regulators at the CPUC announced their decision to continue and increase the cost of PCIAs to insure that IOU customers are not left with excessive energy costs due to the defection of customers to CCAs. The rate impact those leaving for CCAs was expected to be a 1.68% increase to those customers leaving PG&E; 2.5% increase on Southern California Edison defectors and 5.25% on customers departing SDG&E. The choice to opt out can be a benefit for customer choice but it can also be a risk for CCA programs because if there are many customers choosing to opt out of the services, this can result in financial instability among the CCA.
Procuring power and the role of energy marketers Some Community Choice Aggregators hire third-party consultants with experience in energy markets to procure and schedule power. This may be especially necessary with newer CCAs who are still staffing up and lack credit ratings; as such they are not able to finance the building of their own generation assets. CCAs are continuing to earn investment-grade credit ratings from the likes of Fitch, Moody's, and S&P; Central Coast Community Energy, CleanPowerSF, MCE, Peninsula Clean Energy, and Silicon Valley Clean Energy all have investment-grade credit ratings, and other CCAs are pursuing them. One of the advantages a CCA can offer is its focus on local jobs creation and support of local energy resources. But, because of the mandate to provide power at a low cost, CCAs in California have by necessity contracted with multinational and fossil-fuel reliant corporations such as Shell, Calpine Energy Direct Energy and Constellation (a subsidiary of Exelon).
Energy resource stability and Provider of Last Resort As of 2017, CCAs in California have some
resource adequacy requirements, but the incumbent utility remains the Provider of Last Resort (POLR). As CCAs proliferate in California, there is debate and concern over who takes on the POLR responsibility if a CCA fails. Some investor-owned utilities have indicated a desire to stop purchasing and selling electricity, and if incumbent utilities are no longer in the business of providing power, it may no longer be feasible for them to provide this backstop. Individual CCAs differ on whether they want to or are capable of taking on this responsibility. The CPUC has released a study called the "Green Book," which is reminiscent of the agency's "Blue" and "Yellow" Books in 1993, which led to California's deregulation and subsequent energy crisis in the early 2000s. The substance of the "Green Book" is to call for thoughtful and comprehensive energy planning to help the state both meet its renewable source energy goals and avoid the turmoil of deregulated and fragmented energy supplies and suppliers. There are crucial trends, pointed out the CPUC, that threaten California's three pillars of energy policy: reliability, affordability and deep decarbonization. The first trend revolves on fragmented decision making. Nine CCAs provided energy to consumers in 2017; there are 21 today. By the mid-2020s, 85% of power in California could be provided by new entities, different from those providing power in 2019. Trend two is poorly planned and organized procurement of the resources needed to ensure reliability. The third trend is ignoring the potential that customers might lose power service if their electric provider fails, as did some in the crisis of the early 2000s. Critics responded that grim predictions and unclear recommendations in the Green Book are not substantiated.
Risks involved in power system fragmentation System fragmentation puts the state closer to a reliability risk of not meeting its clean energy targets: California has 40
load serving entities, which include 19 CCAs. The rise of CCAs has fractured the role of California's three big regulated utilities as the primary providers of the state's grid reliability needs, and CCAs are not doing the type of resource adequacy planning needed to keep the system stable as it decarbonizes. As the state's energy system becomes increasingly fragmented, regulators and policy makers are expressing concerns about resource adequacy to keep the system reliable and whether the state will meet its goal to have 100% clean energy by 2045. A recent report from a California administrative law judge analyzing Integrated Resources Plans done by all load serving entities noted that: "Because the majority of new resources in California are expected to be acquired by CCAs in the next decade, this puts additional focus on their contributions to the IRP process. Very concerning overall is the attitude displayed by some CCAs with respect to the IRP process in general. Several CCAs asserted the primacy of their voluntary plans approved by their local governing boards over the Commission's IRP process, and argued that the Commission's IRP processes do not fit with their individual resource procurement plans. This demonstrates the crux of the problem the State will face in coming years as more and more load is served by non-IOU, and specifically CCA, providers." The issue has become so pressing that the California Legislature is considering a bill (AB 56, in committee in September 2019) to give the CPUC the ability to task an existing state agency to serve as a backstop for procurement of electricity to meet the state's climate, clean energy, and reliability goals.
