CCAs in California focus on consumer choice, competitive electricity rates, and the aggressive transition to clean energy resources. California’s CCA legislation, AB 117, passed in 2002 and was amended by SB 790 in 2011.
California is a predominantly regulated energy state, with only limited access to competitive energy markets through Direct Access and CCA. This means that CCAs in California work in the wholesale (not retail) power market. CCAs are opt-out programs and are approved by local ordinance of a County, City or special district (e.g. local water agency or public utility district); a separate public referendum is not required.
For the most part, local governments who form a CCA in California do so through the creation of a joint powers agency (JPA) that runs the CCA program on behalf of multiple jurisdictions. There are several reasons to consider this approach including the ability of the JPA to leverage financing for new programs and projects as well as the establishment of a legal firewall between the budget and assets of the CCA agency and the general funds of its member cities and towns. Municipalities that have a separate utility or water district can integrate CCA into their current utility service. This is a logical choice since those agencies already have utility (most often water) customers.
Because CCAs in California are organizationally more complex and in some ways more sophisticated, CCA is a long-term proposition and most are focused on offering consumers affordable rates along with an aggressive transition to cleaner, more efficient power. Initial power supply contracts range from 3-5 years, 15-25 year power purchase agreements (PPAs) are common, and the development of local renewable energy projects is often a core goal. CCAs in California have focused on the integration of distributed generation resources, net-energy metering, local feed-in-tariff, energy efficiency, and demand response programs.
In May 2010, the nation’s first CCA committed to reduction of greenhouse gas emissions and increased use of renewable power launched in Marin County. Since then, Marin Clean Energy has grown to serve over 100,000 customers with a minimum energy portfolio of 50% CA qualified renewables. The Agency has established net energy metering and feed-in-tariff programs and its long-term PPAs have spurred the development of nearly 60MW of new solar, wind and landfill gas in the State. The program that was once branded a “risky scheme” is proving economically viable and is expanding its service territory and its roster of programs and services.
CCAs are now operational in not only Marin, but Sonoma, Lancaster and most recently San Francisco and San Mateo County. CCAs efforts are underway in Silicon Valley, Monterey Bay, Contra Costa County, Alameda County, Humboldt County and other California cities and counties. Local leaders committed to launching the first southern California CCA have formed the San Diego Energy District Foundation and the San Diego County Board of Supervisors unanimously approved funding for a CCA study within the context of their County Renewable Energy Plan. Public discussions of CCA are occurring from Yolo County to San Luis Obispo and from Arcata to Oakland.
Prior to the failure of Prop 16 in 2010 and the passage of SB 790 in 2011, utility opposition to CCA was fierce and well funded. Since then, utilities have taken a publicly neutral position on CCA, and utility marketing or lobbying against CCA is now illegal. That doesn’t mean utility opposition has gone away entirely, and the utilities do a good job working through allied organizations to make their position known. But the real battlegrounds for CCA in California are at the State legislature and the CA Public Utilities Commission. Key regulatory issues include cost shifting from generation to transmission and distribution, non-bypass-able charges that unfairly impact CCA customers, and cost recovery surcharges including utility exit fees. All of these issues make it challenging, but not impossible, to compete in the CA marketplace. Cities and counties around the state are investigating CCA now that the Marin and Sonoma models have proven to be a local economic engines and environmental powerhouses.
CALIFORNIA CCA FAST FACTS
- Number of CCAs approved by the CPUC: 5 (Marin, San Francisco, Sonoma, Lancaster, San Mateo)
- Number of communities currently investigating CCA: 15+
- Minimum and maximum percentage of electricity from renewable power available to Marin County and Richmond customers from Marin Clean Energy (MCE): 50%, 100%; Percent carbon free resources: 67%
- Percentage of renewable power authorized for San Francisco’s CleanPowerSF program: 100%
- Megawatts of new local solar from County water project included in Sonoma Clean Power’s initial supply portfolio: 20MW
- Monthly rate savings for average small business customer in Marin: $8.00/month winter, $2.50/month summer
- Potential rate savings for A-1 commercial customers in San Diego: 23%
- Number of net energy metering (NEM) customers and price per kWh offered under Marin’s NEM tariff: 2,500; Full retail + 1 penny
- Amount of new solar development under contract for Marin and Richmond CCA customers: 52 MW
- State Renewable Portfolio Standard: minimum 20% in 2010, moving up to 50% by 2030