CCA Green Bonds

Energy affordability is a major concern for California residents.  As local, not-for-profit energy providers, CCAs are dedicated to finding every avenue possible to reduce their customers’ bills. Green bond prepayment transactions are one of the newer tools CCAs are using to achieve significant savings for customers. In 2021, five CCAs — Central Coast Community Energy, Clean Power Alliance, Ava Community Energy, MCE, and Silicon Valley Clean Energy — formed the California Community Choice Financing Authority (CCCFA) to help reduce the amount they pay and charge customers for renewable energy. CCCFA is a conduit issuer of bonds that can secure lower energy contract prices through the use of a special legal framework that applies to public or tax-exempt entities, including CCAs.

Energy Affordability

It’s no secret that California’s electricity bills are sky high. What’s not so well known, however, is that ballooning investor-owned utility (IOU) transmission and distribution (T&D) expenditures are the main driver of dramatic bill increases shouldered by California ratepayers in recent years. From 2017-2022, the average T&D rates for California’s three main IOUs doubled, from 7.5 cents per kilowatt hour to almost 15 cents per kilowatt hour, according to the Energy Information Administration. As electricity rates continue to skyrocket, more and more lower-income households must choose between paying their electricity bills or paying for food, medicine, rent, and other essentials.

Resource Adequacy

California’s resource adequacy (RA) program is a critical tool to ensure load-serving entities (LSEs) procure the resources that are needed to keep the lights on. A shortfall of RA supply in California has created challenges for LSEs including Community Choice Aggregators (CCAs), resulting in increasing penalties. CalCCA believes the California Public Utilities Commission (CPUC) needs to take immediate action to address this persistent energy market challenge, one that has been building and worsening for years. Ultimately it is ratepayers that are paying a high price for California’s ongoing RA supply problem. California’s RA shortage makes it difficult, if not impossible, for every LSE to meet its RA requirements. Specifically, the demand for RA in California exceeds the available supply, even after accounting for imports and expected additions of resources, as this recent stack analysis notes: California’s Constrained RA Market: Ratepayers Left Standing in a Game of Musical Chairs.