CCAs, a (potentially!) promising future for energy justice in California
By Cole Dill-De Sa
CCAs are revolutionizing the way Californians get energy. But their implementation throughout California’s counties are following a concerning trend. How can we fix this?
For many decades, energy distribution in California has been dominated by a handful of privately owned companies. Most notably, these are Pacific Gas & Electric (PG&E), Southern California Gas (SoCalGas), and San Diego Gas & Electric (SDG&E) who together provide roughly 75% of the energy transmitted in California. However, these companies have consistently proven to neglect their responsibilities to provide safe and accessible power to California’s communities. For example, PG&E has been found responsible for hundreds of counts of criminal neglect for not maintaining their lines to prevent wildfires, and this is one among many instances of recent failure coming from the company and its leadership (see: filing for bankruptcy, San Bruno gas explosion). Furthermore, California can currently produce 20% more than its demand at peak hours, a whopping surplus. Yet, rates have not fallen. Instead, California’s consumers have steadily paid higher and higher rates to compensate for the guaranteed profits IOUs earn for unnecessary energy investments. However, a solution is available for California’s communities.
In 2002, the California State Legislature passed AB 117 — a bill allowing the formation of Community Choice Aggregations (CCAs). CCAs allow communities throughout California to collectively organize by electing representatives that negotiate prices, regulations, and energy sourcing with utilities. The benefit of CCAs for the consumer is that collective bargaining power gives communities access to cheaper energy. Communities elect CCA representatives, who negotiate directly with energy producers and purchase wholesale energy at competitive rates rather than through “middle-man” distributors, namely: PG&E, SoCalGas, & SDG&E. According to CalCCA, an organization that promotes CCA interests and conducts outreach, CCAs empower communities “to meet climate action goals, provide residents and businesses with more energy options, ensure local transparency and accountability, and drive economic development and green jobs.” CCAs have become an increasingly popular choice for consumers in California who are tired of bad practice from both state regulatory committees and distributors — to date, about 10 million Californians receive their energy through CCAs.
To fully understand the impact CCAs would have on California energy distribution, we need to understand how the current system incentivizes failure.
Investor-owned utilities (IOUs) like PG&E, SoCalGas, and SDG&E are privately owned companies that make decisions to benefit investors, not the public. Despite this, the state of California guarantees IOUs profits because of their “public service” role in distributing energy to consumers. Unfortunately, this system is rife with dysfunction.
Profits for IOUs are primarily generated from energy investments into infrastructure projects around the state which are guaranteed to return a profit through state subsidization (see: this LA time article and this paper by the Sustainable Economies Law Center for more information). This system is meant to incentivize California’s IOUs to maintain, upgrade, and broaden California’s vast energy grid, which must be able to provide electricity to all Californians despite areas of the state being uncompetitive for infrastructure investment. Unfortunately, IOUs, as we’ve seen in the case of PG&E, have corrupted that responsibility to overinflate their profits.
The state regulatory committees that oversee IOU investment profit are being influenced by IOU lobbying. In 2019, PG&E spent at least $2.1 million on direct contributions to political candidates while maintaining highly funded teams of lobbyists, consultants, and outreach specialists. Furthermore, indirect contributions are not tracked but are likely incredibly significant. In the past few decades, IOU’s have been approved to invest in the rampant development of energy production. This unnecessary development is the cause for California’s high-surplus, high-cost energy phenomenon which CCAs can remedy.
However, the adoption of CCAs throughout California is following a concerning pattern. All but two of the counties in California who have, or have planned to implement, CCAs are communities located along California’s coast. This is concerning, as California’s most disadvantaged communities (DACs) are in the central valley, raising cause for concern about the accessibility of CCAs along class lines. The geographic divide between CCA and Non-CCA communities substantiate class disparities between California’s richer coastal and poorer inland regions. This needs to be rectified now. In terms of the proportional impact on individual well-being, DACs would benefit most from discounted energy rates relative to non-DACs.
Why haven’t central California DACs been included in the CCA movement? According to the California Environmental Justice Association (CEJA) report on “Building a Just Energy Future,” accessibility in language within policy outreach and implementation are partially to blame. Policy implementations such as AB 117 are written, debated over, and passed exclusively in English, which makes it difficult for the predominantly Spanish-speaking communities in the Central Valley to access this crucial information. Furthermore, these communities are already plagued by disadvantages borne from legacies of institutional exploitation, which has sewn a deep distrust of power and centralized authority in these communities. This distrust percolates into their perception as broad band skepticism towards any policy created by the “establishment,” including CCAs. This must be rectified.
CCA’s are started by residents petitioning their local governments to implement change. Outreach to on-the-ground organizations — including Spanish radio stations, Latine community centers, and partnerships between local environmental justice organizations — must be conducted by California’s state government, other grassroots organizations, and non-profits to ensure the equitable implementation of this policy. Environmental justice organizations and non-profits with experience in community organizing on this issue are helpful resources for questions regarding grassroots organizing. For example, CEJA cites Local Clean Energy Alliance in the Bay Area, Communities for a Better Environment, & East Bay Community Energy as integral to the establishment of CCAs in their respective communities and around California. Furthermore, CalCCA is essential in connecting people to the proper knowledge, capacities, and support regarding CCA implementation — they are a helpful resource for local organizations wanting to advocate for their own CCA.
We cannot forget about the legacy of distrust these communities feel about authority. An essential component of the CCA structure is that there is no prescribed template. CCAs must be co-designed by local networks of grassroots organizations, in collaboration with nonprofits and others. This way, it is ensured that CCAs best represent the people for which they are meant to empower.
If you are interested in CCAs, or advocating for one in your community, reach out to the grassroots organizations mentioned above, CalCCA, or CEJA for support. If you feel like this issue is pressing, don’t be silent. Silence is the reification of the status quo and “as it stands” is not enough for everyone to have a firm footing.
Cole is from Hawai’i and a student at Stanford University.