CCAs in California focus on the rapid transition to highly renewable and/or greenhouse gas-free sources of electricity generation while keeping rates at or below what investor-owned utilities charge. California’s focus on the environmental benefits that CCAs can deliver distinguish it from other states where a focus on lower rates has been the primary driver of the growth of CCAs.
California experimented briefly with electricity deregulation in the late 1990s, but pulled back after the California electricity crisis bankrupted the state’s three large investor-owned utilities (IOUs). The state electricity market is now regulated. For residents and almost all businesses, CCAs (where they exist) are the only alternative to buying electricity from the local IOU. (CCAs are not offered in cities that operate municipal electric utilities, such as Los Angeles, Sacramento, Riverside and more than a dozen others.) Some large businesses are allowed to purchase power directly from independent electric service providers via “Direct Access,” but this program has been capped and its expansion is tightly constrained. Proposed legislation to expand Direct Access (SB 286) failed in 2016.
CCAs are opt-out programs and are established by a local ordinance voted on by the governing body of a county, city or special district (e.g. local water agency or public utility district). No public vote or referendum is required.
CCAs are set up either by a single jurisdiction (as in the cities of San Francisco, San Jose and Lancaster) or by two or more jurisdictions that create a Joint Powers Authority (JPA) to operate the CCA on their behalf. When a JPA is used, each jurisdiction, regardless of its population, usually gets one seat on the JPA’s Board of Directors. Directors are usually elected officials of participating jurisdictions, e.g., a city council member of county supervisor. Directors are appointed by the jurisdiction’s governing body.
The JPA approach is favored because it creates a legal firewall between the potential future liabilities of the JPA and the assets of its member cities and towns, although member cities may be required to provide loans or loan guarantees to enable the JPA to secure bank loans for its initial working capital.
Once a CCA has operated successfully for a period of time it is possible for it to expand geographically and add customers in other parts of the state, as both Marin Clean Energy, Sonoma Clean Power and Lancaster Choice Energy have done.
Initial power supply contracts for new CCAs are typically for 5 years or less, but 15-25 year power purchase agreements (PPAs) for solar, wind and geothermal generation are common for more established CCAs. Development of local renewable energy projects is often a core goal. Most CCAs in California also offer solar net energy metering tariffs that are slightly more generous (e.g., 1 cent per kWh) than those offered by IOUs. Many also offer feed-in-tariff incentives for medium and large-scale local solar projects, energy efficiency programs, and demand response programs.
California’s first CCA, Marin Clean Energy, was launched in 2010 to serve customers in parts of Marin County. The program that was once branded as a “risky scheme” has proven to be economically viable and has expanded its service territory and its roster of programs and services.
Interest in CCAs and their environmental benefits has grown dramatically since 2014. The graphic in the upper right of this page shows the current status of programs that are operational or well on their way to becoming so. Links to CCA web sites appear in the right-hand column.
CURRENT AND EMERGING ISSUES
The rapid growth in the load served by CCAs and the expected continuation of this growth pose serious challenges to the viability of the state’s three IOUs, especially San Diego Gas & Electric (SDG&E). If the City of San Diego forms a CCA it will reduce the need for more than half of SDG&E’s generation contracts, but there is no obvious way for these contracts to be terminated or transferred to the new CCA without causing serious legal or operational issues. Similar problems, though less severe, affect Pacific Gas & Electric (PG&E) and Southern California Edison (SCE).
There is not yet agreement among the various parties about which charges related to legacy IOU generation contracts and the operation of the transmission and distribution system should be “passed through” to CCA customers. For example, a non-profit organization called The Clean Coalition is working to reduce transmission access charges that it believes unfairly burden distributed generation (DG) resources such as solar PV that don’t actually use California’s transmission infrastructure but still have to help pay for it.
Another area of great concern to CCAs and their customers, as well as to the IOUs, is the “exit fees” charged to CCA and DA customers. The official name of the fee is Power Charge Indifference Adjustment (PCIA). This is a complex topic, but this article summarizes some of the issues. In mid-2017 the CPUC initiated a proceeding to take a fresh look at exit fees. The Docket Number is R.17-06-026 and the order instituting rulemaking (a 36-page PDF) is available here. Those desiring more information should search the web for more recent articles about the PCIA or contact the Government Affairs Manager at one of the CCAs listed on this page.
Unlike the process in many other states, communities in California do not have to hold a referendum to start or join a CCA. Local elected officials authorize participation in a CCA by a simple majority vote.
Large hydro-electric dams and nuclear power plants are not classified as eligible renewable energy technologies in California, but the electricity they produce is considered to be greenhouse gas free.
