Several years ago, I wrote about community choice energy (CCE) in this column, and as the city of Carpinteria nears a decision regarding who has the buying power of our energy, I thought a reintroduction to the topic would be helpful.
Historically, electricity in California has been handled primarily by investor-owned utilities like Southern California Edison and Pacific Gas & Electric. The utility companies both produce their own energy and buy energy from other producers to deliver electricity to your home or business, and must meet state mandates that include things like incentive programs, a mix of energy sources and rate setting.
The energy landscape in California began to change in 2002 with legislation that allowed cities and counties to aggregate their own energy sources for residents and businesses. Increased reliability, as well as rising energy costs and a reduction in reliance on traditional, less environmentally friendly power sources like coal and nuclear energy, make community choice aggregation attractive for local governments.
CCE programs are structured so that the electrical transmission and distribution—the poles and lines—are still handled by existing utility companies, while the power supply is purchased by the CCE. Local governments can combine (or aggregate) their electricity load in order to purchase and/or develop power for their jurisdictions. In most cases, more renewable or carbon-free energy sources are available at either the same or reduced cost.
A CCE operates as a non-profit public agency. Based on a community’s interests, a CCE can choose not only what type of power generation, but also where (geographically) it comes from. This allows agencies to purchase more renewable energy from local sources, which can have a positive impact on the local economy.
CCEs are market-driven, public-private partnerships. Market competition makes CCEs an attractive energy option for several reasons: first, by providing consumers with options; and second, by sourcing power through a competitive process whereby private energy companies and project developers compete to provide clean power at the lowest price. In most cases, CCEs are delivering more reliable energy at lower costs.
While customers are automatically enrolled into a CCE program, it’s important to keep in mind that they have a choice—they can opt out at any time to stay with their investor-owned utility. Most customers won’t see major changes. The utility bill is still delivered through the existing investor-owned utility (in our case, Southern California Edison).
Carpinteria has been exploring the possibility of forming a CCE partnership with other local agencies for several years. Since the beginning of that process, more local governments have formed the joint power authorities required to become a community choice energy provider.
In July several local agencies made the decision to either join an existing CCE program or form their own. Carpinteria will be hearing the options available to our city and taking action at the end of August.
There is a lot more to say about providing energy through a public-private partnership, but with an aging electric grid and goals of more renewable sources at both the state and federal level, exploring ways to deliver cheaper, greener electricity to customers is an important step towards making a positive impact on the future of both the environment and economy.