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CCA FAQ A guide to what Community Choice Aggregation means - and how it will affect you.
What is Community Choice Aggregation? Community Choice Aggregation (CCA) is a program authorized by state law that allows cities to pool together residents, businesses, and municipal facilities for the purchase of electricity. If the program moves forward in San Francisco, the city would purchase power in bulk directly from competing suppliers, and re-sell it to residents and businesses. Can San Francisco really handle this kind of complex system? Yes -- and it's not that complicated. Aggregation has been tried elsewhere in the country with great success. "CCA is a tried and true strategy," says San Francisco Supervisor Ross Mirkarimi. "It will benefit ratepayers--both commercial and residential." One CCA success story is Ohio. A recent annual report by the Northern Ohio Public Energy Council (NOPEC), a community aggregator, indicated that the program had saved its customers $29 million dollars since 2001 (see Aggregation Works, 7/20/05). Experts are optimistic about CCA's chances for success in the Bay Area. In 2003, the Local Agency Formation Commission commissioned a study by R.W. Beck and Associates, the highly respected Sacramento energy consulting firm, which concluded that local customers could save as much as $30 million a year with CCA. How can CCA deliver electricity that's cleaner and more reliable than PG&E power-at a discount? For starters, the city won't be out to make the huge profits that PG&E makes, and won't be paying multimillion-dollar executive salaries and bonuses. CCA is also designed to lower energy prices by making suppliers keep their prices competitive, and that's worked elsewhere. San Francisco, for example, could buy bulk power from any number of supplies, who would have to compete to offer the lowest and best bid. San Francisco consumers would also be protected against any potential rate increases: According to a recent draft of the CCA plan, the city "will not approve ny contract with an ESP that would result in a rate increase when customers transfer to the new service, but shall incorporate a 'meet or beat PG&E rates' cap for the ESP solicitation." The document approved on May 10, amended on July 6, can be downloaded here. By giving the city control over its power suppliers, CCA also allows the city to take advantage of cleaner energy sources. In Ohio, NOPEC chose to purchase electricity from an organization called Green Mountain Energy, which uses natural gas and renewable resources to produce power that is 68 percent less polluting than the conventional power used in the region. How does CCA further public power? It's a big step. Under CCA, a city agency would be buying electricity and selling it to retail customers, as well as setting rates. Among other things, a successful CCA program will demonstrate that the city is perfectly capable of running an electric utility. There's a key drawback to CCA: PG&E will still own the local transmission lines. The city will pay a fee to have the private company deliver power along those lines. If San Francisco were to go to fully municipalized power, the city would buy out those lines -- and stand to make much more money. But according to Paul Fenn, it "broadens the scope of the public power movement by focusing the debate about public power." Will CCA shut down electric power plants in Hunter's Point? Not by itself. Shutting down the plants is complicated, and requires the city to convince state agencies that there's enough locally generated power to handle a significant percentage of the city's needs. PG&E has promised to shut down the filthy Hunters Point plant in 2006. The Mirant plant can be scaled back if the city uses turbine generators to replace some of the Mirant power. But anything that gives the city more control over its electric supply is a step towards energy independence, and if CCA is a step toward public power, it's also a step toward reducing fossil-fuel generation in the city and ultimately to giving the city more say over how power is generated. How many states are currently pursuing CCA? Twenty states are currently pursuing CCA -- Arkansas, Arizona, California, Connecticut, Illinois, Maine, Maryland, Massachusetts, Michigan, Montana, Nevada, New Hampshire, New Jersey, Ohio, Oregon, Pennsylvania, Rhode Island, Texas, Virginia, and West Virginia. How many California cities are currently pursuing CCA? San Francisco has been "the leader in this for seven to eight years," says Samantha Rodgers of Greenpeace. But San Francisco isn't alone-more than 50 other California cities and counties are also pursuing community power. In the greater Bay Area, Berkeley, Oakland, Emeryville, Richmond, Vallejo, Antioch, Oakley, and Pleasanton are looking into aggregation. Marin County-which includes eleven cities-has conducted feasibility studies and expects an enabling ordinance for CCA to come to vote by the end of 2005, according to Cynthia Connolly, an aide in Supervisor Hal Brown's office. Elsewhere in California, smaller towns and cities have grouped together to form district-wide aggregators. In the Kings River Conservation District eleven cities and one county have made a financial commitment to aggregation. (Reedley, Parlier, Fresno, Hanford, Kingsburg, Lemoore, Kerman, Clovis, Dinuba, Corcoran, Selma, and Kings County.) And a further three cities and two counties (Sanger, Fowler, San Joaquin, Fresno County, and Tulare County) are interested in joining the KRCD, says Cristel L. Tufenkjian, KRCD public affairs officer. In eastern California, South Lake Tahoe, Placerville, and El Dorado County may soon move closer to developing CCA. El Dorado County's Water Board Agency has expressed "broad interest" in CCA and will discuss it in a county meeting later this month, according to county counsel Fred Schaefer. There's plenty of interest in community power in Southern California, too. A group of ten cities in L.A. County has come together to form the Southern California Cities Joint Powers Consortium. (Culver City, Lomita, Carson, El Segundo, Hawthorne, Lawndale, Cardena, West Hollywood, Eaglewood, and Redondo Beach). L.A. County has a supporting role, said Albert Vera, executive director of the consortium. Beverly Hills, Santa Monica, and Victorville have started looking into aggregation, too. Together with Victorville, San Marcos, in San Diego County, has taken steps towards developing a hybrid green power plant that will generate solar thermal power. Each city is also looking into CCA. In 2000 San Marcos created a city-owned utility, the Discovery Valley Utility, to give the city more control over its power supply. Because studies have shown that CCA will save consumers money, there's public support of CCA in San Marcos, said Carl Schwarm, a senior administrative analyst with the City of San Marcos. Chula Vista, also in San Diego county, have taken steps toward aggregation, but are waiting for the CPUC to set guidelines before moving further. The city is "watching closely and monitoring closely" the CPUC's next moves and want to "make sure the guidelines are reasonable," but are "cautiously optimistic," said Liz Purcell, Chula Vista director of communications. Can community choice aggregation work with other utility services like natural gas? What about telephone and cable service? Natural gas is, well, a natural. "CCA allows cities to bundle customers together in order to purchase power at more affordable rates, so natural gas and wind power would fall under the rubric of CCA," says Supervisor Tom Ammiano. In Ohio, NOPEC has already used the CCA system to purchase gas in bulk for its participating communities. Although cable, telephone, and Internet operate differently than utilities like gas and electricity, the CCA model could potentially work with them in the future. "CCA and telecom services are two different animals that follow two different sets of laws," Ammiano said. "However, both ideas are similar in that they originate from the same desire for public control and oversight of basic services such water, power, and telecommunications." Where can I get more information on CCA? Local Power: Extensive CCA news and information from Local Power, an Oakland-based advocacy group.
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