by Dr. Jan Hamrin
It’s a sexy idea with an unsexy name – “Community Choice Aggregation” or CCA.
A California law passed in 2002 allows communities served by private utilities to aggregate citizens who choose to participate and procure electricity for them without having to buy the poles and wires, as would be required for municipalization. And if a community wants to get more renewables than is required by law and maybe quit supporting nuclear, this is one way of doing it. The California Public Utilities Commission (CPUC) is responsible for laying out the rules for cooperation between the community providing the power and the private utility delivering it. Transmission of the power and maintenance and safety of the lines remains with the incumbent electric utility. The rates charged for the electricity purchased by the CCA, which accounts for about half the electric bill, is set by the community power authority. The local authority is governed by the local elected officials (in the case of a single city or county) or representatives from the elected body of each community in the case of multiple jurisdictions banding together. Customers have the right to opt out of participation in the program at any time, so it is in the best interest of the CCA to stay competitive with the incumbent utility while providing the services desired by the community, such as more renewable energy.
That’s what motivated Marin County, which lies just north of San Francisco, CA, and seven of its cities to start the first CCA implemented in the state, the Marin Energy Authority (MEA). Marin officials realized that the single greatest action they could take to reduce greenhouse gasses was to move the county’s homes, businesses, and public institutions more quickly to renewable power than was happening through their utility, Pacific Gas and Electric (PG&E). As a public authority, the MEA can purchase power from any providers and ultimately build its own power plants. The MEA is still in the early stages of implementation. It started serving commercial and industrial customers last year and will roll out to residential customers later in 2011. The MEA includes two electricity options: a “Light Green Option” that delivers as much green power as possible (currently about 26% compared to PG&E’s 16%) for no more cost to residents than they are currently paying; or a “Deep Green” option that delivers 100% renewable energy at the lowest cost available, which is currently only a penny per kilowatt-hour more than the Light Green option. The MEA recently requested bids for 40 megawatts of new renewable generation and received bids for over 600 megawatts.
The MEA has not had an easy time of it. PG&E opposed the program from the start with tactics that earned it sanctions from the CPUC. In addition, the concept of purchasing green power is not always easy for folks to understand. Some critics have said that it is impossible to deliver green electricity. That is true, but electricity is no different than other products we might choose to buy labeled “fair trade,” “FSC certified,” or “union made,” qualities linked to the production of products but not physically measurable in them. When we as consumers increase the demand for Fair Trade coffee, suppliers are moved to increase production. The same is true for electricity. When we demand more green power with our purchasing dollars than is required by law, suppliers are moved to develop more renewable generation. Since power flows into the grid wherever generators are located and flows out of the grid wherever there is demand, verification is about following the money so what consumers buy at one point is verified as supplied at another. Third-party certification, like the nonprofit Green-e Energy program, verifies that the money was spent as directed and that customers are getting what they paid for.
We will have to see how well the MEA is able to deliver on its promise of supplying a greener power mix at competitive prices, but so far they are off to a good start. San Francisco is also pursuing a CCA and Sonoma County recently decided to follow in Marin’s footsteps as well. So who would like to be next, maybe your community?
Jan Hamrin, Ph.D. is the founder of CRS and an energy policy expert. She can be reached janhamrin@HMWInternational.com.