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Environment

Community Choice Aggregation Programs Flex Their Power

CCAs are confusing, acronym-laden, and embroiled in municipal government minutiae. They also might be the key to unlocking the power of local clean energy.

Since 2016, dozens of local governments have joined CCA programs as a way to meet clean energy goals and save residents money on electricity bills.
Joule
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As a climate catchphrase, “community choice aggregation” is a little dry. It does not roll off the tongue. It doesn’t make for great protest signage. It’s not even clear that it has anything to do with renewable energy. What do we want? Something a little more inspiring. When do we want it? Now.

But if community choice aggregation lives up to its promise, it might just be the wonky little municipal policy engine that propels the Hudson Valley—and New York State—toward a brighter, more resilient energy future.

Community choice aggregation—or CCA, because of course there’s a mind-numbing acronym—became legal in New York State in 2016 as a way to encourage buying renewable energy and to give towns bulk purchasing power on energy markets. In the past few years, the CCA model has been adopted by dozens of municipal governments as a way to meet clean energy goals, while saving residents money on their electricity bills.

The Hudson Valley is currently a hotbed of CCA growth, as a glance at a state map of current programs shows. Ten local governments currently participate in a CCA program run by private for-profit administrator Joule Community Power: the cities of Beacon and Poughkeepsie; the towns of Clinton, Marbletown, New Paltz, Philipstown, Red Hook, and Saugerties; and the villages of Cold Spring and New Paltz. Several other communities in Dutchess, Putnam, and Ulster counties are slated to join Joule’s program soon. Farther downstate, a nonprofit called Sustainable Westchester runs a CCA program that serves 28 municipalities in that county.

Credit: NYS Department of Public Service
Ten municipalities in the mid-Hudson Valley—and 28 more in Westchester—have CCA programs. A couple more, including Kingston (not listed) have passed legislation to start a CCA program.

What makes a CCA powerful is its opt-out structure, which guarantees that it will start out with enough participation to achieve a certain economy of scale. When a town, village, or city joins a CCA, all of its residents are opted into the program by default, though they have the option to switch energy suppliers if they decide to do so. With a large number of participants signed up at launch, a CCA has the power to negotiate for good energy prices from suppliers.

This year, CCAs have also begun to gain approval from state regulators to team up with community solar programs, which could allow new solar projects to get a running start without going through the lengthy process of finding subscribers.

There’s no legal requirement for a CCA to be based on renewable power. At heart, a CCA is just bulk power purchasing: It’s a legal structure that allows a town to negotiate with power producers, both green and brown, to secure better electricity rates on behalf of all its residents. There are only a handful of companies in New York State that do the specialized work of running CCA programs for towns and cities, and not all of them focus on buying 100 percent renewable power. Of the ones that are renewable-focused, much of the power is currently bought from large existing hydropower plants on the statewide market—although that’s changing fast.

But if a town decides to adopt a CCA based on renewable power, that program can be designed to boost the buildout of local renewable energy. It can also become the seed of something larger: A community-wide effort to build a healthier, more locally accountable relationship with electrical power.

Local Control of the Energy Supply

On September 7, the Kingston Common Council voted unanimously to adopt Local Law No. 3, authorizing the creation of a renewable-focused CCA program for the city. Julie Noble, Kingston’s sustainability coordinator, says that the city plans to begin looking for an administrator to run the program soon, and hopes to have a contract in place by early 2022. 

“Assuming we are able to achieve a lower bulk energy rate, we’ll see savings instantly,” Noble says.

But it’s not just about dollars and cents on Kingston’s electric bills. Noble reels off a laundry list of benefits she’s hoping Kingston will gain from a CCA: cleaner air, divestment from fossil fuels, more local jobs in renewable energy and construction. The model could also be a powerful force for moving toward 100 percent renewable energy use citywide, Noble says. “CCA is one of the top mechanisms for making that change on a large scale.”

Perhaps most importantly, having a CCA will give the city more tools for taking charge of its own energy future. “It puts the control in local hands, so we’re not at the whim of Central Hudson.”

Municipalities taking control of their own energy supply is vital to the larger goal, enshrined in the state’s sweeping 2019 climate law, of getting New York State off fossil fuel electricity by 2040, says energy policy expert Jen Metzger, a former New York State senator for the Hudson Valley’s 42nd district and a policy advisor to New Yorkers for Clean Power.

