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.
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.
Formed in February, 2021, California Community Power is a Joint Powers Agency comprised of ten California CCAs. CC Power allows its member CCAs to combine their buying power to procure new, cost-effective clean energy and reliability resources to continue advancing local and state climate goals. The new JPA serves more than 2 million customers in more than 140 municipalities from Humboldt to Santa Barbara.
In May, 2021, Solana Energy Alliance merged with Clean Energy Alliance.
In June, 2021, customers of Western Community Energy switched back to SCE due to their bankruptcy filing.
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.
Two CCAs Ink Seven Power Contracts. California Energy Markets, July 23, 2021
The Climate Center's July 21, 2021 Legislative Update. theclimatecenter.org, July 21, 2021
Community Energy Agencies Contract for 778 MW of Renewable Energy and 118.75 MW of Storage. svcleanenergy.org/news, July 19, 2021
Clean Energy Alliance keeps tabs on summer heat, energy rates. The Coast News Group, July 8, 2021
California CCAs see power purchases continue to slump in Q1 due to pandemic. S&P Global, July 2, 2021
Central Coast Community Energy overhauls rates, looks to ramp up local energy programs. Newtimesslo.com, July 1, 2021
San Diego Turning Green: Airport To Run On 100% Renewable Energy. Simple Flying, June 24, 2021
Pioneer Energy coming next year (to El Dorado County). Mountain Democrat, June 11, 2021
Biden administration makes major push on wind energy off California coast; Humboldt, Morro Bay to lead the way. The Mendocino Voice, May 26, 2021
PRESS RELEASE: Western Community Energy Files For Chapter 9 Bankruptcy Protection To Restructure Organization’s Financial Obligations. May 24, 2021
Clean Energy Alliance will not join newly formed JPA before launch. The Coast News Group, April 13, 2021
Number of CCA Communities in California Hits 200 Mark. CalCCA, April 1, 2021
Eight Community Choice Aggregators Partner to Form California Community Power – A Joint Powers Authority. SVCE News Release, February 8, 2021
CALIFORNIA CCA LINKS
City of Apple Valley
City of Baldwin Park
Unincorporated Monterey, San Benito, Santa Barbara and Santa Cruz Counties plus 26 cities
Cities of Carlsbad, Solana Beach, Del Mar
Unincorporated Ventura County plus 7 cities, Unincorporated Los Angeles County plus 23 cities
San Francisco County
Unincorporated Alameda County plus 11 cities
City of Lancaster
Marin and Napa Counties, Unincorporated Solano County plus 1 city, Unincorporated Contra Costa County plus 13 cities
Unincorporated San Mateo County plus 20 cities
City of Pico Rivera
Unincorporated Placer County plus 5 cities
City of Pomona
City of Rancho Mirage
Cities of San Diego, Chula Vista, La Mesa, Encinitas and Imperial Beach
City of San Jacinto
City of San Jose
Unincorporated Santa Clara County plus 13 cities
Sonoma and Mendocino Counties
Yolo County and cities of Winters, Woodland and Davis
Western Community Energy
(declared bankruptcy, customers switched to SCE in June, 2021)Cities of Perris, Norco, Wildomar, Eastvale, Hemet and Jurupa Valley
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)
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)