Rerun: Municipal Investment in Clean Energy Tech through Community Choice Aggregation, with Rob Shaw

Climate Break

What is Community Choice Aggregation?

Community Choice Aggregation (CCA) is a system that allows local governments to purchase power directly from an energy supplier other than the existing utility. This means that while the existing utility continues to deliver the power, the CCA buys and generates the power itself, potentially from renewable sources. CCAs continue to pay fees to the existing utility for energy transmission and backup power.

While not required, CCAs can set ambitious climate goals that exceed state-mandated targets and drive decarbonization efforts by investing in emerging clean energy technologies. CCAs can take risks to transform their energy sources and grid in ways that traditional investor-owned utilities may be reluctant to try. When successful, CCAs can reduce electric rates for consumers and drive investment in local energy programs. But CCAs without sufficient capital may face financial and operational challenges.

CCA programs are authorized in various states, including California, Illinois, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Ohio, Rhode Island, and Virginia.

How does it work?

In states with enabling legislation, local governments can create a CCA by holding public hearings and passing a law authorizing CCAs. Participation in CCAs is voluntary, with most programs having opt-out provisions. This means customers are automatically enrolled in the program unless they choose to opt out and continue receiving electricity from their current supplier. Some CCAs may have opt-in provisions, requiring customers to actively enroll in the program. Customers under CCAs continue to receive delivery and maintenance services from their existing utility and receive a single utility bill reflecting the change in electricity generation sources and prices.

What are the pros and cons?

Advantages of CCAs include the potential for retail electric rate reductions, the ability to shift to greener power resources quickly, local control over electricity generation aligned with local goals, expanded consumer choices, and the potential to stimulate local job creation and renewable energy development. However, there are also challenges associated with CCAs, including dependence on enabling state legislation, navigating CCA regulations and ordinances, administrative costs, consumer confusion over opt-in and opt-out clauses, and potential resistance from utilities in traditionally regulated electricity states facing new competition from CCAs.

What is Central Coast Community Energy?

Central Coast Community Energy (3CE) is a CCA program that has procured and provided electricity to residents and businesses in Monterey, San Benito, Santa Cruz, and Santa Barbara counties in California since 2018. It is governed by board members who represent each community served by the agency.

3CE recently approved a contract to build the world's largest Compressed Air Energy Storage (CAES) facility, which will provide 500 megawatts of energy storage. 3CE will reserve 200 megawatts of that capacity to help achieve its goal of serving 100% clean and renewable energy to its customers in Santa Cruz and Santa Barbara counties by 2030. The CAES technology uses underground caverns to store compressed air, which is later released to generate electricity, offering long-duration storage beyond the capabilities of lithium-ion batteries, and supporting grids reliant on intermittent renewable energy.

Further Reading

EPA, Community Choice Aggregation

National Renewable Energy Laboratory, Community Choice Aggregation: Challenges, Opportunities, and Impacts on Renewable Energy Markets (2019)

CalCCA, Community Choice Aggregation (CCA): What is it?

National Renewable Energy Laboratory, Community Choice Aggregation (CCA) Helping Communities Reach Renewable Energy Goals (Mow 2017)

Local Energy Aggregation Network (LEAN), CCA by State

Metropolitan Area Planning Council (Boston, MA), Start a Community Choice Aggregation Program (2014)

National Renewable Energy Laboratory, Status and Trends in the Voluntary Market (2020 data), presentation materials (Heeter 2021)

Central Coast Community Energy (3CE), 3CE to Purchase 200MW of Long Duration Energy Storage from Hydrostor (2023)

For a transcript, please visit https://climatebreak.org/municipal-investment-in-clean-energy-tech-through-community-choice-aggregation-with-rob-shaw/