Community Choice Aggregation (CCA), also called Community Choice Energy, municipal aggregation, governmental aggregation, electricity aggregation, or community aggregation, is an option that allows local groups in the United States to combine the buying power of individual customers in a specific area to negotiate energy supply contracts. The CCA selects the source of electricity on behalf of the customers.

By combining their purchasing power, these groups can make large contracts with energy providers, which individual buyers might not be able to do. The main goals of CCAs are to either reduce costs for consumers or give them more control over the type of energy they use, often by offering energy sources that are cleaner than those provided by local utilities. Eight states in the United States have passed laws that allow CCAs: Massachusetts, Ohio, California, Illinois, New Hampshire, New Jersey, New York, Rhode Island, and Virginia. Together, these programs serve about 15% of Americans in over 1,850 communities as of 2024.

How CCAs function in electricity distribution

CCAs are local, not-for-profit public agencies that make decisions about where electricity comes from. After being created, CCAs become the main electricity provider for customers in their area. In a CCA's service area, the current utility company still owns and maintains power lines, equipment, and handles customer bills. The city that starts a CCA forms a governing board, usually made up of local leaders, to decide how to buy electricity, set prices, and choose which local energy programs to support.

Renewable energy significance

Community Choice Aggregators (CCAs) have set several national records for using green power and protecting the environment, while also helping customers save money on their electricity bills. These achievements have earned recognition from the National Renewable Energy Laboratory (NREL) and the Environmental Protection Agency (EPA) for creating energy plans with high amounts of renewable energy that are also affordable compared to traditional energy sources like coal or nuclear power. In several large U.S. cities where CCAs operate, energy plans are much cleaner than those offered by local utilities or other providers, but they cost the same as regular energy plans. Because of this, CCAs are already leading the way in using renewable energy and have received awards from the EPA for their efforts. For example, Sonoma Clean Power provided 91% carbon-free electricity by 2019 and had 2,000 customers enrolled in a special program offering 100% renewable energy from local solar and geothermal sources. It also plans to build and manage six solar power plants in the Petaluma area.

Nationwide, only 13% of CCAs focus on offering "green power" because their main goal is to lower electricity costs for customers. In California, CCAs are required by state law to provide renewable energy, and many go beyond what the law requires. Between 2011 and 2018, California CCAs purchased 24 terawatt-hours (TWh) of renewable energy, with 11 TWh of that amount being extra, above what the law required, according to the UCLA Luskin Center for Innovation. In the United States, 64 of the 72 cities and counties powered entirely by clean energy are in California and are part of a CCA. In New York, about half of the energy sold by the only active CCA is renewable. In Illinois, Massachusetts, and Ohio, 90 CCAs provide renewable energy, but most do not offer it as the default option for customers.

Policy basis for CCAs

In the United States, Community Choice Aggregation (CCA) programs are allowed in nine states: Massachusetts, Ohio, California, Illinois, New Jersey, New York, Rhode Island, Virginia, and New Hampshire. Before a CCA can be created, the state must pass a law that allows it. So far, only states with deregulated electricity markets have passed such laws. This happens because electricity deregulation separates the roles of electricity generation from transmission and distribution, letting consumers choose their electricity provider. This separation allows CCAs to select the electricity generation mix for consumers without needing to build infrastructure to move electricity. However, only 17 states and the District of Columbia have deregulated electricity markets. The other 33 states are regulated, meaning their utilities have a monopoly over electricity generation, transmission, and distribution.

Early days

In Massachusetts, the nation's first CCA bill, known as Senate 447 Montigny, was created in 1995 by Paul Douglas Fenn, who was the director of the Massachusetts Senate Energy Committee. The bill was passed in 1997. The areas of Cape Cod and Martha's Vineyard came together to form the Cape Light Compact. They worked to get the important CCA legislation passed. Two of the Cape Light Compact's founders, Matthew Patrick, who was a Falmouth Selectman, and Rob O'Leary, who was a Barnstable County Commissioner, were later elected to the Massachusetts House of Representatives and the Senate. From 1995 to 2000, Fenn started the American Local Power Project. He worked with Patrick to create and pass similar laws in Ohio, New Jersey, and other states.

Massachusetts

The nation's first CCA, the Cape Light Compact, currently provides electricity to 200,000 customers. It operates energy efficiency programs and installs solar panels on Cape Cod schools, fire stations, and libraries.

By March 2019, approximately 150 cities and towns in Massachusetts had started using community choice aggregation, including Boston and Worcester.

