Federal expansion of community choice aggregation
Community choice aggregation allows a local government to bundle all of the energy users in an area and provide their energy needs through a publicly owned local institution, leaving the incumbent investor-owned utility to solely operate the poles and wires. Community choice aggregation has significantly accelerated the deployment of renewable energy in states that allow it and serves as an alternative to private monopoly utilities that trap communities in fossil fuel energy as well as individual customer choice programs that may not shift the system fast enough or do so with equity. However, community choice programs are only available in eight states, with varying levels of constraint. Through a Green New Deal, the federal government could expand community choice aggregation to every state, allowing any local government to create their own community choice program, while also providing technical capacity so these new programs can build a local, equitable green economy.
The problem
For-profit, investor-owned utilities (IOUs) as of 2017 served nearly three of every four utility customers.[1] These large and sometimes multinational corporations have worked to stop meaningful action on climate change or environmental protection in a moment when we have a few precious years to get on track and stay below a 1.5-degrees Celsius rise in average global temperature. In places where IOUs have made commitments to the energy transition, studies find that progress is slowing.[2] The way these companies make money is by investments in capital infrastructure, where they’re often guaranteed a rate of return. This profit system means that investor-owned utilities focus on big projects like power plant construction, pipelines, or large transmission lines that have largely been in conflict with renewable energy and energy democracy.
Energy democracy seeks to build an energy system based on resilient renewable energy in which ownership and wealth are shared equitably, but for utility companies there is little incentive to want to share ownership of renewables (particularly distributed renewables), which would reduce their profit margins, or even invest in renewables at all. What’s more, the wealth amassed by these corporations rewards them with immense power, allowing them to shape politics and regulation to push their agenda through.
Community choice aggregation has already helped numerous cities across the United States mobilize towards their goals of 100% renewable or localized energy.
Renewable advocates have sought to open up a competitive market for generation, or “customer choice,” in order to get monopoly investor-owned utilities out of the way and open up space for renewable energy. This has had mixed results in actually getting renewable energy onto the grid. In particular, in places where there is a so-called “deregulated” or open market for generation, each individual has to make their own decision to switch from the incumbent utility, a particular challenge for those with less time or resources to evaluate new options. In many areas with consumer choice, predatory energy providers have emerged that offer deals to sign up low-income customers into higher energy costs, often without delivering cleaner or more local energy. These types of predatory energy marketers erode trust in a competitive market, particularly among low-income communities and communities of color that are hit the hardest by rising energy costs. This system has the potential to be discriminatory, with more privileged energy users able to do the research and switch to cheaper providers, leaving lower-income ratepayers with a bigger bill to pay for the utility’s historical bad investments.
Answer: Empower communities
Community choice programs allow local governments or even regions to aggregate all the users in their area and take over as the supplier for their region’s energy generation, while the investor-owned utility continues to operate the poles and wires. Community choice aggregation is both an alternative to private monopoly utilities that trap communities in fossil fuel energy and customer choice plans that may not shift the system quickly or equitably, by collectively investing as a whole city or region in a renewable energy future. This tool has already helped numerous cities across the United States mobilize towards their goals of 100% renewable energy or localized energy in such places as San Diego, California, and Cambridge, Massachusetts.[3]
