Community Choice Aggregation (CCA), also known as Community Choice Energy, municipal aggregation, governmental aggregation, electricity aggregation, and community aggregation, is an alternative to the investor-owned utility energy supply system in which local entities in the United States aggregate the buying power of individual customers within a defined jurisdiction in order to secure alternative energy supply contracts. The CCA chooses the power generation source on behalf of the consumers.
By aggregating purchasing power, they are able to create large contracts with generators, something individual buyers may be unable to do. The main goals of CCAs have been to either lower costs for consumers or to allow consumers greater control of their energy mix, mainly by offering greener generation portfolios than local utilities. Eight states in the United States have enacted CCA enabling laws: Massachusetts, Ohio, California, Illinois, New Hampshire, New Jersey, New York, Rhode Island, and Virginia. Collectively, they serve about 15% of Americans in over 1850 municipalities as of 2024.
How CCAs function in electricity distribution
CCAs are local, not-for-profit, public agencies that take on the decision-making role about sources of energy for electricity generation. Once established, CCAs become the default service provider for the power mix delivered to customers. In a CCA service territory, the incumbent utility continues to own and maintain the transmission and distribution infrastructure, metering, and billing. The municipality initiating the CCA sets up a governing board, usually made up of local elected officials, which makes key decisions about procurement, rates, and what local energy programs to fund.
Renewable energy significance
CCAs have set a number of national green power and climate protection records while reducing power bills, a rare combination that has won National Renewable Energy Laboratory (NREL) and Environmental Protection Agency (EPA) recognition for achieving significantly higher renewable energy portfolios while maintaining rates that are competitive with conventional fossil and nuclear-based utility power. Several major U.S. population centers under CCA have switched to energy portfolios that are an order of magnitude greener than local utilities or other direct access providers, but charge no premium above utility or direct access rates. CCAs are therefore already conspicuous leaders in green power innovation, receiving U.S. Environmental Protection Agency's "green power leadership awards" for achievements in renewable energy (MCE Clean Energy; Oak Park, IL, Cincinnati, OH). By 2019 Sonoma Clean Power was providing 91% carbon-free power and had accepted 2,000 customers into its premium EverGreen Service, providing 100% renewable energy from local solar panels and geothermal plants. Additionally, it plans to own and manage six solar plants in the Petaluma area.
Nationwide, only 13% of CCAs offer "green power," as their primary focus is to reduce electrical power costs to their customers. California CCAs lead in offering renewable electricity because they are so required by state law. However, CCAs in California voluntarily purchase renewable energy at levels that exceed renewables portfolio standard (RPS) mandates. Between 2011 and 2018, CCAs in California directly procured 24 terawatt-hours (TWh) of RPS-eligible electricity, of which 11 TWh is voluntary or in excess of RPS compliance, according to the UCLA Luskin Center for Innovation. Further, of the 72 cities and counties that are powered by 100% clean energy in the U.S., 64 are in California and are members of a CCA. In New York state, about 50% of the only active CCA sales are green. An additional 90 CCAs in Illinois, Mass. and Ohio provide renewable energy; but most CCAs do not offer voluntary renewable energy as a default energy product.
Policy basis for CCAs In the US, CCAs are permitted in nine states: Massachusetts, Ohio, California, Illinois, New Jersey, New York, Rhode Island, Virginia, and New Hampshire. States must first pass legislation allowing for the formation of CCAs before an agency can form. So far only deregulated states (see electric deregulation) have enacted CCA legislation. This is a natural progression as electricity deregulation separates the functions of electricity generation from transmission and distribution allowing consumers to choose their electricity generator. This separation then allows for CCAs to choose the electricity generation mix on behalf of consumers without having to establish the infrastructure to move electricity. However, only 17 states and the District of Columbia have deregulated markets. The remaining 33 states are considered regulated, where utilities retain a monopoly on generation, transmission, and distribution of electric power. Legal Authorization for Community Choice AggregationStateYearAuthorizing LegislationAuthorizing Legislation NameMassachusetts1997M.G.L. ch.93A §1Utility Restructuring Act of 1997Ohio2001Local Ballot MeasureN/ACalifornia2002Assembly Bill 117Electrical Restructuring: AggregationIllinois2002 (residential)220 ILCS 5/Art. XVIElectric Service Customer Choice and Rate Relief Law of 1997New Jersey2003Assembly Bill 2165Government Energy Aggregation Act of 2003New York2016PSC Case 14-M-0224Order Authorizing Framework for Community Choice Aggregation Opt-Out ProgramRhode Island1996RIPUC No. 8124Utility Restructuring Act of 1996New Hampshire2019NH RSA 53-EAggregation of Electric Customers By Municipalities and Counties
Early days In Massachusetts, where the nation's first CCA bill (Senate 447, Montigny) was first drafted by Massachusetts senate energy committee director Paul Douglas Fenn in 1995 and enacted in 1997, the locales of Cape Cod and Martha's Vineyard formed the Cape Light Compact and successfully lobbied for passage of the seminal CCA legislation. Two of the Cape Light Compact founders, Falmouth Selectman Matthew Patrick and Barnstable County Commissioner Rob O'Leary, were subsequently elected to the Massachusetts House of Representatives and Senate respectively. Between 1995 and 2000, Fenn formed the American Local Power Project and worked with Patrick to draft and pass similar laws in Ohio, New Jersey, and other states.
