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Community Choice Aggregation, abbreviated CCA, also known as Community Choice Energy (CCE), municipal aggregation, governmental aggregation, electricity aggregation, and community aggregation, is an alternative to the investor owned utility energy supply system in which local entities in the United States aggregate the buying power of individual customers within a defined jurisdiction in order to secure alternative energy supply contracts. The CCA chooses the power generation source on behalf of the consumers. By aggregating purchasing power, they are able to create large contracts with generators, something individual buyers may be unable to do. The main goals of CCAs have been to either lower costs for consumers or to allow consumers greater control of their energy mix, mainly by offering "greener" generation portfolios than local utilities. Currently CCAs are possible in the states of Massachusetts, Ohio, California, Illinois, New Jersey, New York, and Rhode Island, and served nearly 5% of Americans in over 1300 municipalities as of 2014.

How CCAs Function in Electricity Distribution

Figure 1: How CCAs interact with utilities and consumers

CCAs are local, not-for-profit, public agencies that take on the decision-making role about sources of energy for electricity generation. Once established, CCAs become the default service provider for the power mix delivered to customers. In a CCA service territory, the incumbent utility continues to own and maintain the transmission and distribution infrastructure, metering, and billing. In some states, CCAs may be considered de facto public utilities of a new form that aggregate regional energy demand and negotiate with competitive suppliers and developers, rather than the traditional utility business model based on monopolizing energy supply. In California, CCAs are by legal definition not utilities, and are legally defined in California law as electric service providers.

Policy Basis for CCAs

In the US, CCAs are permitted in eight states: Massachusetts, Ohio, California, Illinois, New Jersey, New York, and Rhode Island , but are only present in the first seven. States must first pass legislation allowing for the formation of CCAs before an aggregate can form. Currently, only states with electric deregulation have passed such legislation. This is a natural progression as electricity deregulation separates the functions of electricity generation from transmission and distribution allowing consumers to choose their electricity generator. This separation then allows for CCAs to choose the electricity generation mix on behalf of consumers without having to establish the infrastructure to move electricity. However, only 17 states and the District of Columbia have deregulated markets. The remaining 33 states are considered regulated, where utilities retain a monopoly on generation, transmission, and distribution of electric power.

Legal Authorization for Community Choice Aggregation
State	Year	Authorizing Legislation	Authorizing Legislation Name
Massachussetts	1997	M.G.L. ch.93A §1	Utility Restructuring Act of 1997
Ohio	2001	Local Ballot Measure	N/A
California	2002	Assembly Bill 117	N/A
Illinois	2002 (residential)	220 ILCS 5/Art. XVI	Electric Service Customer Choice and Rate Relief Law of 1997
New Jersey	2003	Assembly Bill 2165	Government Energy Aggregation Act of 2003
New York	2016	PSC Case 14-M-0224	Order Authorizing Framework for Community Choice Aggregation Opt-Out Program
Rhode Island	1996	RIPUC No. 8124	Utility Restructuring Act of 1996

Massachusetts

The nation's first CCA, the Cape Light Compact, currently serves 200,000 customers, running aggressive and transparent energy efficiency programs and installing solar installations on Cape Cod schools, fire stations and libraries.

Many other towns and cities have now formed CCAs or are working to complete the initial process.

California

Overview

In 2002, California State Legislature passed Assembly Bill 117, enabling CCA. The Bill allowed CCAs, and mandated that customers be automatically enrolled in their local CCA, with an option to opt out. The law also makes the clarification that, in California, CCAs are by legal definition not utilities, and are legally defined in California law as electric service providers.[2]

Rhode Island

The Utility Restructuring Act of 1996 deregulated the utility market within Rhode Island, allowing consumers to choose their electricity generation supplier and CCAs to form. While this act allowed for the creation of CCAs, there are currently no residential or small business CCAs available for private consumers to join. The only CCA option is for municipal facilities.  

Rhode Island Energy Aggregation Program (REAP)

The Reap program “is operated by the Rhode Island League of Cities & Towns and serves 36 of Rhode Island’s 39 municipalities and four school districts”. The Reap program facilitated the purchase of electricity by the municipal entity by submitting requests for proposals, reviewing bids from approved electricity generators, and selecting companies that they believe will be the ideal provider for each municipality. The program reported in 2012 it had achieved cost savings of 20-30% over the standard offer.