BPA finds successful partnership with new Californian power providers

Over the last two decades, California has witnessed a transformative approach to communities managing their own energy futures. Known as community choice aggregators, or CCAs, these pioneering entities are a valuable and growing customer base for surplus power sales from BPA's Bulk Marketing team.

BPA's 2018-2023 Strategic Plan identified CCAs as a potential new revenue source. Since then, the Bulk Marketing team has built relationships with these community power providers, which are popping up in areas that previously weren't buying significant amounts of power from BPA. BPA has provided over $165 million of clean energy and other products to seven CCAs.

“We've built very successful partnerships with CCAs, and they continue to be excellent trading counterparties," said Mark Miller, BPA account executive to California CCAs.

California, as one of ten states with a CCA program, allows local governments to procure power on behalf of customers within the service area of an investor-owned utility. By forming a CCA, communities have greater control over the type and cost of the energy they consume, while the IOU continues to provide distribution, billing and customer service.

Because clean energy is in high demand among CCAs, BPA can sell its high-value products to these buyers at a premium price. This energy comes from surplus energy not needed by BPA's Northwest preference customers, primarily public utilities, who have priority access to power sold from the Federal Columbia River Power System. BPA seeks to maximize surplus revenue by transacting with any counterparty who is willing to pay premium prices for specialty products, and CCAs have a particular need for these products.

Higher surplus revenue from CCA customers translate to lower power rates for preference customers. The preference power rate is partly dependent upon how well Bulk Marketing is able to sell surplus power in the Western wholesale market. 

“Looking ahead, BPA will continue to seek market opportunities with CCAs and other entities to maximize the value of the Federal Columbia River Power System for the benefit of Northwest ratepayers," said Eric Federovitch, manager of Long-Term Sales and Purchases in Bulk Marketing.

Californian CCAs collectively account for nearly a third of the load from within IOU service territories. It's estimated that approximately 14 million Californians receive their power from these local, not-for-profit organizations.

The CCA concept gained legislative traction in 2002 (after the 2000-2001 energy crisis) with the passage of Assembly Bill 117. The bill empowered communities to pool their electric loads together, allowing them to collectively procure clean energy and spearhead local renewable projects and programs.

The reason for establishing a CCA varies depending on the goals of the city or county. According to California Community Choice Association, which represents the interests of CCAs, customers receive greater control of the energy consumed, the development of new renewable projects, revenues reinvested back into the community, and greater accountability by the new utility.

CCAs have many of the same compliance obligations as a traditional public power utility, including following renewable portfolio standards, developing integrated resource plans and procuring sufficient resource adequacy. When a new CCA forms, consumers within the CCA's service area are automatically enrolled as a customer unless they opt out. If a customer opts out of CCA service, the IOU will continue to serve the customer's energy needs directly.