CCAs also allow for local control over retail electric rates. Choosing suppliers enables CCAs to curate an electricity portfolio that fits the needs and goals of the community-such as including a 100% renewable generation option. If a CCA does not own its own generation source, it may enter into short-term (one to three years) contracts with licensed entities known as “competitive suppliers” to procure electricity for its customers. the electrons themselves), may or may not take on the further responsibility of owning the generation resources. CCAs, being solely responsible for providing the energy commodity (e.g. CCAs are a hybrid between a fully public and fully private model, providing only generation, while the incumbent IOU’s maintain control of transmission, distribution, and customer billing. This then allows the CCA to set lower, independent rates for that power. The economy of scale allows the aggregator to purchase electricity generated from sources of their choosing in bulk on the wholesale market at lower prices. In California, the CCA model works by aggregating the electrical load of consumers in a specified area to create an economy of scale. For example, California enabled CCAs in 2002 with the passage of the Community Choice Aggregation Bill (AB 117), which authorizes customers to aggregate their electrical loads with a community choice aggregator.
Of those seventeen states, eight have passed CCA-enabling legislation to allow CCAs to purchase electricity on the wholesale market. Today, seventeen states and the District of Columbia follow a “restructured” model, whereby generation and transmission are unbundled to allow for consumer choice. In essence, the order allowed for the competitive wholesale trading of electricity. 888, allowing for the “functional unbundling” of wholesale generation from transmission services and requiring open access for unbundled retail transmissions. However, this monopoly was disrupted in 1996 when the Federal Energy Regulatory Commission (FERC) issued Order No. Under the structured system, IOUs received a natural monopoly over the electricity market in exchange for providing reliable service and reasonable rates. Under the traditional “structured” model, electricity services (i.e., generation, transmission, and distribution to consumers) were bundled together and controlled by private investor-owned utilities (IOUs). Since the launch of Marin Clean Energy in 2010, nineteen CCA programs now exist in California and reports estimate that 16% of the state load will be serviced by CCAs in 2020.
However, no state has seen more significant growth than California. Since the first CCA was established in Massachusetts in 1997, CCAs have continued to grow in popularity. Community Choice Aggregation allows local governments to aggregate the electrical loads of the residents, businesses, and institutions in their geographic region to purchase energy on their behalf. One such example is Community Choice Aggregation (CCA). In light of the federal government’s failure to enact comprehensive climate legislation, municipalities across the country have begun to tackle climate change at the local level. Electricity production is the second largest source of greenhouse gas (GHG) emissions in the United States, with approximately 62.9% of our electricity coming from non-renewable fossil fuels.
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