Customer choice in California California CCAs typically offer customers several energy programs to choose from - a default program (Usually an energy mix similar to that provided by the incumbent utility), a program based on solar energy and a more expensive, 100% Renewable program. This renewable program is backed by unbundled Renewable Energy Credits (the customers cannot link the power they are buying to a specific renewable resource.). In 2018, these programs ranged from 37% to 100% renewable, with a statewide average of 52 percent. CCAs may also offer solar rebates and net metering, and some provide electric vehicle rebates for income-qualifying customers. Some of the offerings by CCAs may meet the standards set by Green- E. For example, Marin Clean Energy offers a "Light Green," a "Deep Green," and "Local Sol Program" where only the Deep Green and Local Sol options are Green- E certified. Green-e certified are programs that are regulated and determined to meet a specific criteria and standards established by Green- E, developed by the nonprofit organization Center for Resource Solutions.
CCA rates and consumer protection Whether a CCA offers lower or higher rates than its incumbent utility is based on the size of the PCIA (exit fee), whether the incumbent utility changes its rates, and the specific "Renewable Energy" package the customer wants. CCA websites usually compare the CCA's rates to that the incumbent utility. For example, Clean Power Alliance 2019 rates are 1-2% cheaper (for the 36% clean power) than Southern California Edison and 7-9% higher (if customers choose the 100% clean power, which uses unbundled Renewable Energy Credits). The CPUC cannot adjudicate customer complaints between CCAs and customers because they do not have oversight over the CCA on consumer protection issues. This responsibility falls with the CCA Board of Directors. In addition, given that CCAs are not regulated through the CPUC like IOUs, there is no visibility regarding cost allocations amongst different customer classes. Marin Clean Energy offers 10 different rate packages. When comparing its E-1 package with that of PG&E, the MCE Light Green (50% renewable) rate is .047% (six cents) cheaper than the PG&E rate. If the customer chooses the MCE Deep Green (100% renewable) package, the PG&E Solarchoice (100% renewable) package is 1.2% ($1.63) less than the MCE rate. The nine other MCE packages compare closely.
Employment and union relations In California, CCA customers remain customers of the investor-owned utilities (IOUs). That's because CCA customers continue to receive a range of services from the incumbent utilities. As Pacific Gas & Electric notes: "It's important to remember that if a customer becomes a CCA customer, they are still a PG&E customer. We continue to deliver the electricity to CCA customers through our transmission and distribution system, and provide meter reading, billing, customer service and maintenance services." The vast majority of IOU employees provide transmission and distribution system maintenance and upgrades for electricity lines, billing and customer service—all of which the IOUs continue to provide. New jobs have been created constructing and operating clean energy generation facilities for energy suppliers of CCAs, and providing call center and other services for CCAs. CCAs in California support union jobs and wages by signing power purchase agreements with new energy facilities that are built with union labor. CCAs have signed contracts with new renewable energy facilities totaling more than 3,600 megawatts. CCA call centers throughout the state are also staffed by union workers. For example, call center representatives at Energy Choice California elected to join IBEW 1245 in May 2018. ECC is a woman-owned business which handles call center work for Calpine Energy Solutions. Calpine provides data management and customer contact services for 17 of 21 CCAs in California. Labor unions have criticized CCAs for not supporting and instigating local job growth, reducing union jobs, and contracting with power providers who use non-union labor. CCAs tend to employ fewer employees than IOUs and contracts with large multinational corporations are primarily fulfilled through the use of non-union labor. For example, The Western Labor and Management Public Affairs Committee (Western LAMPC) has raised concerns about CCAs in California and their relationships with union labor. The committee censured MCE for its contracts with large, multi-national energy providers like Shell, stating that MCE purchases most of its energy from out-of-state non-union corporations. It also reprimanded Sonoma Clean Power for its contracts with Constellation Power and Sonoma's unwillingness to provide firm commitments to local projects. San Diego's two locals of the
International Brotherhood of Electrical Workers (IBEW) have expressed concern over the possible loss of union jobs as San Diego forms its own, new CCA. The union wants union-scale wages, involvement in any construction projects and an opportunity to unionize workers in the new CCA. Electrical union workers in the Los Angeles area have approved the CCA concept, as long as union jobs remain available.
