This page is intended to clarify questions about a potential Community Choice Aggregation (CCA) program in San Luis Obispo County. SLO Clean Energy is working with stakeholders and local government officials to examine the economic benefits, risks, and feasibility of CCA in SLO County.
What is SLO Clean Energy?
SLO Clean Energy is committed to local clean energy for communities within San Luis Obispo County. We are a volunteer-based ad hoc coalition utilizing our expertise to support the exploration and formation of a Community Choice Aggregation (CCA) program – an effective path to local resiliency: local control, local jobs, long-term electrical rate stability, local investment of electricity revenues, and clean renewable energy.
What is Community Choice Aggregation (CCA)?
Community Choice Aggregation enables San Luis Obispo cities and/or the County to pool the electricity demand of participating communities’ homes and businesses to buy power on their behalf. It provides the same type of benefit as buying in bulk at Costco or being a member of a local farmer’s co-op like Farm Supply Company.
How does CCA work?
The CCA operates as a business with a publicaly accountable board of directors. Based on the values of participating communities, the CCA can choose what type of electricity to purchase and where the electricity originates (or is produced) geographically. This means that the CCA program can buy renewable, low-emission energy and support the local economy by purchasing energy produced locally. It can also offer locally tailored programs and attractive financial tools that support increased local ownership of rooftop solar and other renewable technologies.
Is CCA a market-based approach?
Yes, CCA is a market-based approach enabled through Public-Private Partnerships. Unlike other services such as phone, cable, and internet, owners of homes and businesses do not currently have a choice of electricity supplier. As a regulated monopoly, PG&E does not have any competitors forcing them to provide lower rates, cleaner energy, or innovative services. What makes CCA so powerful is that it supports several levels of market competition: first by providing a choice to consumers and second by sourcing its power through a competitive process whereby private energy companies and project developers compete to provide clean power at the lowest price.
Are CCA programs successful?
Community Choice Aggregation is currently available in six states including California, Illinois, Massachusetts, Ohio, New Jersey, and Rhode Island. CCA is a flexible tool that is successful in both small rural counties and in large urban cities such as Chicago and Cincinnati. In California, Marin Clean Energy is the first CCA program in the state. It started with 14,000 customers three years ago and now has over 100,000 customers. Marin’s program is so flexible and successful that the City of Richmond, which is across the bay from Marin, recently joined the Marin Clean Energy program. Sonoma County and San Francisco are launching their programs this year.
What other California Counties/Communities are exploring CCA?
Communities throughout California are exploring CCA, including Monterey County, East Bay, San Diego, Santa Cruz County, San Benito County, Yolo County, and Palmdale.
How will customers be impacted if a CCA is created in SLO County?
Day-to-day, most customers will not notice any change. The only difference would be that the electricity delivered to the home or business would be from cleaner sources of power and/or from local sources of power. Over time, customers will notice that their rates remain more stable, they have access to more attractive renewable energy and energy efficiency programs helping to make their home or business more comfortable and cost effective, and they will notice more construction projects going on in their community building clean energy projects like solar on schools, vineyards and municipal buildings.
How would a SLO County CCA be funded?
Like any worthwhile investment, CCA formation requires both an initial investment and an attractive return. Start-up costs are estimated at less than $1 million. This small investment establishes a $115 million per year business focused on clean energy and investment of electricity revenues here at home. After operation begins, the CCA is self-funded through revenues and the start-up investment is paid back.
Will my taxes go up?
A CCA does not have the ability to tax and would have no negative impact on taxes. A CCA is completely revenue funded, requiring zero tax dollars from customers or participating communities.
What about PG&E? Where do they fit in?
PG&E is an important partner in a SLO County CCA program. Under a CCA, PG&E continues to deliver reliable power, maintain the power lines, and respond to service outages. Customers will still notice PG&E’s distinct blue service trucks working in their neighborhood and community. SLO Clean Energy is committed to supporting a successful partnership with PG&E. Regarding PG&E is an investor-owned utility, operating as a regulated monopoly by the State of California. Under their agreement with the State, PG&E is guaranteed an annual shareholder return to reliably deliver power and to build and maintain power lines.
Would County or City General Funds be at risk?
There would be zero risk to local government general funds. A CCA’s budget is completely separate from the general funds of participating local governments, protecting both local governments and the CCA. Additionally, pressure on general funds would be alleviated due to an increase in financial and human resources focused on energy and climate goals throughout the region.
How would a CCA’s rates compare to current rates?
Studied observation of both forming and operating CCAs in California indicates that rates would be competitive with PG&E. Community Choice Aggregation programs in other parts of the country have frequently offered lower rates than their investor-owned utility competitors.
How would a SLO County CCA be structured?
A CCA operates as a business with a publically accountable board of directors made up of elected officials from participating communities. A CCA uses a very common legal structure for public entities called a Joint Powers Authority (JPA). The JPA creates a legal container that separates participating local governments and the CCA from any transfer of financial risk. Since a CCA operates as a business, it would strategically maintain a lean staff. Marin has a $100 million per year business with an approximate staff of fifteen.
Isn’t renewable power more expensive than regular electricity? Wouldn’t a CCA’s rates be higher?
The dominant trend over the past thirty years for the classic fossil-fueled source of electricity is always up. The dominant trend over that same time period for renewable energy is down and this trend continues to accelerate. Once the initial investment is made, the fuel for most renewable technologies, like wind and solar, is free. At many places in the United States, including California, renewable energy is competitive or cheaper than fossil fuels.
What about natural gas? Isn’t it cheap right now?
Yes, compared to historical levels, natural gas is inexpensive right now. Future natural gas prices are uncertain. However, many experts expect prices to rise in the near future when considering increasing US exports to meet growing demand in developing markets such as China and India. In the short term, low cost natural gas and renewable energy can benefit a CCA with lower rates and lower emissions.
Would customers have to participate in a CCA if they are in the service area?
No. Prior to the beginning of a CCA’s operation, all power customers will receive at least four “opt-out” notices during a sixty-day period at which time anyone can opt-out of the program. In addition, there is a sixty-day period after the start of the program during which any customers can opt out at no cost. After that, customers could still opt-out for a nominal fee. After opting-out, the customer would be prohibited from returning to the CCA for one year.