CCA Reaching Critical Mass

GTM Research - The "Total Addressable (PV) Market for
 California Community Choice Aggregators" - Oct 2, 2017

Even though Community Choice Aggregations (CCAs) still serve a small minority of communities in the United States, the scale of going green regionally is already registering in national green power industry statistics.  It's about to get a lot bigger.

CCA is already 4% of the national PV project pipeline based on a “green CCA” market that is just getting started and about to expand rapidly in both California and New York. Given the fact that CCA is just now hitting a major growth curve in some of America's largest energy using states, and most new adopters are motivated by a focus on energy localization, this percentage is certain to grow significantly in 2018. 

CCA is finally getting the attention of national industry and media as a major and revolutionary new force in American energy. In October, GreenTech Media announced that CCA has taken over the solar market in California, and the impact is being felt across the country.  “Community Choice Aggregators (CCAs) are positioned to represent up to 45 percent of California’s utility PV demand over the next five years. The total addressable market for CCAs is set to reach 3.9 gigawatts by 2022, but it is also expected to grow beyond that projection, as eight more (county-scale) CCAs are slated to launch in the immediate future."

 Green CCA is not new, and was in fact the original concept, but has taken years to make into the rule rather than the exception among CCA implementors. While the initial growth curve of CCA in Ohio and Illinois was focused on discounts and/or higher renewable energy content using Renewable Energy Certificates (RECs), more recent, and even much dramatic growth curve has been largely motivated by the benefits that can only be achieved by localization: local jobs, climate action, and local economic development. 

In California, truly a revolution in power is already underway, with 85% of all customers of investor-owned utilities expected to be served by CCAs in the next few years. Virtually all of these CCAs are focused on development of local renewables, energy efficiency and meaningful greenhouse gas reductions in addition to greener power: 150,000 GHh switching to CCA could leverage an unprecedented wave of DER development, and cause an historical greenhouse gas reduction.   

New York is the exciting new CCA 2.0 kid on the block. After the State of New York approved CCA as a platform for Distributed Energy Resource (DER) development in 2014, the New York State Energy Research & Development Authority (NYSERDA) has taken the lead role in helping municipalities pursue a DER-centric "CCA 2.0" strategy, creating a "CCA Toolkit" with Local Power's assistance, and forming a special workgroup to advise the state on how to augment energy localization and remove any outstanding barriers in state law and regulation. I am proud to have participated in these processes.

The trend towards green power has even spread back to early CCA states whose early adopters were initially focused on achieving discounted rates for customers, inspired by widespread successes of CCAs to achieve greener power at discounted rates, and also new local benefits associated with local renewables.

In Massachusetts, about 130 municipalities out of the Commonwealth's 351 total are already under CCA service, with the City of Boston recently joining the pack, focused on achieving greenhouse gas reductions. 

More than 250 communities in Ohio are under CCA service, including the nation’s first “green CCA” in Northeast Ohio. Today, NOPEC has 850K customers in 218 communities in 14 counties statewide, all being served 50% renewable power at a discount below utility rates - something that was unthinkable even in California only half a decade ago, but becoming widespread under CCAs, which have been proven able to deliver greener power much cheaper than utilities and deregulated suppliers. This kind of scale creates substantial environmental benefits. In Southeast Ohio, SOPEC has been focused not merely on greener power but on energy localization for the past couple of years, providing the state with a ramming rod for CCA 2.0.

About 600 communities in Illinois are under CCA service. Between 2011 and 2014, 91 Illinois municipalities representing 1.7 million consumers switched their communities to 100% Renewable Energy using CCA. 91 medium sized cities and towns containing 1.7M customers have chosen 100% renewable energy (using RECs), which is a six TWh annual renewable demand boost - the carbon reduction equal to eliminating one million cars! While Illinois' CCA law needs changing to eliminate barriers to CCA investment in local renewables and efficiency, these accomplishments demonstrate both the power of CCA and the political will for significant action in green power.

With the numbers starting to show, national policy groups are beginning to recognize the true potential that CCA has to create significant local benefits like customer equity, community wealth retention, local jobs and economic development, and local pollution reduction, as well as global benefits like greenhouse gas reductions.  NAACP's just featured CCA in its Environmental and Climate Justice Program's Just Energy Policies and Practices Action Toolkit. 

