Many California communities are considering dramatic changes to how they use and purchase electricity. It’s important to separate fact from fiction. Our goal is to replace dirty power from out of state with renewable energy that’s produced here in California and creates good middle class jobs.
But to do that, We need truth in power.
About Truth in Power CA
Truth in Power California (CA) is a coalition of energy consumers, working families and taxpayers dedicated to strengthening California’s clean energy economy. As more California communities move towards Community Choice Aggregation (CCA) to meet their local power needs, Truth in Power CA is committed to educating the public and elected officials about the potential costs and consequences of these transitions, and to ensure they meet the standards of transparency, environmental sustainability, growing California’s energy infrastructure, and creating middle class jobs.
how and where California gets its electricity
California is the nation’s most progressive energy consumer, and has committed to 50% use of renewables by 2030.
The energy that powers our homes and businesses currently comes from a variety of sources: wind, solar, hydroelectric power, biogas, natural gas, nuclear, oil, and coal.
The vast majority of this power is generated in one of three ways – at facilities owned by one of three regulated private utilities, purchased from smaller plants owned by hundreds of independent energy producers across California, or purchased from out of state producers.
Once acquired, this power is fed into a grid – a sophisticated network of high voltage transmission lines that carry this power across our state to sub-stations, which direct the power across a distribution system of above ground and below ground service lines that ultimately connects directly to customers across our state.
The size of these larger utilities provides market leverage to acquire power at competitive rates, while also making critical investments in maintaining and modernizing California’s electrical grid, transmission and distribution systems.
about community choice aggregation (cca)
Community Choice Aggregation, or CCA allows local governments to procure electricity for use by residents, which is then delivered by private sector utilities who also provide consumer metering, billing, collection and all other retail services.
Set up in the wake of California’s 2001-2002 energy crisis, CCAs were originally conceived as tools to lower energy costs, and to aggregate more clean energy sources for California communities, consistent with local values. All told, seven US States have CCA systems in place.
In California, due to high start-up and management costs, a smaller customer base, few resources to invest in expanded local power generation capacity, and a lack of market leverage and technical expertise, CCAs have struggled to deliver on this potential. In some cases, CCAs have even been found to increase costs, outsource jobs, and rely on questionable marketing practices and dirty power from out of state.
Ultimately, there is a right way and a wrong way to CCA. And Truth in Power California is dedicated to providing consumers and elected officials who choose to pursue a CCA with the tools and information they need to protect consumers and strengthen California’s clean energy economy.
how are CCAs structured?
CCAs in California can be approved by local ordinance (city, county, or utility district), and typically operate in one of two ways.
The most common method is as a non-profit Joint Powers Authority – led by a board of directors made up of representatives from participating municipalities. Another option is as a single city or county CCA, administered through an Enterprise Fund. In both cases, startup costs are borne by taxpayers – typically in the millions of dollars – after which operations are supposed to be funded by fees from ratepayers who use the electricity.
CCAs in California automatically enroll consumers from the municipalities they serve. In fact many consumers are unaware that they are enrolled in a CCA because their bill still comes from their previous utility.
While delivery, billing, maintenance of transmission lines and all other retail services remain the responsibility of incumbent utilities (such as PG&E, Southern California Edison, or San Diego Gas and Electric), a CCA can choose what type of electricity to purchase and where the electricity is produced. For example, a CCA could choose to buy renewable, low carbon emission energy and support the State and local economy by purchasing energy produced in the State of California by workers paid living wages. It can also offer locally tailored energy programs, or premium programs that allow customers to choose higher levels of renewable energy.
The potential benefit of CCAs is that they increase competition with traditional utility providers, CCAs source energy through a process that enables a wide array of power producers to compete for business, and offers consumers choices with respect to the type of energy they wish to use.
Unfortunately, things don’t always go as advertised. California’s first CCA, Marin Clean Energy (MCE), has been widely criticized for failing to produce meaningful cost savings and for deceptive marketing practices. MCE depends on something called unbundled Renewable Energy Certificates (RECs). You can learn more about Marin Clean Energy’s use of these products here, here, and here. RECs are NOT renewable power. They are paper certificates purchased from renewable producers, which are used to offset power form dirty energy sources such as coal or oil. Unbundled RECs are used by CCAs to present dirty power as renewable to the consumer. MCE’s use of unbundled RECs have been used to mask its reliance on fossil fuel based power generated by Shell Oil – a Texas company and one of America’s worst polluters.
a brief history of CCAs in CA
California’s history with CCAs dates back to the California Legislature’s passage of AB 117 in 2002. This law was preceded by an historic state energy crisis. This crisis was caused by de-regulation, which enabled illegal market manipulation by energy suppliers such as Enron. This ultimately caused huge spikes in wholesale energy prices, rolling blackouts, and bankruptcy of the state’s largest investor-owned utility, PG&E.