California CCAs Marin Clean Energy Marin County launched California's first CCA program, MCE, on May 7, 2010, offering 60%-100% renewable energy at competitive and stable rate significantly reducing energy-related greenhouse gas emissions and enabling millions of dollars of reinvestment in local energy programs. MCE is a load-serving entity supporting a 1,000 MW peak load. The CCA provides electricity service to more than 480,000 customer accounts and more than one million residents and businesses in 34 member communities across four Bay Area counties: Contra Costa, Napa, Marin and Solano.
Sonoma Clean Power The
Sonoma County-based Center for Climate Protection formally introduced the idea of pursuing CCA in Sonoma County in the 2008 Community Climate Action Plan. In 2011, the
Sonoma County Water Agency funded the production of a
feasibility study to study the question. The feasibility study was favorable and after much public review and the formation of a Joint Powers Authority to administer the agency, Sonoma Clean Power launched service on May 1, 2014 offering power that is both greener and more locally sourced, at a lower cost than incumbent utility PG&E. The county and all eight eligible cities in the county eventually joined. This includes Cloverdale, Cotati, Petaluma, Rohnert Park, Santa Rosa, Sebastopol, Sonoma, and Windsor. In 2016 Mendocino County voted to join Sonoma Clean Power and the Sonoma Clean Power governing board voted to accept Mendocino County and the cities of Fort Bragg, Willits, and Point Arena into the Joint Powers Authority.
Lancaster Choice Energy Lancaster Choice Energy (LCE) began providing renewable power to municipal accounts in May 2015 with broad public enrollment beginning in October. So far the city of
Lancaster, California has offset almost 70% of its peak load (147 megawatts) with renewable sources of energy. Lancaster aims to become the first net-zero city in the U.S., Lancaster is determined to generate more clean energy than it consumes, along with several private-sector partners. The city has established new rules for building more efficient, sustainable structures. As of the end of its first full year of operations in 2016 Lancaster Choice Energy had 55,000 accounts in the City of Lancaster. LCE customers receive a minimum of 36% renewable energy through the standard Clear Choice product, with many opting up to 100% renewable Smart Choice. In addition, LCE's first
solar energy plant is now live. Built by sPower, the plant provides 10 MW of power produced in Lancaster directly for Lancaster residents and is enough to power approximately 1,800 homes.
CleanPowerSF Launched May 2016,
City and County of San Francisco.
Peninsula Clean Energy Peninsula Clean Energy (PCE) was formed in February 2016 by unanimous votes of the
County of San Mateo and all 20 incorporated cities and towns in the county. It began supplying power to customers in the Fall of 2016 and is currently the largest community choice energy program in California. As of June 2017 it was offering its customers a baseline product that is both cleaner (at least 50% renewable and 75% greenhouse gas free) and at a lower cost than the incumbent utility, PG&E. As of June 2017 it was also offering its customers a 100% renewable product that was significantly less expensive than PG&E's 100% renewable product.
Silicon Valley Clean Energy Silicon Valley Clean Energy (SVCE) launched its operation on April 3, 2017, by providing 100% GHG free electricity to 12 Silicon Valley communities, including
Campbell,
Cupertino,
Gilroy,
Los Altos,
Los Altos Hills,
Los Gatos,
Monte Sereno,
Morgan Hill,
Mountain View,
Saratoga,
Sunnyvale and unincorporated
County of Santa Clara.
