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California CCAs see power purchases continue to slump in Q1 due to pandemic

Highlights

Clean Power Alliance largest buyer despite 48% drop

Shell tops CCA power sellers at 2.85 million MWh

Share of Cal-ISO wholesale market at about 15%

Twenty-five California community choice aggregators bought 13 million MWh of power in the first quarter, a 20.7% year-on-year drop in large part because of continued coronavirus pandemic impacts.

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The amount of power the CCAs purchased in Q1 was down 14.7% from the prior quarter and was the lowest amount bought since Q1 2019, according to government filings by power sellers that S&P Global compiled.

During Q1 2021, it is estimated that CCA power purchases accounted for about 15% of the California Independent System Operator wholesale market and about 30% of the wholesale bilateral market, according to the data.

"To date, CCAs have contracted for more than 6,000 MW of new clean generation capacity through long-term power purchase agreements with terms of 10 years or more," the CCA association, CalCCA, says on its website.

CCA purchases

The biggest power buyer among the CCAs — the Clean Power Alliance — saw its power purchases drop 48.1% year on year. The Los Angeles-based CCA, formed in 2017, bought 2.904 million MWh of power in Q1 2021 from 5.597 million MWh in Q1 2020. Clean Power's purchases totaled 2.113 million MWh in Q1 2019.

Central Coast Community Energy — formerly known as Monterey Bay Community Power — was the second-largest buyer in Q1, buying 2.074 million MWh, up 17.8% from Q1 2020.

The third-ranked CCA in terms of power purchased in the quarter was East Bay Community Energy, which acquired 1.322 million MWh, a 30.5% year-on-year decline, according to the data. East Bay, launched in 2018, serves about 550,000 customers in and around Oakland.

Sellers to CCAs

The biggest power seller to the CCAs — Shell Energy North America — saw its sales increase 27.1% to 2.85 million MWh from 2.242 million MWh in Q1 2020.

Morgan Stanley Capital Group moved to second in Q1 2021, selling 2.701 million MWh, up 6.2% from Q1 2020.

The Energy Authority, which was the top seller in Q4 2020, dropped to third with 2.7 million MWh, down 57.9% year on year. Likewise, Exelon Generation's sales to CCAs decreased 45.9% year on year to 1.571 million MWh for Q1 2021, as NextEra Energy Marketing's Q1 CCA sales totaled 793,844 MWh, a 31% drop from Q1 2020.

CCA background

Western Community Energy filed for Chapter 9 bankruptcy in May and CalCCA said it is closely monitoring the situation. According to CalCCA, there are now 23 community choice energy providers serving more than 11 million customers throughout California.

CCAs reached a new milestone in California April 1, surpassing serving 200 cities and communities and representing about 28% of utility load, according to CalCCA. Since then, Clean Energy Alliance and San Diego Community Power started CCA service in May and April, respectively.

Assembly Bill 117 was passed in 2002 to establish Community Choice Aggregation, which offers an opportunity for communities to join together to offer Californians a choice of their electric provider and the source of their electricity, according to CalCCA.

California, which leads the nation in installed solar capacity at 13.23 GW and also leads in battery energy capacity at 876 MW, has one of the more aggressive clean-energy goals at 100% carbon-free power by 2045 with a near-term goal of 44% renewables by 2024.

CCAs are required to comply with Renewable Portfolio Standards as well as the California Public Utilities Commission's integrated resource planning process so they will contribute to reducing the carbon intensity of power generation over time.