If you live in Columbus, Ohio you might be hearing a lot about Community Choice Aggregation. It might sound wonky and technical, but if all goes according to the Mayor’s plan CCA will be on the ballot in November, so we thought we’d break it down a little, to help decipher Community Choice Aggregation for you.
What is CCA?
Community choice aggregation allows a municipality (like Columbus) to bid as a group on energy. This allows local governments to procure power on behalf of their residents, businesses, and municipal accounts from an alternative supplier while still receiving transmission and distribution service from their existing utility provider. Some benefits of CCA , when done correctly, include pooling users to create a demand for renewable energy, creating competition for current major electricity providers, incentivizing a local renewable energy market including jobs, and leveraging the power of public sector purchase to achieve other community benefits from the bulk purchase.
Only California, Illinois, Ohio, Massachusetts, New Jersey, New York and Rhode island currently have legislative authorization for CCA. As the second oldest, CCA was established in Ohio in 1999. Cincinnati and Cleveland both utilize community choice aggregation and have 100% green power options The state’s legislation requires a local government to hold a public hearing and pass a law authorizing the CCA.
Delivery and maintenance services of power and utility bills all remain the same, and in Columbus that means they will continue to be operated by our utility, AEP. CCA’s can have opt in our opt out provisions allowing customers to decide which supplier they want to receive their power from. The only changes with Community Choice Aggregation are the source of power and potentially the cost.
What are the Benefits of CCA?
The primary benefit is that aggregation gives cities the authority to create a demand for renewable energy. This type of policy helps incentivize the generation of renewable energy, and offsets the use of fossil fuel based energy sources. This bulk shift in consumption has proven environmental benefits and is a great step towards climate action.
CCA also can provide additional economic and social benefits depending on how the program is designed, the policies are crafted and the procurement is executed. When done correctly Community Choice Aggregation is an excellent way to create jobs, integrate workforce development, living wages and catalyze burgeoning 21st century economies. CCAs even have the potential to spur development of smaller-scale community based solar power, because smaller CCA solar jobs can be sited within the community and installed by local solar companies. They are even a way cities can leverage their procurement power to achieve additional community benefits from the private sector. However all of these benefits, even the environmental ones, require deliberate intention by policymakers to create equitable energy plans for their city. Just like every type of public policy, aggregation does not automatically equal equitable outcomes, and so the details are of utmost importance.
An excellent example of CCA done right is the East Bay Community Energy, a CCA in Alameda County, California serving as the utility to residents and businesses in 11 cities like Albany, Berkeley and Oakland. You can learn more about them here.
Is Community Choice Aggregation the only policy option?
Community Choice Aggregation isn’t the only type of aggregation out there. There are several ways aggregation can be used by businesses, residents and municipalities. The ultimate goal of aggregation is usually to leverage the power of many to reduce costs, or increase demand for renewable energy. Some different types of aggregation that communities can choose from include:
Energy Aggregation – is when a group of companies- or in this case the City of Columbus- buy energy in a bulk purchase- from a single developer or multiple developers, at smaller volumes while retaining the economic advantage of high-volume purchase. When done right it’s like collective bargaining for your energy bill- leveraging the power of multiple buyers to achieve economies of scale in price!
Project aggregation: creating a portfolio of projects, which blend a diverse range of renewable energy projects together. For instance, if Columbus wants to put solar on all of its libraries and they select one solar developer to install all the projects for a lower cost than each one individually. Project aggregation should reduce transaction costs for the buyer, capitalize on the economies of scale, and reduce the overall risk.
Buyer aggregation: This is when a non utility buyer combines efforts to increase buying power to access more projects. A great example of this is OH SUN, who organize neighborhoods to make bulk purchase of solar at a negotiated lower cost. These neighbors join forces to get better prices for their installations. (If you are thinking of putting solar on your home, and want to capitalize on buyer aggregation efforts, consider reaching out to our friends at OHSUN!)
