ITHACA, N.Y.—The City of Ithaca recently began the process of exploring a program known as Community Choice Aggregation (CCA) as a part of the Ithaca Green New Deal (IGND), the City’s landmark 2019 resolution which committed Ithaca to pursue carbon neutrality community wide by 2030.
While complex and innovative programs, such as the City’s effort to electrify its building stock, will need to be developed in order for Ithaca to achieve its ambitious decarbonization goals, CCA is a program that has been around since the late 1990s.
A CCA allows local governments to go out onto the open market and purchase power directly from energy service providers other than the one that dominates its retail region, which in the case of Ithaca is New York State Electric & Gas (NYSEG). The power is being purchased on behalf of the residents of a town, village, or city. In New York State, residents of a municipality have the right to opt out of CCA agreements.
Utilities in New York State essentially operate as regulated monopolies, having nearly exclusive rights to provide a customer base with energy. In exchange for market dominance in the area, these utilities must comply with granular regulatory oversight from the New York Public Service Commission (PSC).
Municipalities don’t get to choose where their power comes from when buying from NYSEG. A CCA can be crafted in order for a community to find cheaper energy, regardless of whether it’s generated from solar farms or natural gas. CCAs can include multiple municipalities. Over 100 municipalities are a part of a CCA in New York State.
“The greatest point about [a CCA] is to show that people are not powerless. No pun intended,” said Gina Cassidy, a Clean Energy Community Coordinator for Cornell Cooperative Extension. “[…] They don’t have to just accept whatever comes along. They can negotiate for better conditions, or conditions that are more in line with their values.”
In the case of Ithaca, the CCA that is being explored would be crafted for the City to purchase 100% renewable electricity. Though, the transmission infrastructure that would bring the electricity to people’s homes is owned by NYSEG, so the utility company would still have a transmission fee expressed in people’s electric bills.
“So a lot of the Ithaca Green New Deal relies on people doing something like getting heat pumps, which is a really pretty sizable lift, or getting an [electric vehicle] or something like that.” said said Guillermo Metz, the Energy and Climate Change Team Leader for Cornell Cooperative Extension. “This is one where people don’t have to do anything, essentially.”
While the concept of a CCA is fairly straightforward, and much of the work is out of the hands of regular people, for a municipality to enter into a CCA a complex legal structure needs to be formed between a municipality and the PSC.
As a part of this agreement, CCA needs to file annual reports with the PSC, similar to utility providers like NYSEG, but not nearly to the same degree of detail. Such annual reports would include complaints customers filed with the CCA; number of customers served; number of customers opting out in a given year among other requirements.
A data protection plan for the customers in a CCA also needs to be developed, as well as a business plan, which will entail financial modeling.
Ithaca’s Director of Sustainability Luis Aguirre-Torres said that while templates have been developed for CCA by state agencies, and there is plenty of guidance, “the devil is in the details” when it comes to. “To guarantee this reliability replaces the current supplier of electricity — there are a lot of elements that come into play.”
The work of filing reports with the PSC, purchasing power on the open market, and ensuring customer data protection comes down to a role titled “CCA Administrator.” This is a position which can either be an employee of a municipality or outsourced to third party.
Companies and organizations have developed around servicing municipalities with CCA Administrators. Aguirre-Torres said that there are four such companies that he is aware of that can perform the role of CCA Administrator. Payments for third party CCA Administrators are often built into CCA agreements.
However, the City of Ithaca is far from structuring an agreement with a company or organization, or considering how to fill the role of an administrator for a CCA.
Where things are at
At the moment, the City of Ithaca has only passed a resolution to pay for an implementation study of a CCA, which passed unanimously at Common Council’s May 4 meeting. The City’s 2022 budget included $100,000 to pay for the study which will be done by Local Power LLC.
The City of Ithaca has been working with Local Power LLC since Sept. 2021 exploring a CCA program with some initial funding from the Park Foundation. Local Power LLC is also a company that specializes in filling the role of CCA Administrator. Paul Fenn, the owner, founder, and president of Local Power LLC, and who is considered the “grandfather” of CCA, appeared as a speaker in the IGND’s 1000 Conversation Series in Dec. 2021. The Town of Ithaca has also been involved in exploring a CCA as well.
Funding the implementation study doesn’t commit Ithaca to a CCA. Once it is completed, the City of Ithaca will be able to issue a request for proposals (RFP) in order to look at different organizations that specialize in performing the role of CCA Administrator for municipalities. In this instance, the City of Ithaca would be able to review these submissions to see if these organizations can fit its needs.
At the moment, the costs of implementing a CCA in Ithaca are unknown. In addition to the work that a CCA Administrator would do, there would be a workload associated with the City’s Planning Department, Comptroller’s Office, and the City Clerk’s Office, but a clearer idea of the demands on these departments and the associated costs will come with the completion of the implementation study.
The implementation study is supposed to be complete by September or October. Aguirre-Torres said on Common Council’s May 4 meeting that the parameters for the implementation study that Local Power LLC will be following — on top of prioritizing renewable power — are: avoid adding any long term burdens to staff at City Hall; make sure that costs are recoverable through CCA; that CCA can actually produce savings for the community.
As the implementation study moves along, Aguirre-Torres said that there will be updates delivered to Common Council.