CA Community Energy Offers Roadmap for Cities Across the U.S.

2 Feb 2021

A recent report from UCLA finds the phenomenal growth of community choice aggregation in California offers a template for other states interested in advancing local clean energy. And the possibilities grow under a climate protection-friendly president.

“In California, CCAs have become an effective tool at enabling local climate action,” a report by the Luskin Center for Innovation says. The CCAs spur investment in energy efficiency and electric vehicle charging programs, “tailored to the needs of their communities,” according to The Role of Community Choice Aggregators in Advancing Clean Energy Transitions report.

The variety of communities served by community energy in California, in terms of size, income and political affiliations, “suggests that CCAs could be implemented throughout the country,” said Kelly Trumbull, a Center researcher and lead author of the report.

The report highlights challenges as well. The California Public Utilities Commission, for example, recently took away CCA authority on resource adequacy by making private utilities the central procurers. That can impact the entities greenhouse gas emissions. Pacific Gas & Electric and Southern California Edison may buy natural gas to serve a resource adequacy supply cushion, “in direct conflict with a CCA’s goals for a greenhouse gas-free energy resource portfolio.”

Still, community energy continues to expand in this state.

Growing from 1% to 41%

A decade ago, Marin Clean Energy was California’s first community energy program, representing about 1% of the state population. Today, there are 23 CCAs, encompassing 182 cities and counties, that cover 30% of the population. This year, with the addition of the San Diego region, 41% of Californians are expected to be covered by community energy. San Diego Community Power will launch this March, initially serving municipal load in several cities.

Community energy’s portfolios by and large provide higher levels of renewables than the investor-owned utilities resources they replaced, and they come with local decision making.

The California aggregators have signed long-term contracts for more than 6,000 megawatts of new solar, wind, geothermal and energy storage facilities.

Until recently, all CCAs offered lower rates than their alternative because of more expensive long-term renewable agreements in the private utility portfolios, and lack of shareholder overhead. However, many of the utilities 10-year renewable deals have now ended and community energy is saddled with substantial exit fees. These cover the costs of resources the IOUs purchased before their customers split to join community energy. 

Some community energy organizations rates are higher than the competing private utility.

The automatic supply option, known as a default rate, provided by 8% of CCA member communities, 15 out of 182, is 1.5% to 8.6% more expensive than the affiliate IOU. But many of those are 100% renewables.

In more than a dozen cities within CCAs, all renewables is the default product, meaning it is the automatic choice unless another is made. That includes in Culver City, Malibu, Ojai in Southern California and Albany and Piedmont in the Bay Area.

“Despite the higher price for the 100% renewable option, these communities have not seen significantly more customers choosing to switch to a lower-cost product (opt down) or out of the CCA (opt out),” the report finds.

Blue and red voters like green

There is not a big Democrat-Republican divide on renewable resources, but the latter is generally focused more on cost.

UCLA concludes that in more heavily Democratic areas, the default share of renewable energy rose 4.9%, and carbon-free energy increases by 10.6%. But for every 10% increase in Republican voter preference, the default share of renewables fell by 4.2% and carbon-free energy decreases by 10.6% points, noting Republicans tended to highly value lower rates.

In 2019, CCAs had a weighted average of 50% renewable energy for a total of 80% carbon-free energy. More than two-thirds of the CCA’s default electricity is 90% carbon free.  

That same year, PG&E had 29% renewable energy and 100% carbon-free power. Southern California Edison had 35% renewable and 50% carbon-free energy. San Diego Gas & Electric had 30% renewable energy. 

Carbon-free resources include large hydropower and nuclear power. The nuclear portion has been a hot button issue in some CCAs, particularly in the Bay Area.

CCAs are required to pay for their proportional interest of PG&E’s Diablo Canyon power, whether or not they accept it. Clean local energy advocates say accepting the nuclear power prolongs the market for the aging plant’s output, which is neither clean nor local. Some of the CCAs, including East Bay Clean Energy, Marin Clean Energy and Sonoma Clean Power, are not counting this resource in their carbon-free supply products.

The report also touts decision making closer to the people. That allows Clean Power Alliance in Los Angeles and Ventura counties to offer low-income customers 100% renewable energy at the same price as the dirtier mix provided by the private utility.

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