CCA was created by the California Legislature in 2002 (AB 117, Migden; PDF 47.4KB). It was developed in the wake of the failed attempt at utility deregulation in 1997, which had revealed significant flaws in the way that utilities procured electricity for their customers, including:
• Over-reliance on volatile, short-term markets.
• Price fluctutaions and market manipulation.
• Inadequate electricity supplies resulting in blackouts.
• Increasing dependence on natural gas-fueled generation.
In response to this, CCA provides an opportunity for local governments (cities, counties, or a combination of jurisdictions) to purchase electricity on behalf of their constituents. CCA is only responsible for the purchase of electricity; the delivery, metering, billing, operation and maintenance of wires remains the responsibility of the local utility. Participation in CCA is voluntary, and gives customers a means to control their energy costs and sources. Customers who prefer the status quo may opt out of CCA.
CCA is not the same as forming a municipal utility. With Community Choice the local community is only contracting for electrical power supply — not transmission or distribution. This allows for local choice of resources, and may result in a power mix different from that of the local utility, including greater use of renewable energy. With CCA, electricity is delivered to the customer’s home or business over the existing wires that are owned, operated and maintained by the investor-owned utility (i.e. PG&E). The customer will see no difference in service between taking power from a CCA program or from their current utility. In fact, they will continue to receive a single bill for electricity that will be issued by and paid to the local utility.
Community Choice helps to ensure stable rates while promoting energy efficiency within a more competitive market. By contrast, forming a municipal utility would include replacing the investor-owned utility with a locally-owned utility either via new construction of wires or condemnation of existing wires and other distribution infrastructure. This can be an expensive, risky, and contentious process.
CCA offers numerous potential benefits, including:
• Reduced dependence on fossil fuels;
• Increased use of renewable generation;
• Reduced greenhouse gas emissions;
• Increased energy efficiency and conservation in new generation methods;
• Local control of rate setting;
• Long-term rate stability;
• Potential for lower electricity rates over the long-term;
• Access to low-cost capital for local energy projects;
• Economic growth – dollars stay in local economy;
• Personal choice
It also has some potential risks, including:
• Lack of local experience in negotiating power purchase agreements;
• Volatility of energy prices;
• Potential for higher rates, especially regarding start-up and opt-out costs;
• Future regulatory uncertainty;
• Subsidy shifts--from industrial to residential customers, for example;
• Issues unique to Humboldt County – isolation and transmission constraints.
Locally there is growing interest in CCA as a possible means to ensure long-term energy sustainability for our region. Proposition 16 (Summary Analysis; PDF 211 KB) was defeated in the CA June 2010 election, revealing that CA voters favor their ability to create municipal utilities or community choice aggregations with a simple majority vote, rather than with a more stringent, two-thirds supra-majority vote. With CCA, the community can choose to increase the amount of renewable energy available in its electricity mix, which could encourage the development of additional local renewable energy projects.
Implementation of CCA is a complex process. Usually a feasibility study is required to identify the balance of benefits to risks which are dependent upon local circumstances.
At this time the Redwood Coast Energy Authority (RCEA) is not endorsing CCA, but it does encourage a local dialogue which may result in the development of a feasibility study to determine CCA appropriateness for Humboldt County. RCEA is also conducting a Renewable Energy Secure Community (RESCO) pilot study which includes CCA as a potential energy development and ownership model.
The following are links to information which may help to inform a community-wide dialogue on CCA:
General CCA Fact Sheets:
Legislation and CPUC Decisions:
Background Reports and Feasibility Studies
San Joaquin Valley Power Authority CCA Documents:
San Francisco CCA Documents:
PG&E CCA Tarriffs/Documents:
Northern California Power Agency:
RCEA will add to this list as more information becomes available. If you know of other useful CCA links please send them to info [at] redwoodenergy [dot] org. Thanks.