Metzger had a hand in shaping what CCAs now look like in New York. As an advocate for the group Citizens for Local Power, she served on a working group dedicated to CCAs when the New York State Public Service Commission was hammering out the details of how they would be allowed to operate. (Joule director Glenn Weinberg was also in the group.) Metzger and other CCA advocates were inspired by successful programs in California and Massachusetts, but New York’s energy market had its own peculiar structure that required a different approach.

Metzger thought that making the programs opt-out was important to their success—as was tying them to local governments.

“Essential to the transition to a clean energy economy is making communities feel invested in that transition, taking ownership of it, and developing programs that directly serve their communities,” Metzger says. “It’s as much about education and outreach as it is the programs themselves.”

Bumps in the Road

Sustainable Westchester has been in the CCA business since 2016. In the brave new world of New York State renewable energy, that makes program director Dan Welsh something of an elder statesman.

Welsh, who’s also a longtime Lewisboro town board member, had a career running an engineering company’s China outpost before moving back to Westchester County. Now he oversees Sustainable Westchester’s CCA program, Westchester Power, which negotiates for bulk renewable energy on behalf of 28 towns, cities, and villages in the county, serving roughly a third of the county’s residents.

Getting Westchester Power off the ground initially was a lot like herding cats, Welsh says. 

“To get 20 municipalities to sign up to something that’s as far a stretch from their usual scope of business as this takes an awful lot of shoe leather,” Welsh says. He estimates that it took about 250 local government meetings to get the CCA program launched, a process that required every participating municipality to pass a local law. Since then, eight more municipalities have signed on.

The rollout of a new CCA program doesn’t always go smoothly. This summer, when Joule brought the Dutchess County town of Clinton into its local CCA program, Hudson Valley Community Power, the shift was met with confusion and pushback from some residents. A major issue: Joule negotiated its bulk price for participants in 2019, when natural gas prices were higher. When gas prices plummeted in 2020, Central Hudson’s electricity rates also went down—plunging below Hudson Valley Community Power’s pre-negotiated fixed rate, which had been a lot more attractive in 2019. The Times Union reports that some Clinton residents grumbled about the discrepancy and quickly opted out of the program.

Natural gas prices are currently rising again. CCA rates rolling out amid an uptick in variable electricity rates are a lot less likely to induce sticker shock. But wild swings in fossil fuel prices means there’s no assurance that the CCA price will stay right. Welsh concedes that it’s not a guarantee that a CCA’s locked-in rate will always be lower than the variable rate offered by the local utility’s default energy supplier.

“You know what you’re going to be paying, you know you’re not going to have wicked spikes at certain times of the year,” Welsh says. “But you’re also not guaranteed to save, because we don’t know what the utility rates are going to be.…But the utilities are not transparent on how those rates are tied to the market. So they go up and down—and we might do better, we might not.”

Credit: Joule 2020 annual report

For Noble, watching snafus unfold in other local communities over prices and how the programs are explained has been an incentive to make sure Kingston’s CCA roll out goes smoothly.

“CCA was something we did not take lightly, and we did not want to be an early adopter for,” she says. “We waited a little while to see how other municipalities moved through the process.” 

CCA with Solar: The Best of Both Worlds?

For most New Yorkers, the face of local renewable energy is likely to be a community solar project run by a private for-profit developer. The main model for local solar in New York is called community distributed generation (CDG), and since its launch in 2015, the program has given rise to a thriving small-scale energy industry.

For an ordinary electricity consumer, subscribing to a CDG solar project tends to be a good deal, because it guarantees a discount on electricity rates. New York State requires CDGs to give at least a 5 percent discount to subscribers on solar credits; the subscriber’s utility then applies the discount to their electric bill. The industry standard has settled on a more generous 10 percent. Subscribing to a CDG also comes with the intangible satisfaction of helping to get the grid off of fossil fuels—and indeed, the CDG model has helped to get more zero-carbon energy built in New York.

But as a way of supporting the large-scale rollout of renewables, CDG has a lot of inherent limitations. Finding customers is a slow process, because new subscribers have to be signed up one at a time, and the solar company needs to do a lot of time-intensive marketing. The process can be confusing to people, because subscribers typically get two separate monthly bills for electricity: one from the CDG project for discounted solar energy credits, and one from the utility, with energy supply and delivery charges zeroed out by applying those credits.

