Community Choice Aggregation

Click to enlarge

Community Choice Aggregation (CCA) is a system that provides entire cities, counties and special districts to aggregate the energy buying of customers.  The structure is not by definition a utility.  However, CCA activity is displacing significant demand from utilities in Massachusetts, New York, Ohio, California, New Jersey, Rhode Island, and Illinois.  Community choice aggregation is also supporting green commitments by local governments that aligns better with local demand.

“The Missing Buyer”

CCA programs offer project developers of wind energy, solar power systems and microgrid storage with an emerging new market.  In practice, however, the CCA’s disrupting standard PPA marketing and the bilateral contracting between project developers and utilities.  For example, when CCA systems are set up, entire cities and counties can opt-in and out at will.  Customer switching is creates significant uncertainty in utility power demand and supply soucring.  And many utilities fear the switch will be long-term  Project developers, in turn, are seeing traditional buyers hold back.  At thwe same time, the emerging CCA buyer typically lacks standard tendering and operating procedures.  The result: the “missing buyer” lost in transition.

Click to enlarge

A case in point: Philip Anschutz’s Chokecherry and Sierra Madre project.  That project seeks to be America’s largest wind farm.  Anschutz has begun to build the 1,000 turbine (3 GW DC) project in Carbon County, Wyoming. He’s also planning to build the 730-mile TransWest Express power line to send the wind farm’s clean energy to the Eldorado Substation south of Las Vegas, near the California border. In theory, Anschutz should be able to transmit electricity to buyers in California, Arizona and Nevada.  Unfortunately, the project has no PPAs yet .  The California market, is proving to be very challenging.

Roxane Perruso, vice president and general counsel for the Anschutz Corp., represents the $5 billion Anshutz project.  She recently told Wyoming lawmakers that “securing a buyer for the wind power generated by the unbuilt project is no sure thing”, according to local press reports. California’s 50% RPS promises strong demand long-term, but if utilities are not actively procuring renewable energy in California and the CCA programs lack buying momentum as customer migrate to them, then RPS demand is being curtailed.  

What is Community Choice Aggregation?

CCAs are local, not-for-profit, public agencies that take on the decision-making role about sources of energy and electricity generation. As a result, 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. In some states, CCAs may be considered de facto public utilities of a new form that aggregate regional energy demand and negotiate with competitive suppliers and developers.  This is different from the traditional utility business model based on monopolizing energy supply.

Why are CCA’s Significant?

First of all, CCA offer the potential for large power demand.  In addition, CCA’s are breathing new life into power sector deregulation, which for many progressive people has failed miserably.  Finally, CCAs have set a number of national green power and climate protection records while reducing power bills.  That’s a rare combination.  As a result, CCA’s have won recognition from NREL and the EPA.

Conventional fossil and nuclear-based power companies have been slow to switch to renewable energy.  Instead, several major U.S. population centers under CCA systems have switched to energy portfolios that are greener and offer power at a discount to utility pricing. CCAs, therefore, are becoming conspicuous leaders in market innovation.  CCA’s are using local government policy as a platform for change, for financing and for integrating a transition to renewable energy sources.

This entry was posted in Website. Bookmark the permalink.

Leave a Reply

Your email address will not be published. Required fields are marked *

2 × three =