Ohio

In Ohio, the largest community choice aggregation (CCA) in the United States was created in 2000 when the state legislature passed a law forming the Northeast Ohio Public Energy Council (NOPEC). This group includes about 500,000 customers in 112 cities and towns across 8 counties. NOPEC signed a contract to change the fuel used to make electricity from a mix of coal and nuclear power to a mix of natural gas and a small amount of electricity from renewable sources. The council also said that air pollution in the region would decrease by 70%. Unlike California’s CCAs, NOPEC provides both electricity to 510,000 customers and natural gas to 400,000 customers. Over time, the council has expanded to serve 228 communities in 14 counties.

In 2020, the city of Columbus, Ohio, approved a ballot measure that allows the city to create an electricity aggregation plan. This plan will provide 100% renewable energy to the city by 2023. The company chosen to supply this energy, AEP Energy, plans to build new wind and solar farms in Ohio to help produce the electricity needed.

California

In 2002, the California State Legislature passed Assembly Bill 117. This law created the foundation for Community Choice Aggregation (CCA) programs in California. The bill stated that CCAs, which are local, not-for-profit service providers managed by local elected officials, are the preferred default service provider in their area. The law required customers to automatically join their local CCA, but customers could choose to leave at any time to stay with their current utility. The law also clarified that in California, CCAs are not considered utilities and are legally defined as not-for-profit electric service providers.

After AB 117 was passed, the California Public Utilities Commission spent two years creating rules to govern CCAs. These rules, developed between 2003 and 2005, included:
• Phase 1 Decision: December 2004: Implementing parts of AB 117 related to CCA.
• Phase 2 Decision: December 15, 2005: Resolving issues about CCA implementation.

Once these rules were completed, CCAs became available to local governments in late 2005.

During the early years of California’s energy crisis, Paul Fenn, who helped write the original CCA legislation, started a company called Local Power Inc. He also drafted new CCA laws for California. A campaign led by Local Power encouraged cities like San Francisco, Oakland, Berkeley, Marin County, and some Los Angeles areas to support a state CCA law. This law, introduced by Assembly Member Carole Migden in 2001, became law (AB 117) in September 2002.

The creation of CCAs in California faced opposition from investor-owned utilities. In June 2010, Pacific Gas & Electric supported a ballot initiative called Proposition 16. This initiative would have made it harder for local governments to form CCAs or municipal utilities by requiring a two-thirds vote instead of a simple majority. However, opponents of the initiative, including clean energy activists and Local Power Inc., raised less than $100,000 to fight it. Despite spending over $46 million, PG&E’s initiative failed.

In 2004, San Francisco passed a CCA Ordinance written by Paul Fenn. This program aimed to build 360 megawatts (MW) of solar, wind, and energy efficiency projects to serve San Francisco customers using solar bonds. The ordinance combined CCA’s power to buy electricity with a new way to fund projects, called the H Bond Authority, allowing the CCA to finance renewable energy infrastructure worth about $1 billion. In 2007, San Francisco adopted a detailed CCA Plan, also written by Fenn, which set a goal of 51% renewable energy by 2017. Over the next decade, San Francisco and Sonoma worked with Local Power Inc. to design programs focused on using renewable energy and improving energy efficiency.

Inspired by efforts to protect the environment, CCA programs spread to many cities in the Bay Area and across California. In 2007, 40 California local governments were exploring CCA programs, most aiming to increase the amount of renewable energy (called the Renewable Portfolio Standard, or RPS) provided by the state’s utilities. As of November 2020, 23 CCAs served over 10 million customers in more than 180 cities and counties. More CCAs were expected to launch or expand in 2020–2021.

In April 2014, Assemblymember Steve Bradford introduced a bill (AB 2145) that would have limited CCAs’ ability to enroll customers. CCA supporters, along with local governments, businesses, and environmental groups, opposed the bill and successfully stopped it. The bill passed in the Assembly but failed in the Senate in August 2014.

The California Renewables Portfolio Standard (RPS) is a rule requiring all electricity providers in California to include a minimum amount of renewable energy in their power supply. All CCAs in California meet or exceed these requirements.

CCAs are managed by local government boards, usually made up of elected officials. They also follow state and federal rules and work with agencies like the California Public Utilities Commission, California Air Resources Board, and Federal Energy Regulatory Commission.

CCAs have been active in California since 2010. As of January 2020, 21 CCAs served over 10 million customers. These programs helped bring more than 3,000 megawatts of renewable energy, including solar and wind, to California. CCAs are the main buyers of renewable energy in the state.

All CCAs in California sign contracts for new renewable energy projects. In 2018, six of 19 California CCAs had agreements to buy new renewable energy, covering about 10% of their total energy needs and 1.6% of California’s total energy use.

Another issue for CCAs is the cost of exit fees. These fees are charges added to customers’ bills when they leave their current utility to join a CCA. The fees are called Power Charge Indifference Adjustments (PCIA) and are used to cover costs for customers who stay with their original utility. In California, exit fees have changed quickly over time. For example, in Pacific Gas & Electric’s area, exit fees dropped by 62% from 2012 to 2013 but increased by 211% from 2013 to 2016. The main problems with PCIA include unclear rules, lack of accountability, and difficulty in calculating fair costs for these fees.

