California experimented briefly with electricity deregulation in the late 1990s, but pulled back after the California electricity crisis bankrupted the state’s three large investor-owned utilities (IOUs).  For residents and almost all businesses, CCAs (where they exist) are the only alternative to buying electricity from the local IOU.  (CCAs are not offered in cities that operate municipal electric utilities. Some large businesses are allowed to purchase power directly from independent electric service providers via “Direct Access,” but this program has been capped and its expansion is tightly constrained.  Legislation to expand Direct Access (SB 237) passed in 2018 however a decision recommending against further direct access expansion was passed in 2021.

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CCAs are opt-out programs and are established by a local ordinance voted on by the governing body of a county, city or special district (e.g. local water agency or public utility district).  No public vote or referendum is required. CCAs are set up either by a single jurisdiction (as in the cities of San Francisco, San Jose and Lancaster) or by two or more jurisdictions that create a Joint Powers Authority (JPA) to operate the CCA on their behalf.  When a JPA is used, each jurisdiction, regardless of its population, usually gets one seat on the JPA’s Board of Directors.  Directors are usually elected officials of participating jurisdictions, e.g., a city council member of county supervisor.  Directors are appointed by the jurisdiction’s governing body.

The JPA approach is favored because it creates a legal firewall between the potential future liabilities of the JPA and the assets of its member cities and towns, although member cities may be required to provide loans or loan guarantees to enable the JPA to secure bank loans for its initial working capital.

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Once a CCA has operated successfully for a period of time it is possible for it to expand geographically and add customers in other parts of the state, as both MCE and Sonoma Clean Power have done.

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Initial power supply contracts for new CCAs are typically for 5 years or less, but 15-25 year power purchase agreements (PPAs) for solar, wind and geothermal generation are common for more established CCAs.  Development of local renewable energy projects is often a core goal.  Most CCAs in California also offer solar net energy metering tariffs that are slightly more generous (e.g., 1 cent per kWh) than those offered by IOUs.  Many also offer feed-in-tariff incentives for medium and large-scale local solar projects, energy efficiency programs, and demand response programs.

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California’s first CCA, MCE, was launched in 2010 to serve customers in parts of Marin County. The program that was once branded as a “risky scheme” has proven to be economically viable and has expanded its service territory and its roster of programs and services.

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In recent years with new CCA launches and communities opting to join already existing CCAs, total annual loads for these programs have steadily increased. The total CCA annual load in California has increased by 16% between 2021 and 2022 and is set to increase by 11% between 2022 and 2023.

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