Kroll Bond Rating Agency Releases New Report – A Better Way: The Emergence of CCA in California

Kroll Bond Rating Agency (KBRA) has continued to monitor the proliferation of Community Choice Aggregation (CCA) incorporations in California and believes that the burgeoning industry presents a compelling alternative to traditional utility generation services.

Key Takeaways:

  • KBRA believes that well-run CCAs with favorable characteristics in California can achieve strong investment-grade ratings through an asset-light and community-centric business model that provides clean, competitively priced power to residents.
  • As stakeholders increasingly prioritize environmental, social, and governance (ESG) considerations, CCAs in California are uniquely positioned to ride the coattails of this movement, helped by social dissatisfaction with traditional vertically integrated utilities.
  • KBRA sees a window of opportunity for CCAs in California, given the higher-cost electricity supply and legacy governance issues that burden existing utilities.
  • Although KBRA’s outlook for CCAs in California is positive, we do see some challenges ahead including regulatory rulings regarding the calculation of the Power Charge Indifference Adjustment (PCIA), and the ability of CCAs to continue to offer discounted electricity to customers compared to traditional vertically integrated utilities.

To view the report, click here.