Ava Community Energy (formerly East Bay Community Energy) Ava Community Energy, or Ava, (formerly East Bay Community Energy, also abbreviated EBCE), avaenergy.org, was formed in October 2016 by
Alameda County and the cities of
Albany,
Berkeley,
Dublin,
Emeryville,
Fremont,
Hayward,
Livermore,
Oakland,
Piedmont,
San Leandro, and
Union City. Ava Community Energy (Ava) began providing electricity in June 2018 for commercial and municipal customers and November 2018 for residential customers. In 2021, Ava began serving electricity to the cities of Newark, Pleasanton, and Tracy. In 2022, the City of
Stockton voted to join Ava, and in 2023, the City of
Lathrop voted to join. Ava will begin serving electricity to these two cities in 2025. Ava offers customers two energy services. Their Bright Choice service uses a slightly larger amount of clean energy sources as
Pacific Gas and Electric Company (PG&E) but it costs less. The second service option is their Renewable 100 option which uses 100% California wind and solar energy and is offered at a cost just above the PG&E rate.
Central Coast Community Energy (formerly Monterey Bay Community Power) Central Coast Community Energy (3CE) procures carbon-free and renewable electricity for over 400,000 customers in 33 communities in
Monterey,
San Benito,
Santa Cruz,
San Luis Obispo, and
Santa Barbara Counties. 3Ce began serving commercial customers in March 2018, with residential service beginning July 2018. 3CE reinvests in the communities it serves by discounting its electric generation rates and providing energy program incentives.3CE is geographically the largest CCA.
San Jose Clean Energy On May 16, 2017,
San Jose City Council approved the creation of San Jose Clean Energy, making
San Jose the largest city in California to adopt a CCA.
Clean Power Alliance Formed in 2017, a new CCA opened in February 2019 in
Los Angeles and
Ventura counties in
Southern California. The Clean Power Alliance will provide electrical energy to residents of 29 cities and unincorporated parts of the counties. Cities like Los Angeles, Burbank, and Glendale who have municipal utilities, will remain with their local energy source. Clean Power Alliance provides three rate plans to its customers, all varying in renewable sources of energy. Plan one offers 36% renewable at a cost 1% cheaper than Southern California Edison (SCE). The second plan has 50% renewable energy and is the same cost as SCE; the third provides 100% renewable power at a cost 9% higher than SCE. All the rates are set by the CPA board, whose 31 directors represent each city and county served.
San Diego Community Power In 2019, the city council of San Diego voted to develop a CCA that would provide electric power to San Diego, as well as Chula Vista, La Mesa, Encinitas and Imperial Beach CA. The city hopes that the CCA, which will be the second largest in the state after Los Angeles' Clean Power Alliance, will be operational by 2021. The San Diego CCA expects to offer its customers rates about 5% lower than those of IOU
San Diego Gas and Electric. Program supporters say the CCA will provide green sources of power at rates lower or equal to those of SDG&E. This is critical as
San Diego's climate plan calls for 100% renewable energy by 2035; more ambitious than the state of California's by ten years. A 150 MW solar farm with 4 hours of
battery is scheduled for 2023. Critics of the CCA say cities have little or no experience in purchasing or generating electricity and the unpredictable nature of the energy industry can lead to volatility and chaotic conditions. Unions find the plan "labor weak;" the Sierra Club commented that the CCA should insure that nuclear and fossil fuel energy be completely excluded from the CCA's energy procurement.
California Community Choice Association In 2016, six Community Choice agencies - CleanPowerSF, Lancaster Choice Energy, MCE, Peninsula Clean Energy, Silicon Valley Clean Energy, and Sonoma Clean Power - formed a non-profit
trade association, the California Community Choice Association, also known as CalCCA. CalCCA held its first meeting in San Francisco in October 2016.
Emerging CCAs in California Multiple cities across the state of California are considering the implementation of Community Choice aggregation programs across their districts. California has many communities who are anticipated to launch CCAs, this includes
San Diego and
Butte County. There are also other cities and counties who are exploring and in the process of implementing CCA, this includes
Fresno County, and
San Luis Obispo County. ==Illinois==