Local Government Commission has obtained funding from the
California Energy Commission and the US Department of Energy to assist a
limited number of cities in studying the feasibility of community choice
aggregation. Richmond is one of four Bay Area communities that have been
chosen for assistance. Others include Berkeley, Pleasanton, and Vallejo.
Following is a description of the program.
Community Choice Aggregation Pilot Project Proposal to the
California Energy Commission
The Local Government Commission (LGC) seeks to assist cities, counties
and Joint Powers Authorities in implementing Community Choice
Aggregation (AB 117) in their communities. The LGC is a 24-year old
nonprofit organization serving over 800 city and county members in
California. The League of California Cities (League) and California
State Association of Counties (CSAC) are co-sponsoring this effort. The
League and CSAC memberships include each city and county in California.
The three entities have partnered on numerous projects in the past.
LGC's subcontractor for this project, Navigant Consulting, Inc. (NCI),
is an energy and water, technical, financial and regulatory consulting
company, with 1,300 employees across the nation, with a background in
serving local, state and the federal government; the energy industry
including municipal and investor owned utilities; and energy utility
customers among others.
With participation from the California Energy Commission, the US
Department of Energy and other potential funding sources, the project
team will provide comprehensive technical analysis to selected entities
for Feasibility Studies, Implementation Plans and a Regulatory
Engagement strategy that will allow decision points for those
communities as they seek to become Aggregators in their area.
team will implement an Outreach Plan to fully inform and educate as many
elected officials and public sector professional staff throughout
California about how to proceed with Community Choice Aggregation and to
achieve the greatest possible inclusion of renewable energy in local
With the passage of community choice aggregation legislation (AB
117, 2002, Migden), new and innovative options will soon become
available to cities and counties whose constituents are currently taking
electric service from the investor owned distribution utilities, Pacific
Gas & Electric, Southern California Edison and San Diego Gas & Electric.
There are significant advantages, and inherent challenges, in
aggregating community electric load. As the state recovers from the
energy crisis and moves forward in the regulatory and legislative arena
to restore consumer choice in electricity markets, it is imperative that
cities and counties be fully aware of their options to develop the most
beneficial strategies for their residents and businesses.
Community Choice Aggregation (CCA), as defined by AB 117, permits any
city, county or group of cities and counties to aggregate the electric
loads of residents, businesses and municipal facilities to facilitate
the purchase and sale of electrical energy. Prior to AB 117, individual
customer participation in electric load aggregation programs required
their positive written declaration indicating their choice to
participate (opt-in programs). In contrast, CCA under AB 117 provides
for aggregating customer loads within city or county boundaries, with
each customer given an opportunity to opt out of their community's
aggregation program and thereby continue to be served by the incumbent
distribution utility (opt-out program). This is a major departure from
previous aggregation structures as it frees the aggregator from the need
to market the program and ensures wide-scale customer participation.
Distribution utilities are directed to cooperate fully with any
community choice aggregator in its efforts to develop their aggregation
program including providing all necessary data as well as to continue to
provide all metering, billing, collection, and customer service to
retail customers that participate in CCA programs. Community Aggregation
programs cannot begin until the California Public Utilities Commission
(CPUC) has determined rules and protocols for implementing aggregation
programs, including departing load fees.
Local governments may choose Community Choice Aggregation to further
local priorities that may include securing less expensive electricity
for its constituents, purchasing a greater share of renewable energy
than in the state energy mix, or developing local energy efficiency
programs with a share of the public goods charge funds collected in
increasing number of local governments are expressing interest in
Community Choice Aggregation, many have limited staffing capabilities in
terms of experience, time and funding to take advantage of CCA. The
project team can assist local governments in evaluating their community
choice aggregation alternatives by clarifying legislated program
parameters, open issues and time-lines for community involvement.
Further, the project team will share the experience of lessons learned
in a set of pilot communities with other local governments in
Community Choice Aggregation Pilot Project Overview
The overall methodology for evaluating the potential benefits for
local governments to implement a Community Choice Aggregation program
(CCA) is both straightforward and comprehensive. Decision points or
"off-ramps" are designed to limit project financial exposure consistent
with demonstrated community benefits.
The methodology can be summarized as consisting of the following steps:
1. Participate on behalf of local governments in the upcoming CPUC
decision-making process to implement AB117, Community Choice
2. Select three communities, or groups of communities, to receive CCA
feasibility study assistance.
3. Meet with chosen communities to understand their particular interest
in CCA and to start the data gathering process.
4. Assemble known and predictable cost-benefit variables and incorporate
these into a pre-screening model.
5. Adopt assumptions for resolution of key variables pending review by
the California Public Utilities Commission (CPUC).
6. Assess the overall cost-benefit potential to support a threshold
decision to move forward with CCA.
7. Engage the regulatory process by filing a CCA Implementation Plan
with the CPUC.
8. Participate in proceedings to resolve outstanding issues while
iteratively modeling the impacts of proposed decisions and intervening
9. Develop final evaluation prior to implementing.
10. Produce a guidebook for local government staff and a fact sheet for
local elected officials with the lessons learned from this project.
11. Convene six workshops around the state to provide more information
to interested communities.