What is Community Choice Energy and Why Should You Care?

Power to the people.

Community choice energy programs in California and other states are helping our country shift away from fossil fuels to clean renewable energy.

Are you thinking something like “That sounds great but what the heck is community choice energy?” If you are, you have plenty of company so do not worry about it.

I only learned about community choice energy because I chanced upon the SLO Climate Coalition when I was looking for a group promoting clean renewable energy where I live in San Luis Obispo County, CA. When I met them in October 2018, they and their predecessor group SLO Clean Energy had been working for years to bring community choice energy to the cities and unincorporated areas in our county.

Because of their efforts and the efforts of many other people this initiative is succeeding. On January 9, 2020, San Luis Obispo and Morro Bay became the first cities in San Luis Obispo County to begin receiving electricity through a community choice energy program provided by Monterey Bay Community Power. Other cities will be joining next year and hopefully, the County will get on board, too.

Community Choice Energy Flip the Switch Event in San Luis Obispo City Hall
San Luis Obispo City Council (Mayor Heidi Harmon in red), City staff, and members of the SLO Climate Coalition at the “flip the switch” event at San Luis Obispo City Hall on January 9, 2020 – photo credit San Luis Obispo Chamber of Commerce. Click here to read the article.

Through my work with the SLO Climate Coalition, I have had the opportunity to learn about community choice energy and became interested in researching the topic on my own.

This post is intended to serve as an introduction to community choice energy and will hopefully spark your interest in advocating for a program where you live and/or opting to stay in it if your community already has one.

First, let’s talk about electricity generation and greenhouse gas emissions.

Electricity Generation and Greenhouse Gas Emissions

Global warming is being caused by excess greenhouse gases like carbon dioxide (CO2) and methane (CH4) building up in Earth’s atmosphere overwhelming the planet’s ability to deal with it. Most scientists agree that humans need to stop burning fossil fuels such as coal, petroleum, and natural gas or the climate crisis will continue to worsen endangering our very existence.

This short video was prepared by the World Meteorological Organization in advance of the United Nations COP25 climate conference held in Madrid, Spain during December 2019.

How do greenhouse gas emissions from electricity generation fit in the overall picture?

The process of generating electricity is the largest stationary source of CO2 emissions in the United States. In 2018, this represented 33% of all CO2 emissions sources across the country. 1

U.S. Electric Power Generation and Emissions 1990-2018 Graph
Fuels Used in Electric Power Generation (TBtu) and Total Electric Power Sector CO2 Emissions – source U.S. Environmental Protection Agency.

In a 2019 report, the U.S. National Renewable Energy Laboratory concluded that community choice energy providers could reshape U.S. electricity markets and increase customer demand for renewable energy. 2

Community Choice Energy 101

The U.S. federal government has some involvement in regulating electricity markets but states are largely responsible for what happens within their own borders.

States have the authority to pass legislation authorizing community choice energy programs. As of this writing, nine states have passed such legislation including California, Illinois, Massachusetts, New Hampshire, New Jersey, New York, Ohio, Rhode Island, and Virginia.

Community choice energy legislation allows communities to choose who they purchase electricity from instead of being required to buy it from investor-owned utilities (IOUs) that are beholden to their shareholders.

How does it Work?

A city, county, or some combination of cities and counties may form an organization called a community choice aggregator (CCA). A CCA is a local or regional not-for-profit public agency that assumes the responsibility for procuring electricity on behalf of all customers in its jurisdiction.

The reason they are called aggregators is that they pool (aggregate) the electricity demand for their customer base and then procure electricity to meet that demand from one or more sources of their choosing. The electrons purchased are fed into the electric grid so as a customer you are not necessarily receiving your electricity from the source selected by your CCA.

At this time, CCAs only purchase electricity. They form partnerships with IOUs who continue to provide transmission, distribution, meter reading, billing, maintenance, and outage response services.

