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If you think this all sounds like a contrivance to virtue signal environmental responsibility, you would be right. Whether electric utility customers are receiving renewable energy isn’t clear, but that’s what they signed up for (by default, in most cases). CCAs, in any case, can claim they provide their customers with the responsible kind of electrical energy and thereby help them save the planet.

https://mises.org/wire/can-electricity-providers-promise-100-percent-green-energy-probably-not

Jane L. Johnson

We expect the lights to come on when we flip a switch, unconcerned with how the electricity is produced or how it reaches our homes. We are aware of telephone poles, wires overhead, and transmission towers, solar panels, and windmills across the countryside. But as long as we pay our electric bills, we trust electric utilities to provide our power somehow.

Who produces the electricity we use? Where does it come from? How does it reach us when we flip that light switch? And is electricity as “green” as we are often told it is?

Residential and business electric customers across the country are served by three different types of energy providers: the traditional monopoly known as an investor-owned utility (IOU), the public power utility owned by a municipality, and the community choice aggregator (CCA). This last is a relatively new type of nonprofit purveyor allowed in nine states—Massachusetts, Ohio, California, Illinois, New Jersey, New York, Rhode Island, Virginia, and New Hampshire—that have passed legislation allowing them.

These entities form what is collectively referred to as the grid, an interconnected network for delivering electricity from producers to consumers.

Community Choice Aggregators

CCAs are the newest type of electricity provider. They buy electricity from private generating firms, many of which are small start-ups, and deliver it to end users over wires owned by traditional IOUs. Thus, CCAs function as middlemen between energy suppliers and consumers. They also compete with investor-owned IOUs to sign up entire cities or counties.

Electricity can be generated by coal, natural gas, diesel, nuclear fission, biomass, hydropower, solar panels, and windmills. Of these, the last five may be considered renewable sources, but green energy purists view only solar and wind energy as renewable.

California contains over 11 percent of the American population, its energy markets are deregulated, and it hosts twenty-five CCAs, which serve fourteen million customers throughout the state in over two hundred municipalities with over eleven thousand clean energy power purchase agreements.

In addition to these twenty-five CCAs, California has three large IOUs: Pacific Gas and Electric, Southern California Edison, and San Diego Gas and Electric. Together, they own a significant share of the state’s energy distribution infrastructure (poles and wires). California also has one large municipality-owned utility, the Los Angeles Department of Water and Power, as well as several smaller public utilities throughout the state.

In 2002, the state legislature passed a bill (Assembly Bill 117) admitting CCAs, which began forming shortly afterward. CCAs promise to provide “green” energy (i.e., generated by solar or wind) to reduce carbon emissions and counteract climate change.

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