Exploring Community Choice Aggregation

Advocates of consumer choice, renewable energy, and local decision-making frequently refer to Community Choice Aggregation (CCA) as “energy democracy”. With CCA (sometimes called CCE for Community Choice Energy), consumers can choose the energy resource they wish to support through their electricity purchases. Moreover, CCAs are structured so that local, democratically-elected leaders are empowered to implement energy policies that reflect their community’s values. In this way, local governments can catalyze the transition to a more equitable and sustainable energy market for a healthier environment and economy.

Interested in CCA but don’t know what route is right for your community? Are you intrigued by the potential benefits of forming your own CCA, but wary about the process? Think you’d prefer to join an already existing CCA to circumvent the initial work of setting one up? Want to get started as soon possible? We hope this page provides you with the tools you need to make an informed decision on which path toward CCA is best for your community.

Established and Emerging CCAs in California

Which CCA Route is Best for Your Community?

There are unique benefits and challenges to forming your own CCA program versus joining an existing one, such as MCE. Only you, your neighbors, and your elected officials can decide which option is best for your community. We hope the following information will help facilitate your decision making process.

Additional Resources

Looking for general information? Check out our key documents or frequently asked questions.

Forming Your Own CCA

Information to Get You on Your Way

How to Form a CCA Guide – Developed by LEAN Energy US
Feasibility Study of California Clean Power, an outsourced CCA Model – Prepared for County of San Mateo

We’re excited to support your efforts to form your own CCA, and look forward to calling you an ally in the movement to provide more renewable power. As California’s first CCA, it took MCE several years to begin serving customers but the timeline has been much shorter for the recently formed CCAs. Given the success and awareness-building that has occurred since then, it is likely that your jurisdiction can launch a CCA in a much shorter time.

Below, you will find a collection of documents to help orient you to the history of CCA formation, and examples of official documents required for CCA formation. 

Joining an Existing CCA

As of October 2016, there are five operational CCAs in California– MCE, Sonoma Clean Power, Lancaster Choice Energy, CleanPowerSF, and Peninsula Clean Energy. Depending on the priorities, timeline, and location of your community, you may want to consider joining an existing CCA.

Please note that each CCA has different procedures for accepting new member communities. Lancaster Choice Energy and CleanPowerSF are not joint power authorities and therefore do not have the option to expand to new communities. The following is simply a description of the process to join MCE.

Information for Communities Interested in Joining MCE

MCE has established an affiliate membership process for communities with under 40,000 customers that are in or within 30 miles of the counties of Marin, Napa, Contra Costa, and Solano. In order to join MCE, a representative community council must submit a complete membership application so that MCE may conduct a membership analysis.

If a membership analysis demonstrates the inclusion of a new community will help decrease greenhouse gas emissions and will not have a negative impact on rates for existing MCE customers, MCE’s Board of Directors will hold a vote to provide service to your jurisdiction.

Upon membership approval, MCE will begin to plan for your community’s enrollment by procuring energy supply. Once a timeline for enrollment is determined, MCE will develop and implement a customized 6-month Community Outreach Plan to build public awareness about community energy choices before and after the enrollment of customer accounts in your area.

Key Documents

Frequently Asked Questions

Approximately $2.2 million in working capital, which was recovered within a year.

One note: While this is a helpful frame of reference for communities considering whether to form a new CCA, please keep in mind that communities with larger electricity loads than Marin might require more working capital to make their initial wholesale power purchases. This could in turn affect the length of the payback period, although would not necessarily make it longer.

In other words, if a county with larger cities using more energy wanted to form a CCA, the volume of energy and corresponding wholesale cost of the initial power could be greater. At the same time, wholesale energy prices also fluctuate year-to-year (and even month-to-month; week-to-week; day-to-day; etc.), so timing is a factor as well.

Either way, the main point is this: There are many variables and moving parts affecting the start-up costs and payback period for a CCA. Individual results may vary.

For MCE’s specific start up costs and timeline, please read MCE Start Up Timeline and Initial Funding Sources

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Usage data has traditionally been available on a 60-day time lag, though that may be a little shorter now. Once the request is filed, the response from PG&E can be anywhere between a week and three months. The processing time depends on their backlog. PG&E will then send the items requested back via secure file transfer.
Please see the PG&E tariff sheet which dictates these prices. While this is described as “Services to Community Choice Aggregators”, you’ll note the first paragraph indicates that this includes “communities who wish to explore CCA program implementation.”
Consultants must sign a non-disclosure agreement and must be using the data consistent with their work related to the CCA. In the case of certain vendors of services, PG&E may require a security audit. Please contact them for more information on this.

We typically request Item 16 and Item 17 data (as defined in CCAINFO). Item 16 provides broad account information, including names, addresses, account numbers, meter numbers, kWh usage, program participation (e.g. CARE), kW load (i.e. demand), rate schedules, etc. Item 16 data generally provides most needed information, with the exception that it provides aggregate usage data and does not provide any sort of time-of-use indicators.

Item 17 data has been also utilized by consultants to get a better idea of load demands; Item 17 data is generally much less revealing than Item 16 except that it includes interval data.

MCE’s Board of Directors is ultimately responsible for how revenues are spent. Each member city and county has a seat on MCE’s Board to help make these decisions.

There isn’t necessarily a limit to the number of times a customer can switch, but once people opt out, they are subject to PG&E’s terms and conditions. PG&E currently requires a one year waiting period before customers can return to MCE (or other CCAs presumably).

