By: Karen Villasenor
Authorized in California under AB 117 (2002), Community Choice Aggregation (CCA) programs enable local governments to purchase and generate electricity for residents, businesses and municipal facilities within a community. CCA programs provide ratepayers an alternative to electricity purchased and distributed by investor-owned utility (IOU) companies such as Southern California Edison and Pacific Gas and Electric Company.
Ratepayers served by IOUs receive electricity purchased from energy sources chosen exclusively by the IOU; however, CCA programs offer ratepayers the option to choose the energy source of their electricity. For example, Lancaster Choice Energy, the City of Lancaster’s CCA program, provides ratepayers two electricity energy source options: 35 percent renewable energy and 100 percent renewable energy.
CCA programs operate in partnership with the local IOU. While CCA programs purchase electricity from energy sources in the open market, the local IOU continues to manage transmission and distribution, grid maintenance and customer billing.
Despite Community Choice Aggregation being authorized in California in 2002, few local governments have established operational CCA programs due to the difficult process involved and naturally risk-averse local governments wanting to avoid “going first”. To date, approximately 60 cities have leveraged the option for CCA. Meanwhile, numerous CCA options have shown up in the market, including Marin Clean Energy, Sonoma Clean Power, Lancaster Choice Energy, CleanPower San Francisco, Peninsula Clean Energy, Los Angeles Community Choice Energy, South Bay Clean Power and Coachella Valley Association of Governments Community Choice Aggregation.
Unique among the models to aid cities in launching CCA’s is California Choice Energy Authority (CCEA), a joint powers authority founded by the City of Lancaster, a recognized innovator in power generation, energy efficiency and now community choice aggregation implementation.
CCEA has been built from the ground up by a city for cities, with the goal to help cities navigate the regulation-intensive process of launching a CCA while also minimizing the administrative overhead required to sustain a CCA by a city.
“Community Choice Aggregation programs can save money for ratepayers in cities, help cities promote green energy sources and generate additional revenue for the city needed to fund the administrative costs associated with CCA operations. Lancaster city staff learned a lot in 2014 when we launched our Lancaster Choice Energy (http://www.lancasterchoiceenergy.com/). As a City, we thought we could leverage our lessons learned and help other cities in the State get the ball rolling on CCA. We understand Community Choice Aggregation thoroughly enough to help local governments complete the implementation process efficiently,” says City of Lancaster Mayor R. Rex Parris.
CCEA can assist local governments in the CCA program establishment process by expediting and simplifying implementation. CCEA has the expertise and experience necessary to assist local governments in the complicated process and ensure smooth CCA program implementation.
CCEA is a hybrid joint powers authority (JPA) formed by the City of Lancaster and the City of San Jacinto. The hybrid JPA was designed to assist cities in California to establish CCA programs without assuming the liability of a single-entity CCA or minimizing local control and sacrificing benefits associated with traditional JPAs.
Members of CCEA benefit from the extensive knowledge and expert staff necessary to implement a successful CCA but unlike members of traditional JPAs, CCEA members continue to maintain total control through the CCEA’s hybrid JPA model.
“The JPA is structured so that a City’s general fund is protected,” says Mayor R. Rex Parris. “The only financial obligation for a city is through funds collected by Southern California Edison and deposited in a secure account that only each city can access.”
The City of Lancaster governs the CCEA; interested cities may join as associate members of the JPA. To lower costs and maximize revenues for each member, member cities set rates, purchase energy and contract their CCA services through existing CCEA contracts.
Under the CCEA model, cities also have the flexibility to develop energy programs and set rates that support their unique community goals. The CCA can offer a 100 percent renewable energy product, develop energy products that decrease generation costs for customers or develop special rates for customers.
The CCEA offers support for local governments in every phase of the CCA program implementation process. CCEA can provide feasibility services to determine whether a CCA program is appropriate and then develop implementation plans for members to submit to the California Public Utilities Commission (CPUC). Following approval from the CPUC, CCEA works with members through a nine-month implementation process to launch the CCA program. The CCEA continues to support members once their CCA program becomes operational.
The CCEA is staffed with individuals who successfully launched Lancaster Choice Energy and
partners with a variety of industry experts including The Bayshore Consulting Group, Pacific Energy Advisors, Direct Energy, Calpine Corporation, Braun Blaising McLaughlin & Smith, P.C. and Troutman Sanders. This experienced knowledge base allows the CCEA to support members in various roles including regulatory and legal affairs, rate analysis, financial projections, power procurement, project scheduling and many other roles.
Partnership with the CCEA is currently available to local governments in the SCE service territory. Local governments considering CCA programs do not have to go through the complex process alone; the CCEA can offer knowledge, expertise and guidance. To learn more about partnering opportunities with the CCEA please visit www.californiachoiceenergyauthority.com or contact Patti Garibay at (661) 723-6072 or firstname.lastname@example.org.
About the Author:
Karen Villasenor is a junior business analyst with Tripepi Smith, a marketing – communications – public affairs firm operating throughout California. Tripepi Smith counts among its 70+ clients the California Choice Energy Authority.