STATES UNDER CONSIDERATION
We’re often asked “What do you look for when considering CCA in a new state?” “Where does it work best?” The truth is, there’s no single answer nor is it always a straight path to CCA adoption. Why? Because regulatory frameworks, electric power markets and policies/politics are very different around the country.
Let’s start with some basic context. At the 50,000 foot level, the US operates within 10 electric power markets and 3 regulatory frameworks:
Regulated/Un-Restructured– Vertically integrated investor-owned utilities (IOUs) are the sole source provider of both electric/gas generation and transmission services. It’s a one-stop shopping monopoly model with guaranteed rates of return, centralized oversight and no market competition or customer choice. Over half of US states operate in fully regulated energy markets including WA, UT, AZ, MN and FL.
De-regulated/Restructured – In restructured states, the utility function has been split to allow for electric (and in some cases, gas) supply to be provided by retail energy suppliers on a competitive basis. The utility gets out of the power generation business and is a “poles and wire” company providing power transmission, distribution, line maintenance and some programs. Examples of deregulated/restructured markets are TX, NY, MA and IL.
Partially De-Regulated – These states maintain a vertically integrated utility structure but allow some customer classes, usually large commercial and industrial, to access the wholesale, competitive market to procure power for their load. Small commercial, municipal and residential accounts continue to be served on a regulated, monopoly basis by the IOU. Examples of partially de-regulated states are: CA, OR, NV, MI and PA, VA.
CCA: A Community Tool to Boost the Economy and Green the Grid, LEAN presentation in Colorado, March, 2019
Creating Economic Opportunity and Addressing Climate Change Through Community Choice Aggregation:
HOW DOES A STATE GET A CCA?
CCAs are authorized at the state level in one of two ways: 1) through State legislation or 2) through regulation. Of the 8 states in which CCA currently exists, six are de-regulated (IL, OH, MA, NY, RI and NJ), two are partially de-regulated (CA and VA), and zero are in fully regulated states… although we aim to change that. Please see our “What is CCA” page for links to state statutes/enabling legislation.
WHAT ARE THE CONSIDERATIONS?
Although there are some similarities depending on which electric power market a state operates in, each state has differences including existing regulations, state energy policies, political leadership and customer base. That said, we’ve identified 5 considerations when determining where CCA might work best :
Partially deregulated or restructured energy market
States with aggressive renewable portfolio standards (RPS) and other clean energy goals
Legislative or public action to explore electric competition and/or greater use of clean power (e.g. NV’s 2018 Energy Choice Initiative; Oregon’s SB 978)
Local government interest in CCA
Electric rates and customer dissatisfaction with incumbent utility
In 2017, the Oregon Legislature passed SB 978 requiring the OPUC to establish a public process for investigating industry trends, technologies and policy drivers [https://gov.oregonlive.com/bill/2017/SB978]
SB 978 ignited a dialogue on how Oregonians can better manage their energy future. We believe CCA is a compelling option that can achieve many of the state’s goals.
In April, 2019, Nevada passed a bill that would require the state to generate 50% of its electricity from renewable resources by 2030 and aim for 100% carbon-free resources by 2050. (SB 358)
Following a move in 2016 by several casinos to access the wholesale power market, the Energy Choice Initiative received enough signatures to place it on the state ballot for NV’s 2018 General Election
If passed, Ballot question 3 would require State legislature to establish an open, competitive retail market that prohibits the granting of monopolies and exclusive franchises for the generation of electricity by 2023.
As of November 2019, the State of Colorado is considering a CCA study bill, sponsored by Representative Edie Hooton, that has two elements:
A technical and feasibility study to be done by an independent energy expert that would assess potential benefits, feasibility, risks, price competitiveness and exit fee methodology/costs, and
An investigatory docket opened by the Public Utilities Commission that would assess regulatory and statutory implications of CCA in Colorado.
The proposed bill is expected to be introduced in Colorado’s 2020 legislative session.
In January, 2021, Colorado Govenor Jared Polis presented a new plan to reduce greenhouse gas pollution with a goal of reaching 100% renewable energy by 2040.
Click here to view a presentation LEAN made to Colorado’s Energy Legislation Review Interim Committee in November, 2019.
In the News:
Colorado governor releases final plan to reduce emissions by 90%. It’s still too vague, environmentalists say. January 14, 2021, The Colorado Sun
Several cities have indicated interest in the CCA model. Click here for LEAN’s recent presentation to AZ-ISA.
In March, 2020, the Maryland House of Delegates passed HB 561 that requires state agencies to draft rules allowing local communities to negotiate directly with energy utilities to set strong renewable energy goals and lower electricity rates. The COVID pandemic forced the General Assembly to end its session early.
Maryland lawmakers will consider a recently introduced bill, HB 768, that would allow a community choice energy pilot program in Montgomery County in the 2021 legislative session. See more details here: Tom Hucker: Allow Maryland Communities to Expand Clean Power. Marylandmatters.org, February 16, 2021.
LEAN defines ‘best’ as CCA programs that have a triple bottom line: more customer choice, more affordable rates, more clean power.