Community Choice Basics

Community Choice Energy in a Nutshell

Community Choice Energy is a Local Utility

Also known as Community Choice Aggregation, California state law allows a city or group of cities to establish a not-for-profit electricity provider that takes over two of the three main functions of a monopoly utility like SDG&E. First, the Community Choice provider purchases and generates power for its customers. Second, it sets the rates we pay for the electricity that we consume. The third function, delivering the power, is what SDG&E would continue to do. They would operate and maintain the grid. Also, they would continue to send you a monthly bill. A portion of the payment you make to SDG&E would be transferred to the new Community Choice provider to pay for the actual power you consume. It’s a seamless process.

Community Choice Energy Really is a Choice

The Community Choice provider becomes the default electricity provider for all the residents, businesses, and schools in the member cities. However, before a Community Choice provider goes operational, electricity customers are given notice and can opt out, choosing to stay with the monopoly utility. Or they can opt out later if they don’t like the Community Choice provider for some reason. So, you see, this is really a choice, not a new monopoly.

Community Choice Energy is Succeeding

There are nine Community Choice electricity providers operating in California, and four more are close to operational (see our Resources page to explore their websites). All operational CCEs have better rates and provide a larger percentage of clean power than the alternative for-profit utility.

Benefits of Community Choice Energy

More Clean Energy

Community Choice providers are set up with the goal of providing more clean energy than what we get from the fossil fuel addicted monopolies. Each of the choice providers has a basic plan that they offer their customers, and all five in California are providing more clean energy to their customers, anywhere from 5% to 20% more. Also, they offer customers that want to be really green a 100% clean energy option for anywhere from $5 to $20 more per month.

What about rooftop solar? While SDG&E has been trying to kill it, the choice providers have been setting up their own solar programs so that existing and future rooftop solar customers get higher compensation for the excess energy they put into the grid. This has been especially good for public schools that have invested in solar.

Local Jobs and Local Savings

Community Choice providers have also been using electricity customer dollars to invest in local clean energy projects that create jobs and save money for residents, businesses, and schools. The basic idea is that a CCE reinvests ratepayer money into local projects instead of paying dividends as a monopoly utility does. For instance, Marin Clean Energy is building an impressive record of local clean energy projects. We love the example of their partnership with the Buck Institute, a medical research organization, to solarize their parking lot. This project created local jobs and will help Buck save $300,000 a year as it does research on aging and disease. Does SDG&E put an emphasis on helping local nonprofits, schools, and businesses with projects like this?

Fighting Climate Change

If fighting climate change is important to you, know this. When the cities of San Diego and Chula Vista were putting their Climate Action Plans together, they found that of all the policies and programs they could implement, Community Choice was by far the biggest way to reduce greenhouse gases.

Electricity Rate Competition

A Community Choice provider takes over rate setting for the energy you consume. The obvious benefit is that SDG&E, which has the highest rates in California, would finally have competition. California’s choice providers, while providing a lot more clean energy than the monopolies, have been offering lower rates. How much lower? On average 1%- 5%.

Local Governance, Control, and Accountability

When a group of cities creates a CCE, they form a not-for-profit organization (a Joint Powers Authority, or JPA) and hire knowledgeable management and staff to run it. You already are being served by several JPAs. A good example is the Encina Wastewater Authority, a JPA (which includes the cities of Encinitas and Carlsbad) that protects public health by ensuring that wastewater is always contained and processed through a local wastewater treatment plant.

In a CCE JPA, decisions about how to spend electricity customer dollars and set rates are made democratically by a board of directors in local meetings with public participation, similar to your city council meetings. The boards of directors are comprised of representatives—typically a council member that is accountable to voters—from each participating city. This is the opposite of SDG&E making decisions in their closed board room and then seeking approval from the unelected commissioners of the California Public Utilities Commission far away in San Francisco.

The Benefits are Clear; this is Why We Are Working to Support Community Choice Energy in Coastal North County!