Municipal Investment in Clean Energy Tech through Community Choice Aggregation, with Rob Shaw

Computer-generated image of a pool of water and industrial facilities in desert land, at the foot of dry mountains.

Image: Computer-generated image of Hydrostor’s 4GWh Willow Rock project in California. Image By: Hydrostor

Script By: Jericho Rajninger Blurb By: Sophie Wenzlau Audio Editing By: Jericho Rajninger

What is Community Choice Aggregation?

Community Choice Aggregation (CCA) is a system that allows local governments to purchase power directly from an energy supplier other than the existing utility. This means that while the existing utility continues to deliver the power, the CCA buys and generates the power itself, potentially from renewable sources. CCAs continue to pay fees to the existing utility for energy transmission and backup power.        

While not required, CCAs can set ambitious climate goals that exceed state-mandated targets and drive decarbonization efforts by investing in emerging clean energy technologies. CCAs can take risks to transform their energy sources and grid in ways that traditional investor-owned utilities may be reluctant to try. When successful, CCAs can reduce electric rates for consumers and drive investment in local energy programs. But CCAs without sufficient capital may face financial and operational challenges.    

CCA programs are authorized in various states, including California, Illinois, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Ohio, Rhode Island, and Virginia. 

How does it work?

In states with enabling legislation, local governments can create a CCA by holding public hearings and passing a law authorizing CCAs. Participation in CCAs is voluntary, with most programs having opt-out provisions. This means customers are automatically enrolled in the program unless they choose to opt out and continue receiving electricity from their current supplier. Some CCAs may have opt-in provisions, requiring customers to actively enroll in the program. Customers under CCAs continue to receive delivery and maintenance services from their existing utility and receive a single utility bill reflecting the change in electricity generation sources and prices.

What are the pros and cons?

Advantages of CCAs include the potential for retail electric rate reductions, the ability to shift to greener power resources quickly, local control over electricity generation aligned with local goals, expanded consumer choices, and the potential to stimulate local job creation and renewable energy development. However, there are also challenges associated with CCAs, including dependence on enabling state legislation, navigating CCA regulations and ordinances, administrative costs, consumer confusion over opt-in and opt-out clauses, and potential resistance from utilities in traditionally regulated electricity states facing new competition from CCAs.

What is Central Coast Community Energy?

Central Coast Community Energy (3CE) is a CCA program that has procured and provided electricity to residents and businesses in Monterey, San Benito, Santa Cruz, and Santa Barbara counties in California since 2018. It is governed by board members who represent each community served by the agency.

3CE recently approved a contract to build the world’s largest Compressed Air Energy Storage (CAES) facility, which will provide 500 megawatts of energy storage. 3CE will reserve 200 megawatts of that capacity to help achieve its goal of serving 100% clean and renewable energy to its customers in Santa Cruz and Santa Barbara counties by 2030. The CAES technology uses underground caverns to store compressed air, which is later released to generate electricity, offering long-duration storage beyond the capabilities of lithium-ion batteries, and supporting grids reliant on intermittent renewable energy.

Further Reading

EPA, Community Choice Aggregation 

National Renewable Energy Laboratory, Community Choice Aggregation: Challenges, Opportunities, and Impacts on Renewable Energy Markets (2019)

CalCCA, Community Choice Aggregation (CCA): What is it?

National Renewable Energy Laboratory, Community Choice Aggregation (CCA) Helping Communities Reach Renewable Energy Goals (Mow 2017)

Local Energy Aggregation Network (LEAN), CCA by State

Metropolitan Area Planning Council (Boston, MA), Start a Community Choice Aggregation Program (2014)

National Renewable Energy Laboratory, Status and Trends in the Voluntary Market (2020 data), presentation materials (Heeter 2021)

Central Coast Community Energy (3CE), 3CE to Purchase 200MW of Long Duration Energy Storage from Hydrostor (2023)


Transcript

Ethan: I’m Ethan Elkind, and you’re listening to Climate Break: climate solutions in a hurry. Today’s proposal? How local governments can help advance clean energy technology. Investor-owned utilities dominate the electricity market in the United States… but community choice aggregators, or CCAs, offer an alternative, letting municipalities control their own energy strategy. In California, Central Coast Community Energy is pushing the limits of decarbonization. Here’s CEO Rob Shaw:

Rob Shaw: The investor-owned utilities are really driving towards climate goals set by the state. And while we think that those are ambitious goals, our goals get there a lot faster.

Ethan: Investor-owned utilities serve shareholders first and can be risk-averse in clean energy innovation. Shaw says CCAs should deploy new technologies that utilities won’t bet on. For example, Central Coast Community Energy is investing in Compressed Air Energy Storage, which could store surplus wind and solar to keep the grid carbon-free…

Rob Shaw:  I think of it as almost a reverse Super Soaker. This application uses water to compress the air. It generates heat in that process. That heat is captured and stored so that it runs the generator for that compression. And then when you want to discharge the battery, you release that air, it turns a turbine and generates electricity.

Ethan: Shaw wants to see local governments take more risks like this. He says policy changes could help.

Rob Shaw: We need to improve, I think, funding opportunities and really drive opportunities to invest in these technologies, whether that’s through an investment tax credit or a production tax credit.

Ethan: To learn more about how to form a CCA in your utility service area, visit climatebreak.org

Municipal Investment in Clean Energy Tech through Community Choice Aggregation, with Rob Shaw