Community Choice Aggregation (CCA) is a program in New York that empowers eligible municipalities’ entities such as villages, cities, and towns to create large buying groups of residential and small commercial electricity and natural gas accounts in order to seek bids for cheaper supply rates, essentially bulk-purchasing. CCA programs got their start with the Community Choice Aggregation order passed by the New York State Public Service Commission on April 20, 2016. The purpose of the CCA Order was to ensure that the benefits of energy deregulation were passed onto residential customers and small businesses by providing the ability to “aggregate” their accounts within their municipal boundaries in order to obtain competitive bids from Energy Suppliers (“ESCO”). Grouping residential accounts together create economies of scale, enabling participating municipalities to achieve greater savings for account holders as a whole, in contrast to what could normally have been achieved by the individual customer. More importantly, the CCA construct provides a substantial positive opportunity for meaningful and effective local and community engagement on critical energy issues and the development of initiative programs, products, and services that promote and advance the achievement of the state’s energy goals. CCA programs can educate, encourage, and empower communities and individuals to take control of their energy future through engagement with existing REV and CEF opportunities and development of new DER and clean energy programs.
The key benefit of CCA is the opportunity for residents to save money on their electric and/or natural gas bills. This is based on market conditions and the utility region in which one resides.
First, the municipality voted on and passed a local law authorizing a Community Choice Aggregation program. The municipality then sought bids from ESCOs to obtain competitive electricity rates for participants. A resident is able to opt out of the CCA program without penalty, in most cases, if they so choose.
The impact of Community Choice Aggregation is primarily savings. Participants will see no change in their delivery rate, but a reduction in their supply rate. They will continue to receive a single bill, make one payment, and continue to receive all other services from their utility.
If a customer is already purchasing their power or natural gas from an ESCO, they are initially ineligible to take advantage of the Community Choice Aggregation rate. However, a resident can opt into the CCA program and receive a price reduction, though early termination of a contract with their existing ESCO may result in early termination fees. Be sure to check the terms and conditions of your existing ESCO contract.
Each part of the Community Choice Aggregation program has its own timetable. Due to time requirements for task completion as specified by PSC order, several months are required to faithfully complete all stages in the CCA process. This program starts in July 2019 for electricity and December 2020 for natural gas, depending on monthly meter reads.
If you are currently being served by your local utility, you do not need to do anything. You will automatically be included in the program unless you opt out (see next question).
No, residents can opt out during a 30-day opt-out period. Opt-out notices are provided via USPS mail prior to the program commencing. Simply return the opt-out notice within 30 days and your account(s) will not be included. Participating account holders may leave the program at any time and without penalty. There are different ways that you can opt out of the program. One way is to mail the opt-out card back to the supplier. Another way is to call or email the supplier and indicate that you want to opt out. Opting out can also be done through the program website.
Your utility bill has two cost components – delivery and supply. A CCA program only changes the supply component of your bill. In the final analysis, approximately 50% to 65% of the utility bill will be impacted. The delivery portion of your bill will not be affected. Your energy bill has two cost components – delivery and supply. The aggregation program only changes the supply component on your bill. The delivery portion of your bill is regulated and will not be affected.
Participants will receive their utility bills with newly negotiated lower rates beginning approximately 90 days after they receive the opt-out notice. Initial enrollment usually takes place 60 days after a municipality elects an ESCO and signs an energy agreement. Remember, once service actually begins under the program, you won’t see any changes on your utility bill until the following month for the previous month’s services.
Yes, you can continue to participate in your utility’s budget billing/equal payment plan under CCA.
Yes, the order allows for the aggregation of both electricity and natural gas accounts. The electricity portion of the program began in July 2019, while the natural gas portion begins in December 2020.
Residents who are enrolled in the program may terminate their participation at any time without early termination or exit fees.
Each residential customer will receive written notification after the bid informing them of the winning supplier price, estimated savings as compared to the local utility, and the account holder’s right to opt out. In addition, after the 30-day opt-out period has ended, each resident will receive a letter from their utility confirming enrollment and that supply service will soon be switched to the winning supplier.