 Watch for some major new leaps in 2018, with emerging CCAs shifting their focus further towards the local, and even behind the meter. As CCAs continue to prove new services like EVs and solar plus storage, solar bonds/green bonds continue to go mainstream, and increasing levels of DER integration prove themselves in the form of community microgrids, and community solar, EV sharing and dynamic charging, CCAs will revolutionize demand-side technologies and customer-ownership the way the have already transformed retail energy. Mark my words: what was a luxury will soon prove cheaper than status quo power, and what was a fantasy utopia will soon become reality.

With San Francisco, a Whole New Environment in California Energy

The past two years have yielded a huge expansion of Community Choice Aggregation (CCA) from just a handful of CCAs in a couple of states into a national phenomenon including major cities like Cincinnati, Chicagoland, and  800 U.S. municipalities now under CCA service. The movement Local Power started has received a profound shot in the arm by recent approval to launch San Francisco's green power program, CleanPowerSF, in which Local Power has been deeply involved for over a decade and prepared many of the elements of the program. This is a long-awaited launch of a program that will have a profound impact on not just the growing California CCA movement but at the national energy policy level. San Francisco will provide intellectual leadership for a growing number of cities that see the logic not just of aggregation, but solar & efficiency finance, and green jobs.

San Francisco's ordinance to launch CleanPowerSF power service in Spring of 2013 also provides for the issuance of Requests for Proposals or RFPs - solicitations to developers of solar, wind, other renewable energy, energy efficiency, and other green technologies for rollout in San Francisco in the near-term (small footprint, easy to permit), medium-term larger projects, and long-term major projects requiring exhaustive state environmental permits. The In City RE/EE rollout will install a portfolio each year based on a financial model, deployment report and solicitation documents Local Power is now preparing for the San Francisco Public Utilities Commission, which operates CleanPowerSF.

An already vibrant movement for greener, more local power in states constituting 25% of the U.S. electricity market is now underway not only in Marin County, but also San Francisco, with dozens of local governments not far behind. Focused on scaled energy localization to make their community not just renewable but locally powered and customer-owned, CleanPowerSF starts with a small amount of power from a global conventional power provider. Our task is to advise the City on how the SFPUC may operate and control wholesale power procurement planned with decentralized demand reduction, in order to achieve a smooth citywide transition to local green power.

CleanPowerSF starts with a 100% renewable power service for a small initial group of early adopters (all residential 30 MW - less than 10% of the aggregated private sector), which will be followed by construction of a new, local, renewable infrastructure to power the CCA, while phasing in commercial customers and remaining residential customers citywide over the next couple of years.

Part of this focus is carbon. The San Francisco Public Utilities Commission's General Manager Ed Harrington spoke eloquently when he remarked to Supervisors that just Phase I of the CCA program (less than 10% of customers enrolled) will provide ten times the greenhouse gas reductions of all City policies of the past ten years combined, at a tiny fraction of the cost. But another rising criterion for municipalities is how to deliver green jobs today - the opportunity to get local jobs because the power generation is being brought to smaller local renewable developments. Localization creates local jobs because smaller companies can win this work, and local labor can be trained and prepared to work for these companies building here in the community.

Many other California communities are seeing green when they consider energy localization - not just global carbon reductions like CleanPowerSF or Marin Clean Energy on the other side of the Golden Gate. It is the green of monthly utility bill dollars not leaving the city or county. PG&E has claimed it is a "local company" compared to Shell North America. But it cannot compare itself to the city of San Francisco, which controls this program and intends to localize its energy supply using its solar "H" bond authority, both to build city-owned plants and to offer financing so San Francisco residents and businesses. This is localism in the true sense - not greenness defined by the logo or corporate identity of a wholesale power supplier like Green Mountain Energy, but greenness defined by  municipal financing, localization, and reducing our dependence on these companies through fundamental change.

Revolution in Illinois

Yesterday, voters in the vast majority of 300 Illinois cities approved Community Choice Aggregation (CCA) programs, adding over a million customers to be served by CCAs nationwide.

In the Chicago area, 80 percent of cities approved the CCA measures, resulting in over a million new customers receiving power service since LPI developed CCA. Several million Americans have received CCA service since the late 1990's when Massachusetts adopted the first CCA law and Cape Cod towns formed the Cape Light Compact. With many major California cities and counties now forming CCAs, and many new CCAs like Cincinnati and Hampshire County Massachusetts forming CCAs on the East Coast, Local Power Inc. may finally announce the existence of a major national movement that already serves a substantial portion of America's electricity demand.