Community Choice Aggregation
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What is a Community Choice Aggregation (CCA)?
Community choice aggregation (CCA), also known as municipal aggregation, are programs that allow local governments to procure power on behalf of their residents, businesses, and municipal accounts from an alternative supplier while still receiving transmission and distribution service from their existing utility provider. CCAs are an attractive option for communities that want more local control over their electricity sources, more green power than is offered by the default utility, and/or lower electricity prices. By aggregating demand, communities gain leverage to negotiate better rates with competitive suppliers and choose greener power sources.
CCAs are currently authorized in California, Illinois, Ohio, Massachusetts, New Jersey, New York, and Rhode Island (Figure 1). In 2016, community choice aggregations sold about 8.7 billion kilowatt-hours of green power to about 3.3 million customers.1 A number of other states are also exploring CCAs. To learn more on the status of states' efforts to enact CCA-enabling legislation, visit: http://www.leanenergyus.org/cca-by-state/.
How do CCAs work?
In the seven states with enabling legislation, a local government must hold public hearings and pass a law authorizing the CCA. Depending on state and local government regulations, all homes, businesses, and municipal sites in that jurisdiction may be eligible to participate in the CCA. Participation in CCAs is always voluntary. Most CCAs have opt-out provisions, meaning when a community begins a program, customers are given advanced notice and have the choice to opt-out of the CCA program and continue to receive electricity from their current supplier. Customers that do not opt-out are automatically enrolled in the program. Although less common, some CCAs have opt-in provisions requiring customers to proactively enroll in the program, which are generally less successful in terms of participation rates. CCAs can also have a tiered structure with a standard option that customers are enrolled in unless they opt-out, and an opt-in "greener" option at a price premium. These opt-in options generally have a higher percentage of green power or are sourced from local renewables.
Prices for electricity under CCAs may be lower than the residential retail price for electricity, sometimes by 15 to 20 percent, because of the collective buying power of entire communities and current market trends. CCA customers continue to receive the same delivery and maintenance services from their local utility, with a single utility bill that reflects the change in supplier. The only changes for customers are the sources and prices of electricity generation.
The CCA purchases electricity on behalf of the entire community from traditional or green power sources.
The existing utility continues to deliver the electricity using the same power lines and billing mechanisms.
Customers benefit by receiving lower cost power, often with higher green power contents and minimal effort.
When was CCA-enabling legislation passed in various states?
|State||Year Established||Alternative Name of Program, Enabling Statute||Notes||Example Renewable Offer|
|Massachusetts||1997||Acts 1997, Chapter 164||Opt-out provision||100% green power option in CCAs like Lowell|
|Ohio||1999||Governmental Energy Aggregation, Senate Bill 3; Senate Bill 221 (2007)||Opt-in or opt-out provisions||100% green power option in CCAs like Cleveland and Cincinnati|
|California||2002||Assembly Bill 117 and Senate Bill 790||Opt-out provision, joint power agencies run programs on behalf of multiple jurisdictions||33% or 100% green power options in CCAs like in Sonoma County; Marin Clean Energy has 50% and 100% options|
|Rhode Island||2002||House Bill 7786||Opt-out provision||Some CCAs have standard green power offering of 5-10%|
|New Jersey||2003||Government Energy Aggregation, Assembly Bill 2165||Opt-out provision for residential customers; opt-in provision for municipal and commercial customers||No green power options|
|Illinois||2009||Municipal Aggregation, House Bill 362||Opt-out provision; for residential and small business utility customers||Many CCAs offer a 100% green power option|
|New York||2014||Governor's Press Release||Opt-out provision||100% green power option in CCAs in Westchester County|
See NCSL table: http://www.ncsl.org/research/energy/community-choice-aggregation.aspx and Lean Energy state profiles: http://www.leanenergyus.org/cca-by-state/ for sources.
Advantages and Challenges of CCAs
- Potential retail electric rate reduction
- Enables rapid shift to greener power resources
- Local control of electricity generation, which can be responsive to local economic and environmental goals
- Expands consumer choices
- Can spur local jobs and renewable energy development
- Implementation is dependent on enabling state legislation
- Requires successful navigation of various CCA regulations and passing the appropriate ordinances
- Administrative costs
- Opt-in versus opt-out clauses can be confusing to consumers
- Potential for push-back from utilities in traditionally regulated electricity states that would face new competition under CCAs
What are some organizations that have used CCAs?
- Town of Swampscott, MA
- Village of Glen Ellyn, IL
- City of Cleveland, OH
- Many municipalities in California have used CCA, including the Town of Fairfax, CA; the City of Belvedere, CA; the City of Lancaster, CA; and the City of Richmond, CA
Partner Case Study
The City of Lancaster began to implement its CCA program in May 2015, with broad public enrollment in October 2015. The Lancaster Choice Energy home page says, "By bringing energy decisions closer to home, we're giving [Lancaster residents] a far greater say in how we approach power generation, energy conservation and sustainability. By investing locally to support our region's renewable resources and helping to create new good paying, local jobs, Lancaster Choice Energy is not only helping our environment, but our economy as well."
Discussing Lancaster's experience with CCA, Mayor R. Rex Parris said, "Our [Cities'] success is in large part due to the strength and willingness of our partners to jump in feet first, in order to preserve the planet for our future generations… Local municipalities can quickly develop public/private partnerships – and in turn enable huge change." Read more about Lancaster's experience here.
- National Renewable Energy Laboratory’s (NREL’s) Community Choice Aggregation: Challenges, Opportunities, and Impacts on Renewable Energy Markets (PDF) (56 pp, 1.5MB)
- LEAN Energy US (Local Energy Aggregation Network)
- Metropolitan Area Planning Council's Start a Community Choice Aggregation Program Guide (PDF) (7 pp, 203K)
- National Conference of State Legislatures' Community Choice Aggregations Webpage
- National Renewable Energy Laboratory's Community Choice Aggregation (CCA) Helping Communities Reach Renewable Energy Goals.
- New York State Energy Research and Development Authority's Community Choice Aggregation Toolkit
- NREL, 2017. Status and Trends in the U.S. Voluntary Green Power Market (2016 Data) (PDF). (63 pp, 6.8MB)