Yes, the CCA Framework order only defines service classes eligible for opt-out enrollment. SC1 and SC2 rate classes are eligible for opt-out.
The secured rate in the CCA program will remain fixed for 17 months for electricity (ending December 2020) and 23 months for natural gas (ending October 2022). During this period, the rate will NOT change. No variable or teaser rates were included in the bid specifications.
Only ESCOs who have met the requirements of the uniform business practice (UBP) and are licensed by NYS PSC, as well as having met the CCA Administrator Good Energy requirements are eligible to bid. In addition, an in-depth request for proposal is disseminated by Good Energy to interested ESCOs requiring them to provide their qualifications. Among other things, the request requires suppliers to demonstrate financial strength, experience, as well as customer service capabilities.
No, by law, utilities are not permitted to bid. With regard to supply, the utility only provides default service; they are not an ESCO. The utility will always be responsible for delivering your energy.
The contract term will be 17 months for electricity and 23 months for natural gas. The final terms were based on the most favorable prices and were selected by the municipality’s governing body.
No, there is no contract to sign. The program is designed to be as easy as possible for participants.
Yes, you can opt back into the program at any time and you will see the change to your bill after one billing cycle. One billing cycle, or 30 days, will elapse to allow for processing of the account(s) by the supplier.
Once the program is underway, details about how to opt into the program will be posted on the municipality’s website. In general, however, it will always be expedient to contact the selected supplier directly.
Having a solar system which allows you to earn net metering credits, e.g., Solarize (New York), does not preclude you from participating in the aggregation program. As long as the account holder is receiving supply from the utility, they are able to participate in the aggregation program and will continue to receive new metering credits from the utility. Net metering will function in the same way as before you joined the CCA program. Your net metering credits will continue to appear on your utility bill and will continue to be calculated based on utility’s Basic Service price.
Service and billing questions will continue to be directed to your local utility. Utility contact information can be found on your bill. Questions regarding CCA ESCO billing portions can be answered by the CCA customer service. In most cases, the utility will direct you to contact ESCO for questions about ESCO charges.
No, the delivery of your electricity and natural gas is always the responsibility of the utility. As a result of energy deregulation in 1999 in New York, utilities are only able to collect revenue from delivering the power or natural gas to your meter, not from the actual supply.
Accounts receiving supply from an ESCO are initially excluded from the program. Those account holders will not receive an opt-out notice. However, consumers who are currently in contract with an ESCO and may want to terminate their contract early, or for those considering switching to an ESCO before a Community Choice Aggregation program is available, should review, at a minimum, the following language in the ESCO offer/contract:
- Price/kWh or therm
- Contract length – many ESCOs require a minimum one year contract, while only offering a fixed price for the first six months. It is important to determine what happens to the offer rate at the end of the first six months. Some ESCOs do not define this in their offers.
- Depending on the contract term, a customer may be prevented from getting the aggregation rate until the contract ends.
- Early termination fees
- Pricing terms which take effect at the end of the agreed-upon fixed rate (as mentioned above in #2 and/or at the end of the term), etc.
- One bill or two? Under the CCA program, participants will still receive only one monthly bill and make only one payment to their respective utility. Some ESCOs do not have this provision, meaning customers may receive their regular bill from their respective utility and a separate bill from the ESCO.
No, the municipality earns no fees.
The municipality will not have any administrative function other than to review and ensure that all accounts within municipal boundaries are given the opportunity to participate. The CCA Administrator will be responsible for managing the program and keeping the municipality appropriately informed.
Public meetings and information sessions will take place in your area or virtually. Please check for announcements from your municipality and local news outlets. The municipal website may feature all materials related to the CCA program as they become available.
Good Energy, LP is a New York-based energy management and consulting firm that has been running large and small Community Choice Aggregation programs in various states across the country for nearly a decade. Good Energy has been in existence since 2000, and has partnered with municipalities to design and operate CCA programs. Good Energy is headquartered in New York City and is currently the retained CCA consultant for close to 300 CCA communities across the US.