The Orange County Power Authority (OCPA) will stop providing power to residents and businesses in Huntington Beach after a split vote on May 16, where city councilors voted 4–3 to leave the embattled green energy agency.
Huntington Beach’s actions follow another withdrawal from the agency by the Orange County Board of Supervisors in December.
The city’s newly elected conservative majority voted in favor of exiting while councilors Dan Kalmick, Natalie Moser, and Rhonda Bolton voted to remain.
Kalmick echoed some residents’ comments, that a special meeting held at the close of the city’s regular council meeting on Tuesday to discuss the issue didn’t provide enough time to gauge potential impacts of the withdrawal.
“This is absolutely irresponsible,” he said.
Councilman Casey McKeon, who is also on OCPA’s board and agendized the issue, said the final straw for him was after the agency rejected his request to view details of power purchase agreements showing how much energy the OCPA has purchased for Huntington Beach ratepayers, and whether it’s from renewable sources.
Cost of Withdrawal Still Unclear
According to McKeon, he sought the information to see how much it would cost to leave the agency.“When I first became a board member, I asked to see the power purchase contracts that were purchased on behalf of Huntington Beach so that we could ascertain whether or not we could sell the contracts for higher than we purchased to protect our ratepayers,” McKeon said.
With the city’s exit, any excess energy the agency purchased on behalf of Huntington Beach would need to be sold, according to McKeon.
He said the agency requested Huntington Beach sign a non-disclosure agreement to view the contracts.
“A simple non-disclosure agreement became a four-month pulling teeth process, until we finally received the contracts a couple of weeks ago,” he said.
But the contracts only revealed from whom the OCPA—which buys energy from third parties and sells it to its municipal customers—purchased its energy. They didn’t show the cost of the energy or whether the agency was purchasing the amount of renewable energy it had promised to provide.
To see that information, McKeon requested the OCPA provide statements from California’s Independent System Operator, which oversees that state’s electric power operations, but they denied him access.
“This would essentially show us the mix of energy we were purchasing and delivering to customers and at what rates, since OCPA was claiming they were delivering 100 percent renewable energy,” he said. “We were denied this request, even under the [signed non-disclosure agreement] and public records request and as a founding city.”
The OCPA did not respond to a request for comment on why the information wasn’t shared.
The power authority—which now only services the remaining member cities of Buena Park, Irvine, and Fullerton—was formed in 2020 as a “green” alternative to Southern California Edison (SCE).
It offers three plans: basic choice at 38 percent renewable energy, smart choice at 69 percent, and 100 percent renewable energy, the most expensive.
Kalmick argued that his council colleagues shouldn’t rush things considering there’s no way to gauge the exit fee.
“We have no idea what this is going to cost,” he said during the meeting.
He said exiting without a plan could put “our ratepayers and therefore our residents and taxpayers on the hook for an enormous amount of money.”
He also argued the agency has proactively implemented new business practices requested on the behalf of the three audits it faced.
Controversies
Since its inception in November 2020, the OCPA has been criticized for a lack of transparency and inexperienced management.Following the audits, the OCPA has implemented most recommendations including recently firing their CEO Brian Probolsky, whose last day is May 31.
The California State Auditor released findings that Probolsky improperly executed agreements worth $1.8 million to marketing and financial services, while skirting required board procedures in the process.
Joe Mosca, the OCPA’s director of communications, will temporarily replace him, until a permanent new CEO is hired, after a vote by the agency’s board earlier this month.
Mayor Tony Strickland said during the meeting his concerns with the OCPA are over state-mandated requirements it has at least 65 percent of energy purchased in long-term contracts come from renewable sources, but filings with California’s Public Utilities Commission show it only had 61 percent, Strickland said.
“A lot of people will talk about the clean energy, the green energy. Just because you say it doesn’t make it true,” he said. “OCPA doesn’t even meet the minimum standard … this has indeed been a disaster since the very beginning.”
OCPA was also issued a fine of $2 million in April 2022 for not having a certain amount of backup energy, needed for hot summer months when blackouts are more likely.
According to McKeon, a consultant for the OCPA told him there wasn’t enough energy available for purchase in Southern California, which is why OCPA didn’t stock up.
McKeon said Southern California Edison’s larger market share and ability to purchase long-term contracts makes them a better option to avoid the possibility of blackouts.
“Edison’s market share and ability to purchase longer-term contracts, allows them to procure resource adequacy to protect the grid, and is therefore a safer option for our residents,” he said. “I advise a flight to safety back to Southern California Edison as a purchasing power … that can provide resource adequacy so that our grid is not jeopardized.”
Supporters
Proponents of the OCPA reminded councilors during the meeting that SCE currently doesn’t offer “green rate” plans, so leaving the agency would take away residents’ option to purchase renewable energy.“Some of the benefits of the Orange County Power Authority is they offer 100 percent renewable energy for everybody, not just a few,” a Huntington Beach resident said during public comments.
Another resident echoed the same concerns.
“Without OCPA, residents and businesses will have no way to choose 100 percent clean energy,” said Linda Kraemer, the chapter chair of Climate Reality Orange County, a climate change and sustainability advocacy group.
Fred Jung, OCPA Chair and Mayor of Fullerton said in a statement on May 17 Huntington Beach’s actions were “reckless,” and disappointing.
“Not only does this eliminate the opportunity for Huntington Beach to take bold steps against climate change, it strips away renewable energy choice from its residents and businesses,” he wrote.
He further argued that the OCPA offers cleaner energy at cheaper rates than SCE.
“SCE plans to increase electricity rates another 45% by 2030. By choosing to stay with OCPA, Huntington Beach businesses and residents have the ability to select OCPA’s Basic Choice renewable energy plan, which costs 2% less than SCE and offers more renewable energy,” Jung wrote.
During OCPA’s board meeting the day after the Huntington Beach vote, several public speakers argued the city’s decision was unfortunate, criticizing the withdrawal.
The city of Fullerton, during a city council meeting also on May 16, discussed withdrawing from the power agency, directing staff to seek information on the costs to withdraw from the agency.
