One year ago, when the nonprofit Orange County Power Authority started providing residents in four local cities with a climate-friendlier option to keep their lights on, state Sen. Dave Min opted to stick with electricity from Southern California Edison for his Irvine home.
Min is passionate about green energy, but he said he had too many concerns about the direction of the Power Authority at that time. Many of those concerns soon were spelled out publicly, in audits, investigations and news stories that prompted Orange County to part ways with the agency before service in unincorporated parts of the county even began.
But with new leadership at the helm and an improvement plan in place, the OCPA is showing progress in addressing many of the concerns about prices, transparency and sustainability that critics, including Min, raised during that first year.
For example, the basic energy plan now sold by the Power Authority costs 2% less than Edison’s typical rate, and more of that power comes from wind and other renewable sources. The agency also has implemented policies to increase oversight of its contracts and payments, and taken steps to keep the public better informed, with an updated website that touts that the Power Authority has received a stamp of approval on many of its changes from the state auditor.
The Power Authority also taken a step that seems in line with its core mission, helping to spur development of a new solar project in Riverside County, outside Temecula. Once built, it will boost the green energy supply for all Californians.
The changes have been so dramatic that Min said he’s now happy to join the nearly 115,000 households in Irvine (and more than 200,000 across the county) that buy their power through the OCPA.
“I am very confident at this point in saying I think OCPA is a well-run operation,” Min said. “They are providing significant reductions in carbon emissions while providing very cost-efficient energy.”
Nobody wants to be audited, said Joe Mosca, who’s been serving as interim chief executive for OCPA since the April firing of the Power Authority’s initial CEO, Brian Probolsky. But Mosca said the process also has been “extremely beneficial,” for both the OCPA and its customers.
“Our agency is more mature, more open, more transparent,” Mosca said.
The OCPA’s second year of working with the public will be the true test, and the jury is still out on one key question:
Will Orange County cities and residents buy what the Power Authority is selling?
Promising premise
The OCPA got its start in 2020, with financial support from Irvine and a big push from the local chapter of the Climate Action Campaign, as part of California’s community choice aggregation program.
The idea wasn’t new. Lawmakers approved community choice programs two decades ago to give local governments alternatives to investor-owned utilities, which some argue are too focused on profits and aren’t sourcing their electricity from renewables fast enough to meet clean energy goals. One-third of the power that Edison sells to its traditional customers currently comes from eligible renewable projects, such as solar and geothermal power, and the state’s goal is to reach 60% renewables by 2030 and 100% by 2045. “Green rate” programs — which allow Edison customers to pay more for electricity from greener sources — are small and have long been full, with waitlists in place.
So, instead of relying on utilities to make the green jumps, community choice programs let governments pool resources to support and develop more renewable projects. The traditional utility still delivers the power and maintains the grid, but the locally-controlled nonprofit secures the supply and can set its own targets for prices, the amounts of renewable energy it sells and more. And revenues from the sale of that energy come back to cities or counties that have joined the nonprofit.
That formula has worked. There are 25 community choice aggregration agencies selling power to some 14 million residents and businesses in more than 200 cities throughout California. And OCPA is one of the largest.
The agency offers three tiers of plans for customers, with costs — and levels of renewable energy — escalating in each tier.
The basic plan sold by OCPA is 2% cheaper than Edison’s regular rate, or $1.68 less a month on the average bill. And at least 38% of OCPA’s basic plan energy is from renewable sources, which is 5% greener than Edison’s regular plan.
A second OCPA tier, which touts 69% renewable energy, costs an average of $4.01 a month more than Edison’s regular rate. And the greenest OCPA tier — zero-emission energy powered 100% from renewables — costs an average of $6.85 more a month.
When a city or county opts to join a community choice plan, they choose which tier becomes the default for all of its residents. Each customer then can choose a higher or lower tier, or opt out altogether and stick with traditional utility-provided power.
Buena Park, Huntington Beach and Irvine signed their residents on for the 100% renewable plan, while Fullerton opted to make the 69% plan its default. In April 2022, OCPA flipped the switch for some 31,000 commercial customers in those cities, and in October 2022 it began selling energy to roughly 200,000 residential customers. And, so far, agency data shows most residents are sticking with OCPA, and staying in the tier chosen by their city.
With just those four cities on board to buy cleaner energy, Ayn Craciun, local policy director for the Climate Action Campaign, said her team calculated it would cut as much greenhouse gas from the atmosphere each year as adding a carbon-sinking forest that’s more than twice as large as Yosemite.
But even before cleaner power started flowing to local cities, Craciun said her group and others started to see some red flags.
Concerns mounted
In its early days, Craciun said, the OCPA hadn’t instituted bylaws common in other community choice programs. It wasn’t doing a good job at publicizing meetings or checking registries to show where agency money was going. And she said there were lots of concerns with the qualifications and practices of then-CEO Probolsky.
All of these red flags and more were documented in county investigations and audits by the Orange County Grand Jury and California State Auditor. That led leaders such as Min to call for Probolsky’s resignation.
