What is community choice aggregation?
Last updated 6/7/2019
Community choice aggregation (CCA) is becoming an increasingly common way to purchase electricity in certain parts of the country. Also known as “municipal aggregation,” CCAs allow local governments to purchase energy on behalf of their constituents. As opposed to buying electricity from your utility company provides, local governments can invest in and purchase electricity from sources they deem fit to provide electricity to customers in their community. In many cases, communities create a CCA plan in an effort to deliver cheaper, cleaner electricity to properties in their area or to reach state-mandated renewable energy goals by procuring electricity directly from renewable energy projects.
CCA basics: how do CCAs work?
Traditionally, investor-owned utility (IOU) companies are responsible for both electricity supply–finding power plants to generate electricity–and delivery–sending that electricity across poles and wires to your home. Your electric utility can use a number of different resources to supply electricity, including coal, natural gas, and renewable energy power plants. CCA plans work a bit differently: the source of electricity is chosen by your local government instead of by your utility. You’ll continue to receive a monthly electricity bill from your utility, as they are still responsible for the delivery of electricity, including maintaining transmission infrastructure and electric meters throughout your area.
Unlike purchasing green power from a retail electricity provider (REP), you won’t get to singularly decide where your electricity is coming from. Rather, the decision is up to your local government: the role of CCAs is to aggregate consumer demand into a unified purchasing block representative of similar values. This requires your community to first decide to organize a CCA, and to then choose what type of power they want to buy, and where to procure that electricity from.
CCAs are not currently available in the majority of states in the country. As of early 2019, only eight states have passed legislation allowing municipal aggregation: California, Illinois, Ohio, Massachusetts, New Jersey, New York, Rhode Island, and Virginia.
Green power in CCAs
When your local government procures electricity on your behalf, they have the power to choose where that electricity is coming from. As a result, many CCA plans are built to supply residencies, businesses, and municipal electricity accounts with electricity from renewable sources.
There are a number of reasons why a community may choose to do this; for one, many local governments use CCAs as a way to support or achieve local or state-mandated renewable energy goals. CCA plans are held to the same renewable energy generation mandates that an IOU is, as dictated by a state’s renewable portfolio standard (RPS). This means that if your state has an RPS, any CCA enacted in your state needs to include a portion of renewable energy in its mix in compliance with the target.
That said, your local government may choose to go above and beyond the state’s renewable target and procure more clean power than is mandated in order to support the environment or because of popular demand. If people in your community are advocating for a switch to renewable power, it gives your local government all the more reason to do it. By procuring clean energy for their constituents as opposed to fossil-fuel-powered electricity, your local government will reduce your community’s reliance on fossil fuels and lower carbon emissions. Any renewable energy procured past the necessary minimum is considered “voluntary green power.”
Participating in a CCA
Before your community can create a CCA program, your state needs to enact legislation approving and allowing for community aggregation. Within states that have enacted CCA legislation, local governments must set up their own public hearings to ensure local buy-in from electricity purchasers in the community in order to ultimately approve a local CCA plan. After community approval of a CCA, the local government must give electricity customers in their area advanced notice of the CCA before it’s officially implemented.
Even if you’re in a town that has a CCA program, you’re not required to participate in the arrangement. All CCAs are voluntary. Depending upon your town and how the CCA is structured, you’ll have at least one of the following options:
Opt out: your electricity will be switched over to the CCA unless you opt-out
Opt in: you will need to actively request to join the CCA plan if you wish to participate
Opt up: your CCA has an option to switch to a higher-portion of renewable energy (i.e. 100 percent renewable energy mix) than the community’s standard plan. There’s typically an added cost of electricity for opting up in a CCA.
Opt down: your default CCA has an energy mix that has a higher percentage of renewable energy than mandated by state regulations (i.e. includes “voluntary green power”), but there is a lower-cost product that you can opt down to.
You’ll receive advanced notice of any deadlines for opting in and out of a CCA. If you opt out of a CCA past the specified deadline, you may incur an additional cancellation fee.