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Economic Development Research Group Blog

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Community Choice Aggregation Accelerates Renewable Energy Adoption

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EDR Group and its parent EBP are involved in Community Choice Aggregation (CCA) in California, Massachusetts, cities in Switzerland and other European cities. We monitor and participate in a range of CCA efforts.

The City of Newton, MA (population 89,000)  just entered a 22 month agreement that will provide 60% local renewables, procured through a competitive bid process. The standard generation price per kilowatt hour for customers will be 11.34 cents.  This compares to Eversource’s winter Basic Service rate (beginning January 1, 2019) for residential customers of 13.70 cents per kilowatt hour. The utliity’s summer rate will be higher. 

Under a 1997 Massachusetts law allowing competitive electricity purchases, about 40 communities now purchase their electricity for the entire community, businesses and residences, significantly cheaper than the basic service rates provided by regulated utilities.   Community Choice Aggregations have been effective at lowering electric rates but over time they have evolved into vehicles accelerating the use of renewable energy sources exceeding state mandated renewables percentages while still lowering rates. 

The costs of renewably-generated electricity have continued to decrease, making possible to purchase generation mixes of fossil fuel and renewable generation at lower cost than utility basic service.  All customers also pay their utility for transmission and distribution services, renewable energy and energy efficiency.

Massachusetts requires that community choice aggregations offer a minimum of 10% renewable components but communities are free to exceed that and the floor continues to rise.  The town of Brookline, MA recently concluded an agreement that incorporates a minimum of 25% local (in-state) renewables.  Brookline also offers a 100% option at a higher cost. Community Choice Aggregation agreements are all organized on an opt-out basis. Customers may decline to participate initially, drop out at any time or return at any time with no penalty.

What started as a simple cost saving device in states with electric competition is now morphing into a mechanism that is accelerating renewable energy adoption while continuing customer savings.

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