New Proposal Could Save Californians Millions on Electricity Bills — Without Compromising Reliability

New Proposal Could Save Californians Millions on Electricity Bills — Without Compromising Reliability

SACRAMENTO, CA — A new analysis from the California Community Choice Association (CalCCA) reveals a powerful way to lower electricity costs for millions of Californians — and it’s as simple as letting energy providers trade power “by the hour.”

Right now, electricity providers have to buy capacity from power plants every hour they generate in a month, rather than just the hours when the power is needed. It’s like having to buy a crate of oranges when you only need a few slices. That unnecessarily restrictive system is driving up prices — and the extra costs land on California’s families and businesses.

CalCCA’s new analysis, “Effective Mechanisms for Slice-of-Day RA Trading,” shows that letting energy providers trade hourly resource adequacy (RA) obligations — just like they’re required to report them — could save Californians over $180 million in a single year. That’s real money back in people’s pockets.

“This is about fairness and common sense,” said Beth Vaughan, Chief Executive Officer of CalCCA. “Let’s stop making energy providers buy more capacity than they need, and let’s stop making Californians foot the bill.”

California’s electricity system is moving to a new model where power needs are tracked every hour of the day — because peak demand doesn’t last all day long and power output can vary with the weather. But under the current rules, providers still have to pay for all of a power plant’s capacity instead of just what’s needed for a specific hour.

Here’s what CalCCA is proposing:

• Let providers trade hourly RA obligations so that if one has extra, they can help another who’s short
• Use the same tools already in place to track these trades
• Keep everyone accountable while giving them the flexibility to do it smarter

Early simulation testing shows that trading these “slices” of energy hour-by-hour could dramatically reduce the need to overbuy power-generating capacity. In fact, matching up just the over- and under-supplied hours across providers could avoid $105 million in unnecessary purchases for summer 2025 — and lower prices across the board.

The best part? Everyone wins. That’s why clean energy providers, community advocates, and environmental justice groups are lining up in support.

Californians are already doing their part to move toward a clean energy future. Now it’s time to make the system work smarter — and save everyone money along the way.

Directly download a PDF of CalCCA’s new analysis here.

###

About CalCCA
Launched in 2016, the California Community Choice Association (CalCCA) represents California’s community choice electricity providers before the state legislature and at regulatory agencies. There are 25 operational CCA programs in California serving more than 14 million customers—about one-third of the state’s population—in 200+ cities and counties throughout the state. For more information about CalCCA, visit www.cal-cca.org.