By Ryder Todd Smith.
Community Choice Aggregation (CCA) is all the rage in LA County cities these days. Likely inspired by the County’s launch of a CCA Joint Powers Authority (Los Angeles Community Choice Energy) program and a string of presentations, LA County cities have been actively evaluating CCA. This interest is great news for the cities and consumers, but cities also owe it to their financial futures and future city councils to vet the options that exist for CCA implementation.
CCA has become a competitive space with choices abounding. As of today, there are four options for cities to consider in LA County if they commit to implementing CCA:
1 – Go with LA County – A regional CCA program initiated by Los Angeles County, Los Angeles Community Choice Energy is governed as a Joint Powers Authority in which every member government receives an equal seat on the board, but key measures can be vetoed by a proportionally representative vote (bigger cities get more power to veto actions). The model can reduce some risk for members, but also reduces local control for the city and custom branding options. This JPA is still in the formation stages.
2 – Join the California Choice Energy Authority – A Joint Powers Authority founded by the Cities of Lancaster and San Jacinto. CCEA provides a hybrid CCA model that offers more autonomy for city members while dealing with regulatory and administrative overhead and maintaining local control. The JPA has been formed for over a year – Lancaster, Pico Rivera and San Jacinto already are members. (Disclosure note: CCEA is a client of Tripepi Smith)
3 – Join the South Bay Energy Coalition – Residents of South Bay cities initiated South Bay Clean Power to encourage city councils and staff to implement a CCA program in the South Bay area. South Bay Clean Power currently has a draft Joint Powers Authority agreement and business plan that cities may review.
4 – Go independent. Cities do not have to join any group. A city could simply form its own CCA, execute its own feasibility study and implementation plan and handle all the operational and regulatory work going forward. This provides the greatest independence and local control but does come with ongoing increased costs and risk.
As city staff work to analyze options and provide recommendations on this complicated subject to the city manager and council, they should ensure they have done their due diligence on all these options. Moving to CCA is a long term decision for a community. The pathway forward on CCA should not be taken lightly and should not be a choice of near term convenience. If a city has not fully evaluated all these options, it has limited its choices at the very moment it is trying to create choice for its residents.
To make it easier to digest, here are three questions cities should answer before deciding on a route to CCA.
What are the trade offs with the governance models between the various CCA options and how much control do I want?
What do the pro forma financials look like under each model and how much city revenue is given up with the various options?
How deep is the experience of the team working on the CCA (whether internal staff or staff at the JPA partner)? Can this team get me to a compliant and successful implementation?
About the Author:
Ryder Todd Smith is president and co-founder of Tripepi Smith a marketing – communications – public affairs firm operating throughout California. He is a frequent speaker at local government conferences and a respected voice on local government policy matters and public agency communications. Tripepi Smith counts among its 70+ clients the California Choice Energy Authority.