Community Choice Aggregation (CCA) – what is it?
It's a simple concept, sort of a buyers' club made up of towns within a region who band together to negotiate a price on the electricity supply of their citizens. How that concept becomes a reality isn't so simple. Jeff Domanski, head of a nonprofit called Hudson Valley Energy, was there to explain it to the Rochester Environmental Conservation Committee at their March meeting. He came equipped with a slide show that broke down exactly how a CCA works.
To begin with, said Domanski, “the CCAs don’t actually buy electricity for their community members. But by grouping together, [the towns] have leverage to negotiate a rate that people can take advantage of on an individual basis.” Every customer still gets a bill from (locally) Central Hudson. Towns that are members of a CCA change one thing: The default energy supplier becomes the one chosen by the CCA, rather than CH.
Domanski put up a slide of a Central Hudson bill, which is divided into two parts, one for delivery charges and one for supply. CH owns the power lines and bills for delivery. CH is also the default energy supplier unless an individual chooses to deal with a third-party supplier, such as ESCO, or their town can change that default supplier for everyone. Residents could still opt out if they would rather keep being supplied by CH or a third party.
Domanski's organization is a partner of the regional CCA, Hudson Valley Community Power (HVCP). Marbletown is a member of HVCP, along with nine other towns including New Paltz, Saugerties, Poughkeepsie, Beacon and Red Hook. HVCP was designed by Joule Community Power, which also chose the power supply company for the CCA and negotiates the price. For that service, Joule earns an administrative fee, which is charged to electricity consumers.
"Columbia Utilities is the supplier selected, which engages the owners of power production for the power supply," Domanski explained. "The sources must be 100% renewable sources (hydropower, wind, solar), but we only learn the specifics retroactively through the annual disclosure report."
New York state is supporting CCAs – they are authorized by the Public Service Commission – as a way to encourage renewable energy, but it’s the individual town’s choice whether to offer renewables as their only default or also offer a “standard mix” including all energy sources, renewable, fossil-fuel and nuclear. The CCA gets a better deal on 100% renewable than an individual can get, but the standard mix will be even cheaper, generally speaking.
"It gives people comfort to know that there’s an option, even though typically there’s a very small percentage of people who do that," said Domanski. "Sometimes they say, 'I’ll pay the standard,' but then when they understand it, they change to 100% renewable … so from a psychological perspective, there’s some advantage.”
Even if the town only offers only 100% renewable in their default energy supply, like Marbletown or Saugerties, a customer still has the power to choose CH as their supplier. Tom Conrad of the Marbleton ECC explained, "The Hudson Valley Community Power CCA is about both cost reduction and renewable energy, but how much it is about each depends on the adopting municipality. HVCP offers two electricity supply options: 100% renewable and standard. The standard rate costs users $0.006 (3/5ths of a cent) per kWh less than the renewable rate. The municipality decides which of these plans is the default. In Marbletown, we put into our enabling law that the 100% renewable rate would always be the default, so, in Marbletown, I would say that the CCA is about getting green electricity at a competitive, fixed rate that protects residents from price spikes. In short, it's about both being green and saving money when it counts. When Central Hudson's rates have been low (summer of 2020), our residents were paying a little more. By making 100% renewable electricity the default, we have demonstrated that renewable energy is more important to us than cost savings. If we, or the Town of Rochester, were to choose the standard rate as the default, then I would say that that implementation of the CCA was primarily about saving money."
Of course, the sources of the power that is delivered to your home through CH’s power lines can be coming from any number of places. Domanski estimated New York state’s renewable percentage right now as being around 20% of its total energy sources, including hydroelectric, wind and solar. "The rest is nuclear and gas, for the most part.”
That being the case, how can CCAs encourage green energy?
Here's where it gets somewhat wonky. What the CCA does is akin to a corporation buying carbon credits. The member towns can direct their energy supply payments exclusively to renewable producers in New York state by buying Renewable Energy Certificates (RECs), aka credits. Domanski said, "When a customer’s supply payments go to a renewable producer, they can say their home/business/et cetera is exclusively powered by renewable production sources ... this has real influence (immediately and as a longer-term signal) in driving demand for more renewable production on the New York state grid, resulting in a large proportion of renewable electrons within the mix."
"There is one difference between what Marbletown has and what is (currently) being proposed for Rochester," Konrad added. "Marbletown is not only doing the electricity supply option, but we're working on launching opt-out community solar as well."
Yes, there's a way to encourage solar energy specifically, said Domanski. A community can issue a request for proposals from energy suppliers, “and in a parallel way, a request could be issued to identify community solar developers” who would offer subscriptions to community members. As with energy supply, the town could decide to make community-solar subscription an opt-out rather than opt-in choice; if you do nothing, then, you’re a subscriber, with the advantage that you don’t have to have an individual contract with, say, Nexamp, which owns the solar arrays in Rochester and has a lot of customers in the town, and deal with the complexities of having electric bills coming from both Nexamp and CH. If Rochester were to follow the example of Marbletown, “theoretically, every community member could take advantage of the opt-out by cancelling their [contract] and joining the town’s."
CCAs are good news overall for solar developers like Nexamp, though, said Domanski. “It’s very exciting to all the community solar developers … the beauty of doing business under the CCA umbrella is that they don’t have to do any marketing … individual contract signing also goes away. So life gets easier in this beautiful, symbiotic relationship."
Rochester's joining Hudson Valley Community Power is just a possibility, for now. The very first step has to be the adoption of a local law enabling the town to do business with the CCA. Domanski is in touch with the town board and hopes to be invited soon to make his presentation at a public board meeting.
Hudson Valley Energy
Hudson Valley Community Power
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