What are Community Choice Aggregators
If you live in one of nine US states that authorize Community Choice Aggregation (CCA), you have a unique set of options for where you get your power. CCAs allow local municipalities to buy power from utility companies and distribute it to residents and businesses.
Here's what you need to know about CCAs.
Where do CCAs exist?
Currently, CCAs are found in California, New York, New Jersey, Ohio, Rhode Island, Massachusetts, and Illinois. Virginia and New Hampshire have passed legislation on CCAs, but have not yet implemented them.
Five states are investigating possible CCA options: Arizona, Colorado, Connecticut, Maryland, and Oregon. Washington has also indicated interest in CCAs.
Each state that authorizes CCAs has its own individual regulations in place with various opt-out and opt-in provisions for residential, business, and municipal customers. .
Why Would I Want To Take Part In A CCA Program?
CCA programs offer numerous economic advantages, with added environmental benefits as well. Ideally, the power purchased by a town or city would allow for residents and businesses to pay less for the power they consume. By buying large amounts of power, local governments may be able to negotiate energy rates far below standard pricing.
By avoiding energy costs dictated by utility companies, power from CCAs can alleviate the expense associated with energy consumption during peak hours. In states like California, for example, Time-of-Use (TOU) energy plans dictate rates by time of day, season, and day type. Peak hours vary but are often between 4pm and 9pm - during which energy rates may skyrocket for residents and businesses alike. Even when a CCA has TOU pricing, the rates are often lower than those provided through a utility company.
Towns and cities may choose to distribute power on their own or hire a third-party for the task. Either way, there's a sense of unity among participants as they take part in an energy plan that best meets the needs of their community. This also opens up job opportunities within local administrations for individuals who oversee the CCA.
Control over and choice of power consumption also extend to what type of power a CCA offers. Many CCAs operate entirely on renewable energy, offering a cleaner option that power drawn from a gas- or coal-fed grid.
What's The Downside of a CCA?
There are limits to what CCAs can do. From the outset, a CCA is difficult to implement. Only states with deregulated markets (there are 29 such states) have access to CCAs, and they need to be supported by local and regional governments. This further necessitates approval by residents of the communities themselves, often though a referendum or some sort of ballot initiative.
Running a CCA takes time, personnel, and oversight. Local governments may have to hire extra individuals, adding to their budgets and opening up additional tax burdens for residents. Hiring a third party to manage CCA programs includes comparable administrative costs.
When CCA are initiated, they are usually opt-out programs. Energy consumers receive notice of a CCA, but have to actively decide not to participate. Failure to do so results in automatic enrollment.
After enrolment, opting-out may still be available, but rules and conditions often apply. In contrast, provisions to opt-in to CCA programs require active sign-up but usually only extend to commercial and municipal customers.
CCAs don't always save consumers money. Even if a local town or city purchases a large amount of energy to distribute to residents, it may not be cheaper than what they would have gotten as standard utility customers.
Once that initial sum of energy runs out and a CCA contract is renegotiated, there's always a chance prices will go up from initial rates. Similarly, many CCAs that do use renewable energy may include additional costs for a cleaner energy option.