By Mike McGuire and Ann Hancock
A little-known revolution is sweeping California’s energy market, helping the state exceed its ambitious goals for renewable energy and investing profits back into the communities they serve. Community Choice Energy or Community Choice Aggregation (CCA), enabled by state law in 2002, allows local communities to establish a power agency governed by local elected officials that supplies electricity to residents and businesses. The private for-profit utilities still maintain the wires and handle the billing, while this public, not-for-profit agency decides the sources of electricity generation, sets customer rates, can develop energy generation facilities, and innovative programs to benefit their customers.
The first CCA started serving customers in Marin County in 2010, and the second in Sonoma County in 2014. Fourteen CCAs now operate across the state. Many more are in the pipeline, including in large populated areas like Alameda and Los Angeles counties and the City of San Jose.
CCAs offer customers a choice of an electric service provider focused on doing community good in what was formerly a regulated monopoly market. Where they have been implemented, they also provide slightly lower rates and cleaner power than the private utilities. In these markets, they are serving 80 to 95% of the customers. The Center for Climate Protection estimates that given current trends, CCAs will serve 65% of the eligible market by 2020, or about 18 million customers in every corner of this great state.
CCAs aren’t just providing cheaper, cleaner power, even though these are fantastic benefits. The more mature agencies are also offering innovative programs that help everyday Californians lower their utility bills and transition to a more sustainable lifestyle. For example, Sonoma Clean Power has subsidized the purchase of electric vehicles for their customers with incentives between $2,500 to $5,000 per vehicle. They have also given away hundreds of smart home charging systems for these vehicles. MCE Clean Energy (formerly Marin Clean Energy) has built a 10 megawatt solar system in Richmond, with over 50 percent of the labor for the project from local residents who were trained through a local career training program. These kinds of projects, tailored to the unique needs of the communities they serve, help to combat climate change and drive local economic development.
CCAs also leverage their relationships with their customers and other local agencies to develop distributed energy resources like solar, energy storage, electric vehicles, energy efficiency, and microgrids in a coordinated fashion, while bringing power generation closer to where it is used – at a person’s home or business. Doing this saves the cost of building new, expensive transmission lines, and is more efficient than transporting power over long distances. The local model is flexible and makes the power grid more resilient in times of outages or natural disasters.
There are some that say CCAs are too good to be true and are trying to limit competition by attempting to ban CCAs, despite millions of satisfied customers. Many California legislators and regulators are working hard to prove to the rest of the country that clean energy and a thriving green economy is no longer a theory, it’s reality here in the Golden State. To do so, legislators and regulators should ensure that the playing field for CCAs is level so these new players can continue to set the pace for the rest of California’s energy providers.
Senator Mike McGuire (D – North Coast) represents the 2nd Senate District, which encompasses the North Coast region, from Marin County to Del Norte County. Ann Hancock is the Executive Director of the Center for Climate Protection. She will speak about CCAs’ capacity to drive innovation at the Business of Local Energy Symposium in Sacramento on June 5. More information: www.climateprotection.org