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Community Choice Aggregation: What's Not to Like?

3p is proud to partner with the Presidio Graduate School’s Managerial Marketing course on a blogging series about “sustainable marketing.” This post is part of that series. To follow along, please click here.

by William Ray Yeager
Out of the California Energy Crisis of 2001 was born State Assembly Bill 117, empowering counties and municipalities to form their own energy cooperatives. As Groupon has done with consumer goods, Community Choice Aggregation (CCA) allows individuals to pool the buying power of their region and focus it in a direction chosen democratically by the constituents, which typically means more renewable energy generation and more energy efficiency investment. Under the status quoa California ratepayer can buy fair-trade coffee and organic cotton but has little power to influence how their electricity is generated. Through the development of a CCA structure, citizens can elect to set a standard for environmental stewardship that goes beyond the politically feasible pace set in Sacramento.

In the right context this plan sounds great. Ratepayers can freely choose whether or not to participate. If enough of them decide against opting out the CCA entity will have a steady revenue stream with which it can obtain financing to implement energy efficiency and renewable energy projects. Since 2001, however, the context has shifted in a number of significant ways.

For starters, Californians have gone from paying an average of less than nine cents per kilowatt-hour to over thirteen in 2011. At the same time the cost of renewable energy capacity has fallen like a photon. Perhaps most importantly, in the last few years California has led the world with its aggressive renewable portfolio standard. This program and others are implemented by the California Public Utilities Commission (CPUC), which though its oversight of PG&E, SCE and SDG&E has the power to achieve many of the goals envisioned by the founders of the CCA movement. If ratepayers had to petition PG&E for redress of grievances, some of them would die trying. With the help of the CPUC, however, Californians have been hugely successful in driving the investor-owned utilities away from quick profits and towards long-term energy security. Without the added expense incurred through years of feasibility studies and the costly creation of entirely new bureaucracies that would be required to implement CCA, California is already making huge strides towards a clean energy future.

To further illustrate how far we've come one need only examine a handful of the innovative programs being implemented today. One good example is the Utility Owned Generation (UOG) program which will bring 1,100 megawatts of solar photovoltaic electric capacity online over a five year period. Another truly progressive program is On Bill Financing through which businesses and government agencies can get zero interest loans for energy efficiency projects.

On the battlefield of investment decisions, and with help from public policy, businesses are moving toward energy efficiency and renewable energy in droves. Residential and commercial ratepayers have a variety of options available should they want to help further the development of clean technologies whether or not they have the choice to participate in CCA. Community Choice Aggregation was an excellent idea, but times have changed.