Illinois

In 2009, the state of Illinois passed a CCA law, which caused more communities to provide electricity services to over two-thirds of the state's population by 2014. This included the city of Chicago, where former mayor Rahm Emanuel focused on reducing coal use and increasing renewable energy.

By October 2013, 671 cities and towns in Illinois (which covers 80% of the state's homes that use electricity) had used the CCA program. By the end of 2013, 91 local governments in Illinois (serving 1.7 million residents) used the 2009 CCA law to buy electricity from 100% renewable sources.

In 2013, customers saved over $250 million through the Illinois CCA programs. However, when fixed-price contracts with electricity providers ended, rates became more stable. In summer 2016, 114 communities stopped or paused their CCA programs. Chicago had the biggest change, with 750,000 homes (about 2 million people) joining the program at first. By 2015, most of these homes returned to their original electricity provider.

At the start of the CCA programs, the law guaranteed cost savings. Aggregators saved 30% below fixed utility prices during a time when utility rates were frozen to help new energy companies begin. CCA savings were highest in 2013, with customers saving $258 million compared to ComEd's default rate. But when ComEd's fixed-price contracts ended and rates matched market prices, short-term contracts set prices similar to other energy suppliers. This meant many CCAs no longer saved money, and customers spent $188 million more than the original utility's rate over two years.

New Hampshire

In 2019, New Hampshire changed its laws. In late 2022, the NH PUC created rules. In 2023, the Community Power Coalition of New Hampshire started with 12 communities. By the end of 2024, 52 communities joined, and 20 more were getting ready to start.

New Jersey

New Jersey passed a Community Choice Aggregation law in 2003, but did not begin creating aggregation programs until 2013. At that time, Bergen County, Passaic County, and fifteen other cities and counties started CCA programs. These programs aimed to lower electric bills and, in some cases, make their power supply greener.

New York

The New York State Public Service Commission (PSC) has agreed that Community Choice Aggregation (CCA) matches the goals of the energy reform plan called "Reforming the Energy Vision" (REV). The PSC also said that local energy planning helps towns benefit from energy resources that are spread out, as allowed by REV. In February 2014, a law about CCA was introduced in the New York State Assembly. In December 2014, Governor Andrew Cuomo ordered the PSC to carry out CCA directly under its own authority.

In December 2014, the non-profit group Sustainable Westchester asked the PSC to start a CCA program in Westchester County on behalf of its member towns. The PSC approved this request on February 26, 2015, allowing Sustainable Westchester to issue a Request for Proposal (RFP) and sign contracts for electricity and natural gas for homes and small businesses in towns that voted to join the CCA. The PSC noted that the program would help learn how to design and manage CCA, which would support future decisions about CCA across the state.

The program began in 2015, making it the first working CCA in New York State. Similar local efforts to create CCA programs are happening in Ulster County, Sullivan County, Hudson Highlands, and other areas.

Rhode Island

The Utility Restructuring Act of 1996 changed the way electricity is sold in Rhode Island. This law let customers pick their electricity supplier and allowed Community Choice Aggregators (CCAs) to form. However, there are no CCAs today that let homes or small businesses join. Only large government buildings, like those owned by cities, can use a CCA.

Rhode Island Energy Aggregation Program (REAP)

The REAP program is managed by the Rhode Island League of Cities & Towns. It helps 36 of Rhode Island’s 39 cities and towns, as well as four school districts, buy electricity. REAP works by asking for suggestions from approved electricity companies, reviewing their offers, and choosing the best providers for each area. In 2012, the program reported saving 20-30% on electricity costs compared to the usual price.

Advantages and disadvantages

Community Choice Aggregation (CCA) has both benefits and challenges when it is used in different areas. CCA offers advantages such as giving customers choices, lowering energy costs, using renewable energy, and helping the environment.

Customers can choose to join CCA or stay with their current energy provider. They are automatically signed up for CCA but can leave if they want. CCA helps lower energy bills for customers. It also increases the use of renewable energy sources like wind, solar, and geothermal power. This helps the environment by reducing the use of natural gas and cutting down on greenhouse gas emissions.

There are also problems with using CCA. These include political and financial challenges. CCA may face groups trying to stop it, issues from IOUs, fees for leaving the program, and problems when people choose not to join.

Politically, local governments may face opposition from groups. For example, Pacific Gas and Electric Company (PG&E), an IOU, supported California Proposition 16 in 2010. This proposal would have made it harder for California to use CCA. Another utility, San Diego Gas & Electric (SDG&E), tried to stop local governments from starting CCA programs. SDG&E created a separate group to work against CCA in San Diego County.