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Community Choice Aggregation

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by Morris Meyer 

Community Choice Aggregation (CCA) allows municipalities to select the delivered energy mix for their community.   CCA programs allow municipalities to define their power mix, and 50% renewable and 100% renewable have been implemented.  The existing provider is responsible for billing, transmission and distribution, and the regulatory status of the existing provider is unchanged.

CCA legislation has been implemented in California, Massachusetts, Ohio, Illinois, Rhode Island, and New Jersey.  CCA legislation is under study in Utah, Minnesota, and Delaware.  CCA programs are opt-out where ratepayers in the community have a simple mechanism to seek exemption from the CCA.   Some CCAs exempt industrial and large commercial customers from the aggregated community energy mix.  Subscribed rates for CCAs are typically 80-90%.

The Dominion Green Power Plan is an opt-in plan with a subscriber rate of 1%, based on 24,000 subscribers over a ratepayer base of 2.5 million (Dominion 2017b). Price premium of CCA programs (1 – 2 cents per kilowatt-hour) is in line with the Dominion Green Power Plan (1.3 cents per kilowatt-hour) (Dominion 2017a).

Community Bonds compared to IOU debt
Municipalities can lock in low cost power for their community ratepayers by leveraging tax-exempt debt.  Studies show that CCAs can offer debt at 600 basis points below IOU debt (Heeter 2012) for local renewable energy projects.

Regional Greenhouse Gas Initiative
Governor McAuliffe is moving to have Virginia join the Regional Greenhouse Gas Initiative (RGGI) .  CCA enabled tax free municipal debt would help Virginia’s energy providers and CCA communities collaborate to monetize the 3% yearly reduction (Kusnetz 2017) from joining the RGGI.

CCA Implementation

  • Customer survey
  • Implementation plan
  • Educating consumers about options
  • Municipality council vote
  • Municipality local referenda
  • Soliciting local generation offers

Benefits of Community Choice Aggregation
CCAs give municipalities the choice to vote for locally generated power from local renewable energy projects that create jobs near their communities.  The Commonwealth has mountain and off-shore wind and plentiful solar resource, and CCA legislation would help create jobs from southwest Virginia to the northern neck.  The 2017 Lazard Levelized Cost of Energy (LCOE) assessment shows the cost of wind cheaper than combined cycle gas, and the cost of utility scale solar cheaper than coal.  Combined with tax-free municipal debt, CCAs provide a mechanism to lock into fixed low-cost generation to insulate ratepayers from fuel cost surcharges.

Works Cited
Heeter, Jenny, and Joyce McLaren. Innovations in Voluntary Renewable Energy Procurement: Methods for Expanding Access and Lowering Cost for Communities, Governments, and Businesses (Technical Report). No. NREL/TP-6A20-54991. National Renewable Energy Laboratory (NREL), Golden, CO., 2012.

Kusnetz, Nicholas.  “Virginia Launches Plan to Join East Coast Carbon Market, Cut Emissions 30%”.  INSIDECLIMATENEWS.com.  Last updated November 16, 2017.  https://insideclimatenews.org/news/15112017/virginia-carbon-market-cap-trade-rggi-greenhouse-gas-coal-emissions-climate-change

“Dominion Energy Green Power for My Home”.  DOMINION.com.  Last accessed November 15, 2017.  https://www.dominionenergy.com/home-and-small-business/ways-to-save/renewable-energy-programs/dominion-energy-green-power/dominion-energy-green-power-for-my-home

“Levelized Cost of Energy 2017”. LAZARD.com.  Last updated November 2, 2017.  https://www.lazard.com/perspective/levelized-cost-of-energy-2017

“Virginia Electric and Power Company’s Report of Its Integrated Resource Plan”.  DOMINIONENERGY.com. Last updated May 1, 2017.  https://www.dom.com/library/domcom/pdfs/corporate/2017-irp.pdf