Pros and cons of CCAs
Last updated 11/30/2022
Community choice aggregation (CCA) is a great way to save money on your electricity bills. But beyond the potential financial benefits, there are other societal and environmental benefits to consider when deciding to opt into or out of a CCA arrangement.
Pros of CCAs
Outside of potential economic benefits, here are some reasons why you may choose to participate in your local government’s CCA:
CCAs allow local governments to choose what sources of electricity they want to procure power from. As such, many CCAs are designed explicitly to provide residents, businesses, and municipal accounts in the community with renewable energy. Depending on how your CCA is structured, this could mean that a specific portion of your electricity is generated from renewables (i.e. 45 percent renewable, 55 percent other energy sources), or that 100 percent of the electricity you purchase from a CCA plan is clean, green energy. In 2017 alone, CCAs were responsible for delivering approximately 8.9 billion kilowatt hours (kWh) of green power to over 2.5 million customers in the U.S.
Most utility companies throughout the U.S. rely upon electricity generated from fossil fuels such as coal and natural gas. Generating electricity from fossil fuels releases carbon dioxide and other harmful greenhouse gases into our atmosphere, contributing to climate change and local air pollution. By switching your power source from the generic utility offering to a green CCA, you will help decrease both your and your community’s reliance on fossil fuels and carbon footprint.
Increasing the overall demand for renewable energy by participating in CCAs can mean the creation of new wind, solar, or hydro facilities. Building these projects helps to stimulate job growth throughout the country. Depending on where you’re procuring the power from, these renewable energy generators may be local and directly employ members of your community.
Local control over electricity
When your local government is responsible for procuring power on your behalf, the community’s preference in energy choice plays a role in the decision. Rather than only being able to purchase electricity generated by whatever sources your utility decides to use, you and your neighbors can aggregate your voices and choose an energy supplier that benefits your community and represents your communal values.
Cons of CCAs
While there are a number of benefits to participating in community choice aggregation, here are some of the potential downsides you may encounter while considering a CCA.
Lack of availability
CCAs aren’t available in most of the country. Even in states with active CCA legislation, you’ll need your local government to establish a CCA before you can participate.
As mentioned above, many CCAs advertize local energy job creation as a benefit to creating CCAs. However, it’s not a guarantee that your local government will choose to procure energy from local facilities or companies. In reality, some of the “green” electricity in your CCA’s energy mix may be renewable energy certificate (REC)purchases generated from wind or solar facilities located elsewhere in the country. Although these CCAs still promote the use of renewables and reduce reliance on fossil fuels, CCAs that don’t use local energy resources will do little to support local job creation and economic stimulation.
Use of fossil fuels
With a CCA, your local government gets to decide who to procure power from. While this often means supplying your community with greener power, this may not always be the case.
If you live in a state that has renewable energy mandates, CCAs need to comply with these regulations, just like any utility company generating power. However, if there aren’t regulations in the state or local laws about the type of power your government can procure under a CCA, much of the electricity in your CCA may be generated from fossil fuels. In fact, a study from the National Renewable Energy Laboratory reported that in 2017, only about 21 percent of all CCA sales were considered “voluntary” green power (i.e., exceeding the renewable requirements mandated by states).
Green alternatives to CCAs
If your primary motivation for participating in a CCA is using clean energy, then there are alternative energy options to consider. If you live in a deregulated electricity market, it’s worth comparing your community’s CCA plan with the cost of purchasing electricity through any retail energy providers that offer renewable energy options. You can also offset carbon-fueled electricity you purchase through your utility company by investing in renewable energy certificates (RECs) or carbon offsets. Perhaps the best option for saving money and benefiting the environment is to generate your own renewable power by installing a solar panel system on your own property.