Cherry Hill voters will decide next November whether or not to participate in a Community Choice Aggregation (CCA) energy program, after the town council voted recently to put the issue before voters.
Cherry Hill is one of more than a dozen communities in NJ (one of the few states where CCA programs are allowed) to consider or adopt such communal energy plans. If Cherry Hill, and others, adopt CCA programs, it could lead to rapid investment in renewable energy across the state.
Simply put, CCA programs allow residents in certain jurisdictions to aggregate their buying power. Local entities, usually municipal governments, are allowed to procure power on behalf of all those in the CCA from whatever source they deem fit, all while using the current energy provider’s infrastructure. This, of course, differs from the traditional model, where individual households “choose” their energy provider and, alone, don’t have much say over what the energy provider has in their portfolio or what the rates are. By bringing all those households together, the CCA has more leverage on where to get their energy and what their provider has in their energy portfolio.
Ratepayers in a jurisdiction are automatically opted in, with the option to opt out, meaning on day one, there’s enough people in the CCA to begin negotiating for better prices and provide enough of a base for alternative energy companies.
Too, CCAs give individuals the power (if they choose) to force investor-owned utilities to include more renewable energy in their portfolios.
CCAs are a growing trend across the country. Recognizing that investor-owned utilities have fiduciary responsibilities to their shareholders that might discourage them from exploring renewable energy, CCA supporters claim the programs can force utilities to diversify their energy portfolios into renewables, reduce costs to ratepayers in many instances, and, if not previously allowed, let homeowners create renewable microgrids that unburdens them from the broader energy infrastructure.
“Community choice energy programs not only lower harmful climate emissions and air pollution, they also serve to invigorate local democracy,” says Food & Water Watch organizer Jocelyn Sawyer. “The residents of Cherry Hill have enthusiastically supported this clean energy campaign throughout, and we expect to see them continue to build this movement for a cleaner, safer future.”
Food & Water Watch has been on the forefront of the effort to institute a CCA in Cherry Hill. The group has already worked to institute programs in Edison, New Brunswick, Collingswood, Asbury Park, Piscataway, East Brunswick, South Brunswick and Red Bank. Cherry Hill residents circulated a petition this summer that garnered enough signatures to warrant discussion by the town council.
But because CCAs challenge the de-facto legal monopoly many investor-owned utilities have, they’re only allowed in a handful of states at the moment. States must first pass legislation to allow CCAs before local jurisdictions can choose to opt in.
New Jersey first passed legislation to allow CCAs in 2003, but it wasn’t until a decade later that Bergen and Passaic counties, and over a dozen municipalities throughout the state, began forming them. New York and California have mature CCA programs in their states, and can be a model to NJ as more CCAs are enacted.
CCAs can be a powerful tool in the fight against climate change by democratizing energy choices and having a strong, unified voice in what types of energy people will pay for—and how much they’ll pay for it.
But as Boston University researcher Alicia Zhang recently pointed out, a few things should be kept in mind to ensure the programs retain their benefits: CCAs must reach out to their communities to ensure residents know their options; local renewable energy projects should be funded and incentivized to diversify energy options; and the more CCAs in a state that band together to form a greater coalition, the more influence on the energy system they’re likely to have.
Yet, the CCA hasn’t passed in Cherry Hill, and voters may get spooked by industry claims of unreliable energy and rates under a CCA. Too, they may worry about adding a bureaucratic layer to something as fundamental as heating their homes. What happens in Cherry Hill before the election next year will be telling for the future of CCAs in New Jersey.