Communities Use "Choice Aggregation" to Fight Local Utilities

Taking over the local utility has traditionally been the only route for communities wishing to chart their own energy future.  California, Ohio and two other states have opened a door called community choice aggregation, but incumbent utilities been monkeying with the lock.

Community choice aggregation (CCA) offers an option for cities, counties, and collaborations to opt out of the traditional role of energy consumers.  Instead, they can become the local retail utility, buying electricity in bulk and selecting their power providers on behalf of their citizens in order to find lower prices or cleaner energy (or even reduce energy demand).  CCA is simpler than a takeover of the local utility (municipalization), supposedly lowering the bar to communities having more energy self-determination.  Four states have CCA laws on the books – Ohio, Rhode Island, Massachusetts, and California.  Most have only a single CCA organization; California has none.  

There's a reason: big utilities don’t like self-reliant communities.

In California, the CCA law passed in 2002 but utilities like Pacific Gas & Electric (PG&E) have stymied the development of local CCAs, even sponsoring a ballot measure – Proposition 16 – to require towns to get a two-thirds super majority to create a CCA.  The measure was narrowly defeated (with a 52% vote) despite $46 million spent by PG&E to steamroll local choice.  The ballot measure was only the latest in a series of attempts by PG&E to quash community choice, dating back to the utility's bankruptcy and $8 billion bailout in 2001-02. 

Advocates in California are continuing the fight with new legislation to clarify the original law’s admonition that utilities "cooperate fully" with communities seeking to establish a CCA.

Like municipalization, a CCA can make a big difference for a community’s energy outlook.  Ohio's largest CCA offers customers prices averaging 5% lower than the incumbent utility.  In California, the only certified (though not yet operational) CCA for the City of San Francisco – CleanPowerSF – intends to get 51% of its power from renewable sources by 2017.  In both cases, the community-run utility will serve the local interests better than the existing utility. 

Don’t tell the utilities, but you can read more about Community Choice Aggregation in our 2009 policy brief.

Photo credit: Flickr user Powerhouse Museum

This post originally appeared on Energy Self-Reliant States, a resource of the Institute for Local Self-Reliance's New Rules Project. Contact John Farrell at jfarrell@ilsr.org, find more content at energyselfreliantstates.org, follow @johnffarrell on Twitter, or friend the New Rules Project on Facebook.