Fear of scammers is also a major barrier. Community solar projects are operating in a market with unscrupulous energy brokers. On its face, a CDG project can look a lot like an energy service company (ESCO) that’s using a green-energy pitch to lock consumers into predatory energy contracts. Since the deregulation of the state’s energy markets, a profusion of scammy ESCOs have left many New Yorkers wary of clipboard-wielding salespeople peddling electric bill discounts or clean power.

Another obstacle is that many households aren’t eligible to participate. Many community solar developers require would-be subscribers to pass a credit check with a score of at least 650, a hurdle many low-income households can’t clear. Community solar subscription can also be a problem for households that get help from the state Heating Energy Assistance Program.

A CCA based on renewable energy purchasing for a whole municipality does an end run around all of these barriers. Households within the CCA’s territory get a single bill, just like they would if they bought the default energy mix from their local utility. There’s no credit check, no contract to sign, and no barriers to eligibility. Behind the scenes, the town’s CCA administrator negotiates with energy producers to get a good fixed bulk rate on power for the whole town. It’s not a guaranteed discount of the kind a CDG offers, but energy prices will stay predictable, and the CCA has enough bulk buying power to get a good deal on current rates. And if, as a local resident, you decide you’d rather not be part of the plan, you can opt out.

As of this year, a new policy development in New York has renewable energy advocates really excited: CCAs are getting the greenlight to form exclusive relationships with CDGs, bringing the benefits of both models to whole towns and cities at once.

In February, with the blessing of the state Public Service Commission, Joule became the first administrator in the state to offer an opt-out CCA based on CDG community solar, in the tiny Western New York and Finger Lakes villages of Brockport and Lima. Joule is working to bring similar programs to the Hudson Valley towns and cities it already serves, Weinberg says, starting with the Ulster County town of Marbletown.

“That means that community solar with guaranteed savings does become a part of the default offering for folks,” Weinberg says. “They can still choose not to take it, but the default is that they will be enrolled in a community solar farm and receive the guaranteed monthly savings associated with that subscription, just by living in the community.”

Like every other aspect of New York’s evolving deregulated energy market, the CCA/CDG hybrid is something of a puzzle to explain to local energy bill-payers, and a recipe for acronym-heavy alphabet soup. It’s also potentially a huge boost for bringing clean energy to new places. Plugging a CDG project into a municipal CCA is a way to ensure that the financial benefits of renewable energy investment are flowing to low-income New Yorkers, not just wealthier households that are more likely to sign up for a standalone CDG project.

Sustainable Westchester is also planning to integrate CDG into its existing CCA programs, says executive director Nina Orville. “It will enable us to provide the benefits of community solar easily, efficiently, and broadly to low-income residents of Westchester County and people who live in environmental justice areas. For us, it’s critically important to be able to do that.”

Credit: Westchester Power
A Westchester Power solar array.

By supporting solar projects that are located in the nearby community, not just buying renewable power on statewide markets, CCAs with a CDG component can do more than lower people’s bills. They can support local green jobs. They can foster knowledge and a sense of community investment in local energy systems. And they could even help towns create local islands of grid resilience during floods, hurricanes, or other extreme events—an important priority in an era of accelerating weather disasters. Energy experts think smaller, community-based energy projects could help keep the lights on during large outages.

The trouble with New York’s grid is that it was built to be big—and when big infrastructure goes down, it makes a big mess.

Let a Thousand Solar Flowers Bloom

The vast complexity of the electrical grid is mostly invisible. Flick a switch, and electricity juice bottled by some wizard in a control room at your local utility flows into your ceiling light. In reality, it’s a lot more complicated than that, but most electricity consumers never need to think about the details. The important thing is that it works.

Most households only get one electricity bill, so it seems like common sense to think that you’re buying power made by Central Hudson (or NYSEG, or National Grid, or any of the other large utilities in New York). But these days, the utility you pay for electricity isn’t making much power. It is mostly a middleman between electricity customers and a growing number of smaller power producers: buying power and green energy credits from suppliers and producers on wholesale markets, maintaining distribution and transmission lines that shuttle power around its territory, and keeping track of administration and billing so customers don’t have to deal with separate bills for supply and delivery. Overseeing the whole system is the job of the New York Independent System Operator (NYISO), a nonprofit that runs the state’s wholesale energy markets, forecasts energy supply and demand, and monitors the movement of energy in the grid in real time.

