Community Choice Aggregation: A Legislative Path to Energy Freedom
Community Choice Aggregation is an energy freedom program that permits a community to directly access the competitive market to procure power from the energy supplier they choose. This is in contrast to much of Colorado's current situation in which a monopoly utility (in Boulder this is Xcel) is granted exclusive rights as a region's energy supplier by the state. The benefits of a free energy market are many; competitive markets can lead to lower rates, the ability to choose sustainably generated power, and the ability to invest in local solutions which create jobs and keeps money in the local economy. CEA endorses policies for energy freedom, and fortunately, local legislators and non-profits like Energy Freedom Colorado are working to make a path to energy freedom for Colorado.
To give you a better understanding of how it works, let’s begin with the power grid. The three main components of a power grid are energy generation, transmission (of electricity over long distances from power plants to local substations), and distribution (of electricity from a substation to the consumer). Community choice aggregation (CCA) is a cooperation between municipal utilities and investor-owned utilities (IOU) in which the municipal CCA purchases power independently, but the transmission, distribution, and customer interface are maintained by the local IOU as shown below. CCAs served about 3.3 million people in 2016 and are growing rapidly in the eight states where they have been legalized, allowing municipalities in these states to choose their power sources in a way that reflects the values of their community, which include factors like cost, environmental impact, and supporting local energy businesses.
To implement CCA in Colorado, our legislature would need to enact CCA legislation, and the Public Utility Commission (PUC) would need to adopt corresponding rules and regulations. Several structural aspects of Colorado’s electricity grid could make this process more complicated than it has been for other states. For example, most states with CCA had already restructured their IOU to make separate companies for power generation and delivery, which simplifies the process of transitioning to municipally controlled power generation. Further, Colorado is not part of a Regional Transmission Organization (RTO), which is an independent, non-profit operator of a large, integrated transmission grid. Instead, each region’s transmission lines are controlled by the local utility, which complicates the task of transporting power from the generation site across a number of independently owned transmission systems to the municipality. Despite the challenges, we can overcome these obstacles and make the change. If you would like to learn more or help move Colorado forward, here are some links for you:
For general background information:
NREL: https://www.nrel.gov/state-local-tribal/blog/posts/community-choice-aggregation-cca-helping-communities-reach-renewable-energy-goals.html
LEAN: http://leanenergyus.org/cca-by-state/
EPA: https://www.epa.gov/greenpower/community-choice-aggregation
For Colorado specific information and/or to get involved in Colorado's policy efforts:
EFC: http://energyfreedomco.org/