In December, those concerns prompted a split Board of Supervisors to vote to pull out of a contract with the OCPA to supply power for 130,000 residents and businesses in unincorporated parts of Orange County.
Then, in May, Huntington Beach became the first city to back away from the green power agency. The coastal city already moved all residents to OCPA’s 38% tier and expects to finish transitioning back to Edison by July.
Looking back, OCPA board chair Fred Jung, who’s also the mayor of Fullerton, said there was a bit of “blissful ignorance” when the agency first launched.
“When you’re starting an agency like this, you are so transfixed on the goal of just growing the agency and just doing the boring, mundane, detailed things,” Jung said. “These audits and these investigations, they’re really important to us because they highlight some of the deficiencies that we may have had and things that we overlooked.”
Jung and other OCPA supporters also blame politics for some of the fallout. He noted that when a conservative slate of four new council members was seated in Huntington Beach in December, one of the first issues they asked staff to look into was getting the city out of the community choice power program, which those members labeled a “disaster.”
“You have folks that are running on a platform that says ‘we’re gonna pull out of OCPA’ or ‘we’re gonna dismantle OCPA,’” Jung said. “And it feeds into a lot of this disinformation campaign and misinformation campaign that exists out there — not just for OCPA, but so many other things that involve our society now. It’s unfortunate, but that just seems to be the political reality we live in.”
Min, too, attributed much of Huntington’s stance to a knee-jerk reaction by some on the right today to anything that’s labeled green.
The good news for OCPA was that the audits showed it was in a solid financial position. That suggested it wasn’t doomed to the same fate as Western Community Energy, a community choice plan that served six cities in Riverside County for just over a year before June, 2021, when it became the first such agency in the state to declare bankruptcy.
Instead, OCPA appears to be well on the path to turning things around.
Making changes
That shift began in January, when four of the community choice agency’s five board members were replaced. And one of their first big decisions came in April, when they voted to fire Probolsky.
The new board then voted to make Mosca, who’d been the agency’s director of communications, interim CEO. They cited his credentials as a founding member and chair of San Diego Community Power, which is the second-largest community choice energy program in California, along with his previous experience working for San Diego Gas & Electric and Southern California Gas Company.
After reviewing the various audits and investigations of the agency, the board directed staff to develop a 24-point improvement plan to address concerns raised in those reports. The OCPA implemented the final step in July, with sweeping changes to its governance, contract approval process, website, staffing and more.
Eighteen of those suggested changes came from the state audit released in February. Agencies have to send responses to such audits documenting their progress after 60 days, six months and one year. After the 60-day update, the state auditor’s office marked half of the 18 recommended changes as “fully implemented.”
Mosca said they submitted evidence of completing the other half of the suggested changes by the six-month deadline in August. Those reports are now under review, according to Ryan Grossi, spokesman for the auditor’s office, with an update expected soon.
Another early criticism of OCPA was that it had hired too many pricey consultants. While Mosca said that’s normal in the early days of a startup, he said they’ve been bringing more positions in house. By the end of the year, he said they’ll have about 17 employees.
One of those new employees should be a permanent CEO. Applications for that position closed Oct. 18 and the board will be interviewing candidates in mid-November.
The agency’s finances also have grown even more solid than when the audits came out. Later this month, Mosca said they expect to present updated financial reports showing the board that OCPA has $88 million in reserves.
Community choice programs are mandated by law to put excess revenues toward energy programs that benefit the local community, Craciun noted. So she’s excited to see some of that money start coming back to local residents to, say, help them buy electric heat pumps or install solar panels or to build cooling centers throughout Orange County.
What’s ahead
By the time temperatures heat back up next summer, OCPA will likely have parted ways with Huntington Beach’s residents, who make up more than a third of its customer base. But Mosca said he doesn’t anticipate significant financial fallout as a result, since his team can simply buy less power going forward — that is, if another city doesn’t step up to take Huntington’s place.
It doesn’t cost a city anything to join the agency. If a council votes its city in, OCPA’s staff just has to prove to its board and to the California Public Utilities Commission that they can buy enough energy to meet the growing demand. The agency then has a year to ramp up, which means a city that expresses interest now could shift its residents to OCPA power starting in 2025.
“There are a lot of cities that are interested and that we’ve been having conversations with,” Mosca said, as he rattled off names of half a dozen Orange County cities.
Mayors for most cities he named didn’t respond to requests to discuss the seriousness of their interest. A staffer at one city said they’d been having internal talks about the potential benefits of moving to OCPA, but he spoke on background out of concern for political fallout given what happened in Huntington Beach.
Only one city Mosca mentioned sent a firm response, with Seal Beach City Manager Jill Ingram saying via email that they have no plans to discuss joining the OCPA.
But with Edison asking state regulators to approve a rate increase of more than 6%, which would raise average bills by more than $9 a month starting Jan. 1, Craciun thinks city councils that choose not to give their residents a choice to get energy from community choice programs such as OCPA will come to regret that decision. And she said that’s without accounting for environmental costs of continuing to rely on power that comes primarily from burning fossil fuels.
“The cost of inaction for cities is great.”