Where I live, the City of San Luis Obispo and the City of Morro Bay opted to join Monterey Bay Community Power an existing CCA that was already serving several counties on the California Central Coast.

Our house is in the unincorporated part of San Luis Obispo County so PG&E is still our electricity provider. However, we have a rooftop solar panel system on our home so we generate most of our own power. During the day we send our excess electricity to the grid and at night we draw electricity from it.

Benefits

For me, it is a tossup as to which is the best benefit of community choice energy.

Local control of electricity procurement decisions enables CCAs to offer their customers choices. Most CCAs procure a mix of electricity from both renewable and nonrenewable sources and allow their customers to choose a mix that meets their budget and desire to support renewable energy (or not).

Unlike IOUs, CCAs do not have investors looking to profit from their investments. This enables CCA’s to offer competitive rates that are often lower than the IOUs. In addition, revenue surpluses are used to fund community programs versus lining the pockets of shareholders. These programs can range from funding rooftop solar panels for low-income families, to adding electric vehicle charging stations around town, to awarding grants to local nonprofits.

Many CCAs are focused on procuring electricity from carbon-free renewable sources like hydroelectric, wind and solar which spurs investment in these technologies and helps transition the U.S. off fossil fuel-powered electricity.

CCAs are already embracing the Green New Deal creating jobs and investing locally and working on helping their communities become more just and resilient.

Drawbacks

Avid community choice energy advocates sometimes gloss over potential drawbacks but I think it is important to cover them, too.

Adding more buying entities to an already complex system does not necessarily promote cooperation and could take attention away from the critical work that needs to be done modernizing, securing, and making our electric grid more resilient.

IOUs have a lot of money and expertise available to keep on top of electricity-related legislation and to lobby government agency representatives and elected officials. CCAs may or may not have the funds and staff necessary to keep up and to effectively influence legislation. Recently, there has been a rash of mostly worrisome community choice energy-related legislation making its way through the California legislature.

Most CCAs are new and do not have a long-term financial standing with creditors possibly making them more vulnerable to changing electricity market conditions or unexpected problems.

For instance, of the seven states with active CCAs, California is the only state with a regulated electricity market. California CCAs are required to pay “exit” fees to compensate IOUs for their sunken investment costs and long-term contracts. The determination of these fees called the power charge indifference adjustment (PCIA) is a contentious and recurring process with little transparency. If these fees continue to escalate as they have been, it could endanger the financial viability of existing CCAs and preclude others from even forming.

Summary

Community choice energy is beginning to disrupt the electricity industry. I believe this a good thing.

U.S. Map Showing Community Choice Energy States

We need a massive and systematic change in the way we power our lives and businesses in the United States. Perhaps community choice energy can provide a lever to break the status quo and accelerate our transition to clean renewable energy.

Disruption can be frightening, too. I worry that while communities focus on local choice and control that the big picture may not receive the attention it needs and that further fragmentation of the electricity market may have unintended consequences.

However, as far as I am concerned, the need to change far outweighs the problems and roadblocks we are sure to encounter along the way.

By learning about and advocating for community choice energy where we live, you and I can be part of a clean renewable energy future for everyone.

Featured Image at Top

Four people are holding icons representing a solar panel, sun, wind turbine, light bulb, water drop, and battery – photo credit iStock/Rawpixel.

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References

  1. DRAFT Inventory of U.S. Greenhouse Gas Emissions and Sinks: 1990-2018, Chapter 3: Energy – U.S. Environmental Protection Agency, 02/12/20
  2. Community Choice Aggregation: Challenges, Opportunities, and Impacts on Renewable Energy Markets – by Eric O’Shaughnessy, Jenny Heeter, Julien Gattaciecca, Jenny Sauer, Kelly Trumbull, and Emily Chen – U.S. National Renewable Energy Laboratory, 02/2020

Resources

On Fire – Book Review

We can thrive not just survive.

If you or someone you love is planning to live on Earth anytime in the future, you should read Naomi Klein’s On Fire: The (Burning) Case for a Green New Deal.

