Community Choice Energy for Montgomery County

A Montgomery County Community Choice Energy Pilot Program was enacted in 2021. The state law allows the County to become a “community choice aggregator” (CCA); which essentially will create an electricity “buying club” on behalf of residential and small commercial customers in the County.

Community Choice Aggregation is an efficient, equitable and cost effective way to provide competitive electricity pricing with more renewable content to a large number of electricity consumers.

The intent of the Montgomery County pilot CCA is to offer electricity which includes more renewable energy at a price comparable or better than the standard offer service rates available from utilities, which includes more renewable energy. Electric customers who choose not to opt-out of the program will automatically be signed up, but they can change at any time and get electricity from a utility or retail supplier. The CCA only applies to the “generation” portion of a utility bill (i.e., kilowatt hours of electricity used) and not fixed charges for transmission and distribution.

What’s Happening Now?
The Maryland Public Service Commission adopted regulations for the CCA program in January 2024. Now the County Council has passed a local bill allowing implementation of a CCA pilot (see Council staff report here). Next the County will develop an “aggregation plan” or business plan for how the CCA will work – both of which must be approved by the Public Service Commission.

What is in an Aggregation Plan?
The Montgomery County Aggregation Plan will include a lot of detail on how the CCA will operate and interact with the utilities. Some of the issues that will be addressed in the Aggregation Plan include:

where it will operate, since there are three electric utilities serving different parts of the County (BGE, Pepco, and Potomac Edison);
how residential and small commercial customers will be notified, given a chance to opt-out, and be enrolled in the CCA program;
the schedule for notifying and transitioning customers, including how the County will coordinate with the utilities on customer transition;
the structure within County government for operating the CCA;
how electricity will be procured by the County to save customers money and the type of rate or rates that will be offered;
the amount of renewable energy content; and
how customers can leave the CCA should they choose once they have started with the program.

Montgomery County is served by three electric utilities:

Pepco (around 300,000 customers)
Potomac Edison (around 35,000 customers)
BGE (around 14,000 customers)

Do Other States Have CCAs?

Ten states have laws to allow CCA programs, including Maryland, and eight states have active programs, according to LEAN Energy USA (Local Energy Aggregation Network), a national non-profit organization dedicated to supporting electric consumers and accelerating the transition to clean and renewable power (https://www.leanenergyus.org/about).

LEAN Energy’s June 2023 Community Choice Aggregation study revealed that having a CCA is an efficient, equitable, and cost-effective policy tool for providing competitive pricing and renewable power to a large number of electric consumers. Specifically, the study highlighted that CCAs increased the amount of renewable energy on the grid; lowered greenhouse gas emissions; on average offered lower and more stable electricity rates than utilities; and provided greater consumer protection.

When will the CCA start?
Once the Montgomery County DEP completes a draft Aggregation Plan, residential and small commercial electric customers will receive a 60-day notice of the aggregation plan, which will be available on the County's website. The “final” Aggregation Plan must be submitted to the Public Service Commission for approval, after which the County can begin procuring electricity for eligible customers. The County expects to buy electricity over a 2-year period, similar to utilities, in order to get the best price. Once the CCA rates are known, the County will send customers a 30-day opt-out notice, after which it will transition customers who have not opted-out to the CCA.

Download Climate Coalition Montgomery County "Community Choice Energy" brochure here.