Starting in earnest almost a decade ago, Community Choice Aggregators or CCAs have become a substantial force in the California power market and open some new doors for clean tech companies. By a law passed in 2002 (and based on a pioneering law passed in Massachusetts in 1997), “aggregations” of customers in California were allowed to opt-out of taking electricity provided by investor-owned utilities and instead buy power themselves, with the utilities obligated to deliver it to them for a fee. After a rocky start and the defeat of the anti-CCA Proposition 16 sponsored by PG&E in 2010, things have been moving faster. There are now 18 CCAs in operation with at least a dozen more in formation. The 18 CCAs together are buying over 6300 MW of power and about 32 billion kWh of energy per year, roughly double the size of SMUD. It is expected CCAs will be buying double the current amount ten years from now.
The motivations for forming a CCA include a desire to move faster to switch to all-renewable power, a desire for local control, and an ability to favor local suppliers and those with clever innovations. All those create an excellent climate for companies that can provide power from renewables in new ways.
The CCAs will all be buying power through transparent RFP solicitations, BUT many of them also will accept proposals for small amounts of power from nearby companies, even if they don’t have a long track record. A good way to get started is to look at the website of the alliance of all California CCAs here. This site tells you who they are and how to contact them. It also lists active RFPs.
If you can come up with a project to generate power or store power, even in small quantities, you should consider talking to a CCA about or entering their on-going solicitation process. They could be just the kind of customer you are looking for–one willing to stretch to take a risk to help the “home team”–that can lead to a fundable pilot project for your technology. For example, MCE (formerly Marin Clean Energy but now serving areas far beyond Marin) offered to buy up to 25 MW of power from local suppliers, starting with the first 2 MW at 13.7 cents/kWh and a declining price for subsequent 2 MW blocks. They currently are offering 8.5 cents/kWh to fill one of the blocks. You may note those are great prices in today’s market. Other CCAs may imitate MCE’s lead.
In sum, here are the primary reasons for a small clean tech company to take a look into this booming market:
- There are multiple buyers, not just one big utility, so you can shop around
- They are willing to look at relatively small amounts of power
- They are willing to give projects in their service areas a preference, including small price premiums
- They are willing to be creative if someone has a new idea or wants to do a pilot
- They are able to move fairly quickly and have a transparent solicitation process
- They are looking not only at generation projects but at storage and efficiency projects as well
ABOUT THE AUTHOR
Gary Simon is the Chair of CleanStarts Board. A seasoned energy executive and entrepreneur with 45 years of experience in business, government, and non-profits.