Without ever having read a review about it or at least glancing at the front flap of the book jacket, have you ever grabbed a book off of a bookstore shelf and then walked immediately to the checkout counter and bought it? I will only do this for a very few authors which include Naomi Klein, Bill McKibben, and Yvon Chouinard.

That is how I obtained my copy of On Fire.

In just under 300 pages, you will receive a valuable history lesson about the climate crisis and a vision for what we can and need to do to keep Earth habitable for ourselves and those who come after us.

Book Review

Since I had read nothing about On Fire, I did not know what to expect other than it had to do with the climate crisis and the Green New Deal. Having read previous books by Klein I was prepared for a fast-paced, informative, and action provoking book. It is.

On Fire Book Cover

Readers before cracking open On Fire, I suggest you approach reading it with an open and inquisitive mindset. You may find some parts disturbing but you will likely feel uplifted by others.

On Fire consists of essays and public talks that Klein has written and presented over a ten year period from 2010 to 2019.

She covers a lot of ground from the Gulf of Mexico to the Vatican to the Great Barrier Reef. Wide-ranging topics include climate change, capitalism, science, culture, and the Green New Deal. Along the way, you will be exposed to terms like Anglosphere, othering, sacrifice zones, neoliberal economics, and geoengineering.

My copy of On Fire is sporting a bright pink and red ruffle along the page edges where sticky tabs are marking passages that I thought were important or worth reviewing again later. Here are a few examples.

For me, the paragraph below from the “Introduction” pretty much sums up our current situation.

“The past forty years of economic history have been a story of systematically weakening the power of the public sphere, unmaking regulatory bodies, lowering taxes for the wealthy, and selling off essential services to the private sector. All the while, union power has been dramatically eroded and the public has been trained in helplessness: no matter how big the problem, we have been told, it’s best to leave it to the market or billionaire philanthro-capitalists, to get out of the way, to stop trying to fix problems at their root.”

In the chapter entitled “The Leap Years,” Klein describes the Leap Manifesto, a sort of Canadian version of the Green New Deal that she helped write. Page 178 contains a very important message that every environmentalist should heed.

“One thing we were very conscious of when we drafted the Leap Manifesto is that emergencies are vulnerable to abuses of power, and progressives are not immune to this by any means. There is a long and painful history of environmentalists, whether implicitly or explicitly, sending the message that ‘Our cause is so big, and so urgent, and since it encompasses everyone and everything, it should take precedence over everything and everyone else.’ Between the lines: ‘First we’ll save the planet and then we will worry about poverty, police violence, gender discrimination, and racism.’

“The Art of the Green New Deal” chapter near the end of the book discusses the power of art and how it can help us envision the social and ecological transformation we can have if we have the courage to go for it.

The video below co-created by Klein beautifully embodies this idea.

The Bottom Line

When Naomi Klein published her first book about the climate crisis This Changes Everything: Capitalism vs. The Climate in 2014, she was already an award-winning journalist and bestselling author. She is currently the Senior Correspondent for The Intercept and the Gloria Steinem Endowed Chair in Media, Culture, and Feminist Studies at Rutgers University. Klein is the co-founder of the climate justice organization The Leap.

Many wonderful writers do not have the grasp of language that Klein does. Her writing is clear, understandable, and evocative. She tells it like it is and seems to purposefully say things in a way intended to rile you up, like poking a stick in a hornet’s nest. This is one of the things that make her such a powerful writer. We need people who are willing to say what is really going on and to spur us to action. Klein does that.

I recommend you read On Fire first and then give or loan a copy of the book to someone you know that has not come to grips with the fact that the climate crisis is already here and that we can do something about it.

Featured Image at Top: Sunrise Movement youth activists demanding a Green New Deal during a sit-in outside the office of U.S. Speaker of the House Nancy Pelosi on November 12, 2018 – Photo courtesy of Sunrise Movement.

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