Every CCA offers both a basic (default) electricity offering (typically 35% to 55% renewable) and also a 100% renewable option for one to two cents more per kWh.
Unbundled Renewable Energy Credits (RECs) are not widely used by California CCAs, though they are sometimes used during the first year or two of a new CCA’s operation before new solar or wind farms can be built to serve the CCA’s customers.
When it began delivering electricity in April 2017, Silicon Valley Clean Energy was the first California CCA whose default offering was 100% GHG-free.
Clean Power Alliance is currently California’s largest CCA and serves approximately 3 million customers and 1 million customer accounts across 31 communities throughout Southern California.
LEGISLATION (PARTIAL LIST)
AB 117 (2002) established Community Choice in California
SB 790 (2011) was passed in response to efforts by Pacific Gas & Electric, in particular 2010’s Proposition 16, to stop the growth of CCAs. It created a code of conduct that utilities must adhere to. In essence, it prohibited utilities from marketing against CCAs except through a separate marketing division separated by a “firewall” from the other operations of the utility. The first such marketing entity was established in late 2016 by Sempra Energy, the corporate parent of San Diego Gas and Electric.
AB 1110 (2016) established a framework for disclosing GHG emissions that will apply to CCAs.
CALIFORNIA CCA LINKS
Apple Valley Choice Energy (A single-city CCA in Southern California)
Central Coast Community Energy (formerly Monterey Bay Community Energy)
Central Coast Power (A new CCA is being considered that would serve Santa Barbara County, and the cities of Carpinteria, Goleta and Santa Barbara)
Clean Energy Alliance (to launch in May, 2021 and will serve Del Mar, Solana Beach and Carlsbad)
CleanPowerSF (San Francisco)
Desert Community Energy (Palm Springs, Cathedral City and Palm Desert. August, 2018 launch delayed)
East Bay Community Energy (Alameda County and all the cities in the County except Alameda, Newark and Pleasanton make up EBCE)
Lancaster Choice Energy (The first single-city CCA to begin operating in California and the first outside the San Francisco Bay Area)
Marin Clean Energy (Marin County, Napa County, unincorporated Contra Costa County; cities of Benicia, Concord, Danville, El Cerrito, Lafayette, Martinez, Moraga, Oakley, Pinole, Pittsburg, Richmond, San Pablo, San Ramon, Walnut Creek)
Peninsula Clean Energy (San Mateo County)
Pioneer Community Energy (Placer County and the cities of Auburn, Colfax, Loomis and Rocklin)
Rancho Mirage Energy Authority (City of Rancho Mirage)
Redwood Coast Energy Authority (County of Humboldt; cities of Arcata, Blue Lake, Eureka, Ferndale, Fortuna, Rio Dell, and Trinidad; Humboldt Bay Municipal Water District)
San Diego Community Power (to launch in phases in 2021 and early 2022, serving the cities of San Diego, Chula Vista, La Mesa, Encinitas and Imperial Beach)
San Jacinto Power (City of San Jacinto)
San José Clean Energy (City of San Jose)
Sierra Valley Energy Authority (Placer County and the cities of Auburn, Colfax, Loomis and Rocklin have formed a JPA)
Silicon Valley Clean Energy (Cities of Campbell, Cupertino, Gilroy, Los Altos, Los Altos Hills, Los Gatos, Milpitas, Monte Sereno, Morgan Hill, Mountain View, Saratoga, Sunnyvale and Unincorporated Santa Clara County)
Solana Energy Alliance (Solana Beach is the first CCA in San Diego County)
Sonoma Clean Power (Counties of Sonoma and Mendocino; cities of Cloverdale, Cotati, Fort Bragg, Petaluma, Point Arena, Rohnert Park, Santa Rosa, Sebastopol, Sonoma, Willits and the town of Windsor)
Valley Clean Energy (Cities of Davis and Woodland; unincorporated Yolo County)
California Community Choice Association (Cal-CCA) (a trade association representing the operating CCAs)
California Alliance for Community Energy (CCA advocacy group)
California Renewables Portfolio Standard (Goals and progress to date in expanding renewable energy generation)
Californians for Energy Choice (CCA advocacy group)
CCAs and the Path to Local Economic Development and Energy Innovation, California Case Studies (3-page overview of local economic development and consumer benefits, September, 2018)
Center for Climate Protection (Environmental protection non-profit with a focus on CCA)
Clean Power Exchange (News about issues important to CCAs)
Pacific Gas & Electric (The utility serving most of Northern and Central California)
San Diego Gas & Electric (The utility serving San Diego and surrounding areas)
Southern California Edison (The electric-only utility serving most of Southern California)