Community Choice Is Driving California's Precocious Energy Revolution

California is on track to meet its clean-energy goals a decade early thanks in part to communities demanding and delivering renewable energy faster and cheaper than utilities can, according to a report released this morning.

A growing number of Community Choice Aggregators (CCAs) in California are not only delivering a higher percentage of renewable energy than utilities, they’re also causing utilities to offer a higher percentage, according to the report by the UCLA Luskin Center for Innovation.

“The  rise  of  CCAs  has  had  both  direct  and  indirect  positive  effects  on  overall  renewable  energy  consumed  in  California,  leading  the  state  to  meet  its  2030  RPS  targets  approximately  ten years  in  advance,” write Luskin Center director  JR  DeShazo,  lead author Julien  Gattaciecca and co-author Kelly  Trumbull.

CCAs allow communities to make their own agreements with energy providers. California's CCAs offer a minimum of 37 percent renewable energy, a maximum of 100 percent. They average 52 percent renewable energy.

Investor-owned utilities offer renewable content between 32 and 44 percent.

CCAs only make up about 10 percent of California’s energy market, but they’ve had an outsized influence. As they pull customers away from traditional utilities, the utilities find themselves offering a higher percentage of renewables because of long-term contracts they’ve signed with renewable-energy producers.

As a result, even traditional utilities expect to offer 50 percent renewables by 2020. California’s standards call for that level of renewable penetration by 2030.

The authors expect the state’s three utilities—Pacific Gas & Electric, Southern California Edison, and San Diego Gas & Electric—to have an average of 67 percent renewable energy in their portfolios by 2025.

CCAs are also growing rapidly and are expected to blossom their market share to 16 percent by 2020.

At the same time, utilities are losing market share, from 78 percent in 2010, when California’s first CCA opened, to 70 percent today. The California Public Utilities Commission expects 85 percent of the state’s power load to depart investor-owned utilities. Some of those customers will move to CCAs, but others will benefit from their own or their neighbors’ power generation, still others from California’s Direct Access Program, in which individual customers can purchase power directly from an alternative electricity provider operating within a utility’s service area.

CCAs also compensate rooftop-solar prosumers better than utilities, up to three times better, according to the report. But their growing presence is not without shadows.

The state's increasing reliance on intermittent renewable energy could challenge grid stability, though the report found it has not done so yet, in part because CCAs so far have worked with existing power customers and existing power producers. They’ve not yet brought large amounts of new generation onto the system.

They also tend to rely on short-term contracts, in part because they are too new to have a credit score and track record. That makes it more difficult for California energy planners to predict what may happen in the long term.

The report was one of three released this morning by Next 10, a San Francisco think tank geared toward innovation and sustainability.