That wasn’t always the case. Before New York State deregulated its power markets in the late 90s, NYISO didn’t exist, and the system was organized mainly around large, centralized power plants owned by the major utilities. The power market looks very different now, and has a lot more smaller participants. But the state’s aging transmission system was physically built to focus on large energy producers. Centralized electrical generation made sense in a time when the standard model of getting power to the people was a huge coal-fired plant wired up to serve a massive area. It also makes the system vulnerable to large outages. 

There’s a widespread public perception that renewable power is more vulnerable to outages than fossil-fueled electricity. It’s true that solar and wind energy make the task of balancing supply and demand more complicated, since they’re not steadily making power around the clock. But when combined with batteries or other forms of storage, smaller-scale renewable projects sprinkled widely across the grid can “bank” power for later use, creating local reserves that can be drawn on when important pieces of the utility-scale grid go dark.

After Hurricane Sandy caused massive power outages in 2012, the state started to pay more attention to the problems created by an overly centralized grid, Weinberg says. In the wake of that disaster, New York State energy policymakers have encouraged more distributed power generation and storage, and recent rulings by the state Public Service Commission that now allow new forms of community solar to flourish reflect that goal.

“The more decentralized your generation and the architecture of your grid is, the less systemic outages become over time,” Weinberg says. “We can have small areas that stay lit in an outage, because they have solar and storage. They have enough generation within the smaller system that they can actually shut themselves off or ‘island’ from the larger system, and keep themselves lit.” 

The prospect of boosting local resilience during extreme weather could potentially make CCAs more attractive to towns. If a CCA can serve as a mechanism for supporting a locally sourced community solar project combined with storage, it can help make sure the lights stay on locally even if a major transmission line or a transformer many miles away takes a critical hit.

Municipal forays into local energy storage are still in their infancy in New York. But Sustainable Westchester is getting into the game. This summer, the organization announced a partnership with energy storage company sonnen to develop a local microgrid scattered across the rooftops of participating homeowners. Dubbed a “Virtual Power Plant,” the system will provide 80 megawatt-hours of backup battery power during outages, and also serve as load-balancing to reduce demand on fossil-fueled “peaker” plants during times of high electricity demand. 

“We’re getting more deeply into this distributed concept, and what you can do on that end of things,” says Welsh.  

The cutting edge can be an uncomfortable place for small-town governments, and most municipalities don’t have a source of in-house energy expertise like Sustainable Westchester to hold their hands on developing more innovative projects. Orville, the program’s executive director, has a background in venture capital and is often called on to cast a critical eye on energy companies’ entrepreneurial business plans. “We get a lot of weird pitches,” Welsh says.

CCAs as a Springboard for Community Energy

So far, most of the municipalities in New York that have signed on to a CCA model of power purchase are mainly focused on getting a good rate for clean energy. But if a local government really wants to get involved in community energy, a CCA can be the nucleus of something a lot more ambitious, Metzger says. 

“CCAs should be engaging in a lot more community-based activities and efforts to improve efficiency, to plan for the buildout of renewables, to plan for [electric vehicle] infrastructure in a thoughtful way,” she says. “We could be doing so much more.”

As an organization founded to help municipalities take on energy-related projects and apply for state grants, Sustainable Westchester is actively engaged in doing that sort of work.

“We’re doing a lot of work that goes beyond the activities of the CCA: clean heating and cooling, electric landscaping, helping municipalities better manage recycling and trash collection,” Orville says. “We’ve helped our municipalities secure hundreds of electric vehicle charging stations.”

Kingston is still in the early stages of CCA planning and has yet to choose an administrator to oversee the city’s program. But the city plans to use its CCA to jump-start other local energy projects, Noble says. “We really want to ramp up—similarly to what’s done in the Cape Light Compact and places in California—the energy efficiency, weatherization, and clean heating and cooling aspects of this, so there is a funding mechanism for constituents to be able to benefit from that through the functionality of the CCA.”

Noble says the city is taking extra care to make sure that when they launch, their locked-in rates will be lower than Central Hudson’s variable rates, so residents will see savings right away. Kingston is also planning a major education campaign around the launch to make sure residents understand what’s going to change about their energy bills, and why. 

“Communication around energy is something we wanted to navigate very carefully,” Noble says. “Not everyone knows what happens when you flip on the switch of a light. Not everyone cares.”

Lissa Harris is a subscriber of Delaware River Solar’s Baer Road project, a CDG solar array in Callicoon.