What Is Community Choice Aggregation (CCA)?

by Olivia Draycott

What is CCA?

The Community Choice Aggregation (CCA) programme provides local governments with the powers to buy and manage energy on behalf of citizens and businesses [1]. For example, it enables local governments to create an electrical buying organisation to purchase power from more sustainable energy sources, like wind or solar, rather than more traditional ones, like coal and gas [1]. As such, the local government invests in renewable energy sources and provides power to homes and businesses [2]. The CCA programmes’ goals are to provide local communities more control over the quality and cost of the energy they receive, as well as to promote the use of renewable energy sources over fossil fuels [3].

CCA’s have been implemented in several states across the United States, with the most notable being in California [3]. California introduced CCA’s in 2002 and has since created 20 of them to help facilitate independent control of energy and involvement of industries in cleaner energy sources [4]. In California, several CCAs have set renewable energy targets, such as 100% renewable energy by 2030 or 2045 [5]. 

Furthermore, through such programmes, residents and businesses have been able to reduce energy costs as the CCA’s offer energy rates that are significantly lower than those offered by traditional utility companies [6]. Notwithstanding these benefits, California has had challenges with the implementation of CCA’s. There is always the possibility that energy providers may go out of business because of such programs which means that renewable providers may lack bargaining leverage [7]. Regardless, the CCA’s in California are a good example of how CCA’s can lead to positive results.

Do CCA’s demonstrate a positive step for Climate Protection?

Since CCA’s give local governments and communities the ability to choose their energy supply  and prioritise renewable energy sources, they play a vital role in climate change mitigation [7]. The ability for communities to purchase electricity from various sources at potentially cheaper rates than traditional energy suppliers means that renewable sources become the cheaper, and often more desirable option [8]. They emphasise renewable energy sources including wind, solar, and  geothermal, assist in the reduction of greenhouse gas emissions and promote a change to cleaner energy sources [7]. CCAs can also aid in reducing dependency on fossil fuels, which are a significant cause of climate change [8].

However, CCA’s are not guaranteed to result in a complete shift towards climate protection. This is because of the possibility that non-renewable sources may still need to be relied on to some extent. For example, during periods of high demand or when renewable sources are unavailable, local governments involved in CCA may need to rely on non-renewable sources such as natural gas [9]. This can even mean that they cannot prioritise renewable energy sources when they need to, and thus inevitably contribute to climate pollution [9]. Additionally, uncertainty in the market may cause CCAs to negatively impact the environment rather than preserve it [10]. This is because energy market instability can make it more difficult for CCAs to buy renewable energy sources at reasonable prices [10]. CCAs may have challenges trying to negotiate long-term contracts for renewable energy which may ultimately hinder their ability to reach their stipulated renewable energy goals. 

While CCAs signify a step in the right direction towards positive action on climate change, there are difficulties and uncertainties related to their implementation. When they develop and run CCA programmes, local governments must carefully take into account these difficulties and seek to reduce any possible hazards whilst at the same time promote the positive opportunities associated with renewable energy sources. 

Reference List:

[1] EPA, ‘Community Choice Aggregation’, (2022). Available at: https://www.epa.gov/green-power-markets/community-choice-aggregation  (Accessed: 27 March 2023).
[2] Public Utilities Commission, ‘CCA Regulatory Information’, (2023). Available at: https://www.cpuc.ca.gov/consumer-support/consumer-programs-and-services/electrical-energy-and-energy-efficiency/community-choice-aggregation-and-direct-access-/cca-regulatory-information  (Accessed: 27 March 2023).
[3] CALCCA, ‘Powered by Community Choice’ (2023). Available at: https://cal-cca.org/powered/  (Accessed: 27 March 2023).[4] CALCCA, ‘Program Highlights’, (2023). Available at: https://cal-cca.org/programhighlights/ (Accessed: 27 March 2023)
[5] California Energy Commission, ‘California Releases Report Charting Path to 100 Percent Clean Electricity’ (2023). Available at: https://www.energy.ca.gov/news/2021-03/california-releases-report-charting-path-100-percent-clean-electricity (Accessed: 27 March 2023).
[6] California Public Utilities Commission, ‘CARE/FERA Program’ (2023). Available at: https://www.cpuc.ca.gov/industries-and-topics/electrical-energy/electric-costs/care-fera-program  (Accessed: 27 March 2023).
[7] Luskin School of Public Affairs, ‘The Promises and Challenges of Community Choice Aggregation in California’, (2019), Available at:  https://innovation.luskin.ucla.edu/wp-content/uploads/2019/03/The_Promises_and_Challenges_of_
Community_Choice_Aggregation_in_CA.pdf (Accessed: 27 March 2023)
[8] Energy Sage, ‘Pros and cons of CCAs’, (2022), Available at: https://www.energysage.com/other-clean-options/community-choice-aggregation/cca-pros-cons/ (Accessed: 27 March 2023)
[9] Fitch Wire, ‘Community Choice Aggregator Risks Highlighted by Bankruptcy’, (2021) Fitchratings.com. Available at: https://www.fitchratings.com/research/us-public-finance/community-choice-aggregator-risks-highlighted-by-bankruptcy-02-06-2021#:~:text=Inadequate%20risk%20management%2C%20unexpected%20spikes,provide%20competitively%20priced%
20power%20supply (Accessed: 27 March 2023).
[10] Gunther, S. and Bernell, D, ‘Challenging the system: The role of community choice aggregation in California’s transition to a renewable energy future, The Electricity Journal, (2019) Available at: https://www.sciencedirect.com/science/article/abs/
pii/S1040619019302842 (Accessed 27 March 2023)

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