One caveat: the year-long wait to opt back to MCE may not apply to customers who opt out before the first 60 days of service (i.e., during the first two months of MCE service). So our general advice is to opt out as soon as they’ve made their decision. This is also helpful for both MCE and PG&E so that both organizations can accurately forecast their respective loads, and procure accordingly for their customer bases.

Also, with MCE, customers can opt up to Deep Green, or back down to Light Green whenever they like (i.e., typically by the next billing cycle). No waiting period required.

The CPUC’s December 2015 decision means the PCIA fee that’s charged to all California CCA customers (including MCE’s) increased on Jan. 1, 2016. The increase was approximately 78% across all customer classes, and up to 95% for some residential customers. Because this exit fee is assessed on a per kWh basis, its impact varies on a customer-by-customer basis.

With this increase, we anticipate residential customers may pay approximately 5% more with MCE than with PG&E bundled service–although the difference could only last until the next rate change. Again, it’s difficult to predict these types of cost comparisons for individual customers, since there are many variables that affect each customer’s bottom line (particularly fluctuations in usage, since the PCIA charged per kWh).

Please note: The CPUC agreed to hold a public workshop on the PCIA on March 8, 2016 to address issues regarding the transparency, accuracy and accountability of the PCIA methodology.

MCE’s Deep Green 100% renewable energy option charges a premium of $0.01/kWh (~$5/mo. more for the average MCE customer). Half of this premium is reserved in MCE’s Local Renewable Development Fund, which is dedicated to supporting local, distributed generation projects.

Now, MCE has over 195 megawatts of new, California-based energy in these contracts, which represents a commitment of $516 million to advancing sustainable development in our State.

Distributed generation remains a core value at MCE. This is why we have about 9 smaller scale projects (roughly 1MW – 10MW) currently in various stages of development. There are several projects being developed through MCE’s Feed-in Tariff (FIT). This is a standard offer contract which guarantees and above-market wholesale purchasing price to any renewable project built within MCE’s service area that is 1MW or smaller.

In late 2012, within MCE’s first three years providing power to customers, the first project developed through MCE’s FIT was completed at the San Rafael Airport. Although it is only one humble megawatt, it remains the largest solar facility ever developed in Marin County.

Regarding MCE’s renewable energy projects in Richmond, MCE has partnered with a San Jose-based solar company, Stion, to develop a 10.5 MW ground-mounted photo-voltaic solar facility, called ‘Solar One.’ Upon its completion (scheduled for November 2016), this will be among the largest solar facilities in Northern California and will be the largest municipally owned solar facility in the region. The project will be located on a 49 acre site at the Chevron refinery in Richmond, most of which is a former brownfield and unsuitable for other uses.

The Solar One project has 50% minimum local hire requirement, which MCE hopes to exceed. For these purposes, ‘local’ refers to the City of Richmond and the neighboring communities of San Pablo and unincorporated North Richmond. The project will be built in partnership with RichmondBUILD, a community-based, public-private partnership focused on cultivating talent and skills in construction and sustainable development. RichmondBUILD graduates come from low-income households, and it is an incredibly impressive program.

The vast majority of the time, a CCA and an IOU will be partners working together to deliver power to customers. The IOU is responsible for collecting meter data and sending bills to CCA customers. In the realm of generation, they will be competitors, competing to provide preferred generation products to customers.
The short answer is no. When a community votes to join a CCA, the CCA will enter into long-term energy procurement contracts on their behalf. If a community later changes its position and wishes to withdraw from the JPA, it may have to buy out these contracts, and this could amount to tens of millions of dollars. As such, while most JPA agreements contain a withdrawal provision, acting upon this provision would likely be prohibitively expensive. However, if a community wishes to stop receiving CCA generation services, they can always opt-out their own municipal electric accounts.
No. MCE’s member-jurisdictions are not responsible for the JPA’s financial liabilities. MCE’s JPA Agreement (signed by each member city/county and certified by the CPUC) creates a ‘firewall’ between the debts, assets and liabilities of the JPA and those of its member-communities. If a City decides to join MCE, it would not be responsible for any losses MCE incurs, nor would its general fund be applied to the debts, liabilities, or obligations of the JPA.

If this were to happen, MCE would be solely responsible for addressing and/or absorbing such losses. For this reason, MCE has been diligently saving some of its net revenues in a reserve fund to mitigate such risk. MCE’s Net Position (assets less liabilities) is approximately $30 million. MCE has contributed an average of $5 million per year to the Net Position over its six year operating history.

One point of clarification, MCE does not operate with fixed known number of customers, at least not in the traditional sense. MCE’s ratebase is dynamic (i.e., a certain percentage of customers are always opting out/up/or down). One of the primary objectives of community choice energy programs is to empower electricity consumers with options where none existed before. They can exercise those options at their own discretion on their own timeline. Consequently, MCE (and all other CCAs) have a market-based incentive to cultivate customer loyalty by providing the highest standard of service for the lowest possible price.

Still Have Questions?

Please let us know if there are other resources that you would find helpful to include here, and do not hesitate to reach out to us if we can answer any other questions about the process, the context, the opportunities, or the challenges of forming your own CCA. Looking forward to helping you flip the switch to cleaner energy.

Email info@mceCleanEnergy.org for more information.