In no small part due to the hight startup costs and studies showing that local government agencies could not provide power at a lower cost than the existing utilities, the first California CCA did not come online until 2008. As California has pursued the nation’s most aggressive clean energy goals in an effort to combat global climate change, more communities have brought CCAs online since 2010, with many more actively under consideration.
Despite their promise of cost savings, more choices and clean energy, many of California CCAs have failed to deliver.
no new green energy
Most current CCA contracts in California do not require any new green power generation. Instead, they largely rely on paper credits known as “RECs” (Renewable Energy Certificates) – credits or “offsets” that are purchased from renewable producers and used to mask dirty power from out-of-state that is actually delivered to consumers. RECs are used as a way to ensure consumers receive reliable power when the wind isn’t blowing, sun isn’t shining or other renewable sources can’t be delivered to the homes when needed. At best, when CCAs rely on dirty energy and RECs to present their power as green, it means they are failing to invest in new local clean energy alternatives and build a greener California energy grid. At worst, it means they are actively deceiving the public.
start up and administrative costs spike utility rates
Communications made by CCAs to consumers in California have consistently avoided or misrepresented the true cost of the programs. Covering the costs of new CCA organizations have often required ratepayers to pay more than what they currently pay. A grand jury in Marin recommended ceasing their program over such cost concerns. In some cases, marketing and administration costs alone eat up a significant portion of utility rates, leaving only a fraction of the funds available to purchase green or brown power. Florida’s Sunshine Energy CCA had to be terminated by the state after it was revealed that 76.4 percent of the contributions were spend on marketing and administration. Compensation and bonuses for CCA executives have been roundly criticized in the press.
CCAs fall short on consumer choice
In order to create enough demand for CCAs to be viable, program architects have enrolled large swaths of the populations without their consent and began charging them higher rates. While there is an opt-out provision, customers have to proactively engage with the CCA, understand and comply with the opt-out provisions, and pay a fee.
some CCAs have hurt our environment
Instead of investing in renewable power generation here in California, many California CCAs have contracted with notorious polluters from out of state. Marin Clean Energy, for example, has contracted with Texas based Shell Oil– a company with one of the worst environmental records in America. In addition to rate hikes that kill jobs locally, shipping local ratepayer dollars out of state to support Shell undercuts the environmental and economic goals to which all CCAs should aspire.
CCAs subsidizing low-road employers
While public utilities generally provide all their frontline technical and customer service workers with livable wages, secure benefits and a voice on the job, most CCAs are not bound by these standards. Marin Clean Energy, for example, has opted to contract out dozens of call center jobs to low road contractors, effectively driving more working families into poverty. Worse, by contracting with companies like Shell Oil and Noble Americas Energy Solutions, Marin has failed to invest in developing local renewable power resources that could provide good living wage jobs here in California.
The Right Way to CCA
a smarter way forward
Grow the Grid with REAL renewable power:To be environmentally sustainable, CCAs should prioritize the purchase of actual renewable power, place limits on the amount of dirty power that can be purchased with unbundled RECs, and commit to investing their energy procurement budgets into the development of local clean energy power plants. New CCAs should be required to source their energy locally, and to make the necessary investments that ensure California leads the world in the development of clean energy power generation capabilities.
Create Good Middle Class Jobs: To be economically sustainable, our CCAs must match the commitment of our existing public utilities to the creation of living wage jobs. Frontline utility workers and customer service professionals are paid living wages, with secure benefits and a voice on the job. Public utilities also only purchase green power from generating facilities whose construction and operations meet these standards, and provide a dedicated funding stream for apprenticeship programs that help to train California’s future clean energy workforce. To build a cleaner and economically sustainable future, we need our CCAs to match this commitment, and not outsource our clean energy future to low-road businesses that only create more poverty.
Transparency in Marketing, Billing, Enrollment, Energy Source: Tens of thousands of California CCA customers do not know they’ve been enrolled in a CCA, how to opt out, whether their bill is cost competitive, or whether the “clean” electricity that’s powering their home or business is actually dirty power being masked by unbundled Renewable Energy Certificates. Customers deserve transparency and choices. That requires clear notification about who is procuring their power, clear information regarding whether/how much their rates have changed, a streamlined system for opting out, and the source of all electricity that is being categorized as “clean” or “renewable.”
Sign the Petition
We are demanding that if any CCAs are created to serve our community, they be required to meet standards that will strengthen our economy, protect our environment, and address the needs of taxpayers, ratepayers and working families. If you want our community to support CCA, please make sure it gets done the right way.