Massachusetts The nation's first CCA, the Cape Light Compact, currently serves 200,000 customers, running aggressive and transparent energy efficiency programs and installing solar installations on Cape Cod schools, fire stations and libraries.
As of March 2019, about 150 Massachusetts cities and towns have adopted community choice aggregation, including Boston and Worcester.
Ohio In Ohio, the nation's largest CCA was formed in 2000 when the state legislature adopted a CCA law that formed the Northeast Ohio Public Energy Council (NOPEC), made up of approximately 500,000 customers in 112 cities and towns across 8 counties, procured a power supply contract that switched electric generation fuel supply from a mix of coal and nuclear power to a mix of natural gas and a small percentage of renewably powered electricity, and announced a 70% air pollution reduction in the region's power mix. Unlike California CCAs, NOPEC offers both electric power(510,000 customers) and natural gas (400,000 customers). The council has grown to 228 communities in 14 counties.
In 2020, Ohio's capital Columbus approved a city-wide ballot measure, giving it an electricity aggregation plan which will supply it with 100% renewable energy by the start of 2023. Its vendor, AEP Energy, plans to construct new wind and solar farms in Ohio to help supply the electricity.
California Overview In 2002, California State Legislature enacted Assembly Bill 117, setting the foundation for Community Choice Aggregation in California. The bill recognized that as local, not-for-profit service providers, overseen by their local elected officials, CCAs are the preferred default service provider in their service territory. So CCA law mandated that customers be automatically enrolled in their local CCA, with the ability to opt out at any time to remain a "bundled customer" with their incumbent utility. The law also makes the clarification that, in California, CCAs are by legal definition not utilities, and are legally defined in California law as not-for-profit electric service providers.
After passage of AB 117, two years of rulemaking followed at the California Public Utilities Commission. The fundamentals of CCA regulation are contained in this rule-making that occurred between 2003 and 2005: Phase 1 Decision: December 2004: Implementing Portions of AB 117 Concerning Community Choice Aggregation Phase 2 Decision: December 15, 2005: Decision Resolving Phase 2 Issues on Implementation of Community Choice Aggregation Upon completion of this rulemaking process, CCA became available to local governments in late 2005.
In the early days of the California energy crisis, Paul Fenn, the Massachusetts Senate Energy Committee director who conducted the legal research and drafting of the original CCA legislation, formed Local Power Inc. and drafted new CCA legislation for California. In a campaign organized by Local Power, the City and County of San Francisco led Oakland, Berkeley, Marin County, and a group of Los Angeles municipalities in adopting resolutions asking for a state CCA law in response to the failure of California's deregulated electricity market. Fenn's bill was sponsored by then Assembly Member Carole Migden (D-San Francisco) in 2001, and the bill became law (AB117) in September 2002.
CCA formation in California was delayed by initial political opposition by the state's investor-owned utilities. In June 2010, Pacific Gas & Electric sponsored a ballot initiative, Proposition 16, to make it more difficult for local entities to form either municipal utilities or CCAs by requiring a two-thirds vote of the electorate rather than a simple majority, for a public agency to enter the retail power business. Although PG&E spent over $46 million in an effort to pass the initiative Prop 16's opponents, a broad coalition led by grassroots clean energy activists, Local Power Inc., and The Utility Reform Network, raised and spent less than $100,000, Proposition 16 was defeated.
San Francisco adopted a CCA Ordinance drafted by Fenn (86–04, Tom Ammiano) in 2004, creating a CCA program to build 360 Megawatts (MW) of solar, green distributed generation, wind generation, and energy efficiency and demand response to serve San Francisco ratepayers using solar bonds. Specifically, the ordinance combined the power purchasing authority of CCA with a revenue bond authority also developed by Fenn to expand the power of CCA, known as the H Bond Authority (San Francisco Charter Section 9.107.8, Ammiano), to allow the CCA to finance new green power infrastructure, worth approximately $1 Billion. In 2007 the City adopted a detailed CCA Plan also written primarily by Fenn (Ordinance 447–07, Ammiano and Mirkarimi), which established a 51% Renewable Portfolio Standard by 2017 for San Francisco. Over the following decade, Sonoma and San Francisco worked with Fenn's company, Local Power Inc. on program designs focused on achieving energy localization through renewables and energy efficiency.
Inspired by Climate Protection efforts, CCA has spread to cities throughout the Bay Area and the state. In 2007, 40 California local governments were in the process of exploring CCA, virtually all of them seeking to double, triple or quadruple the green power levels (Renewable Portfolio Standard, or "RPS) of the state's three Investor-Owned Utilities. As of November 2020, there are 23 CCAs serving the energy needs of more than 10 million customers in more than 180 cities and counties throughout California, and more are expected to have CCA service in 2020–2021 as new programs launch and existing programs expand.