City of Irvine Prepares to Exit the Orange County Power Authority;  Unanimous Vote to withdraw from the Agency in 2025

In the Holiday rush, this somehow ended up in my SPAM filter.

 

IRVINE, Calif. (December 19, 2024): At a special meeting December 12, the Irvine City Council voted unanimously to withdraw from the Orange County Power Authority (OCPA) in 2025, and directed numerous changes to the City’s relationship with the agency in the meantime. This decision comes after serious concerns were raised regarding transparency, financials, and oversight considerations related to how OCPA has been operating.   

The City Council’s decision means all Irvine electrical ratepayers will be moved into the Basic Choice electrical plan. This transition will save the typical residential electrical user around 5% per month on their bill. Concurrently, the City will be working to refine details related to Irvine’s pending withdrawal from OCPA. In January, the City Council will also discuss who will represent Irvine on the OCPA Board in 2025. 

This action follows a detailed presentation by City staff, accompanied by extensive City Council deliberations and public input. It reflects a concerted effort to address ongoing concerns about OCPA’s operations and its approach to engaging with the City of Irvine. While the City has consistently supported the OCPA—and, in fact, served as the driving force behind the creation of the agency—recent actions taken by OCPA have demonstrated a deliberate and intentional withholding of critical information from Irvine. 

Background:  

Until the December 12 City Council meeting, Irvine customers were automatically enrolled into a utility rate priced on consumers receiving 100% renewable energy, which comes with higher costs. At a City Council meeting November 26, the OCPA provided a presentation that detailed potential rate increases if Irvine did not make a significant change in its default power profile. OCPA only recently detailed that the rate increase would be around $34 per month. However, based on the City Council’s decision at its December 12 meeting, rather than be subject to a $34 per month increase in electrical costs, residents will instead experience an approximate 5% decrease in their electrical bill. Further, Irvine customers will still have the option to choose to update their electrical power profile to the 100% renewable plan. 

For more information about the City’s environmental programs, visit cityofirvine.org/ep and/or learn more about the City’s Climate Action and Adaptation Plan here. 

 This opinion piece popped up in Irvine Watchdog.  The Subhead says it all: Irvine Votes to Strip Away Our Freedom of Choice and Lock in Rising Electric Rates.  But Irvine residents had to opt-out of OCPA because everyone was moved to OCPA.

Here’s an argument for leaving OCPA:

OCPA RATE PLANS

OCPA claims customers enrolled in their Smart Rate or 100% Renewable Plans are “choosing” to pay more every month for their electricity than SCE customers. The reason, according to Irvine City Council members and OCPA Board members, Tammy Kim and Kathleen Treseder, is to get the benefit of cleaner energy, and they do it for the benefit of everyone. That sounds so noble, customers might not see it this way. The utility grid, from SCE, where we ALL receive our power from, is at its maximum capacity for renewable energy. The grid supplies us ALL with approximately 35.8% of renewables, and integrating anymore presents challenges without a huge backup system.

PURCHASE OF RENEWABLES
The OCPA is in the business of buying and selling power, for a profit, And because California has an over-abundance of renewables, and they are inexpensive, OCPA will go into a market where they can get sold, while simultaneously purchasing cheap fossil fuel to supply to the grid.  With each purchase of renewable energy comes a receipt that is separate from the physical electricity, and these receipts can be bought and sold independently. OCPA hangs on to these receipts, also known as Renewable Energy Certificates (REC’s), and gives those to the State to offset their own energy consumption of fossil fuels, and claim that they are using renewable energy, even if they are still connected to a conventional grid like SCE.

RESERVE FUND

The OCPA has a huge reserve fund. And they have the largest opt-out rate of all California Community Choice Energy (CCE) programs in California of 38%. The average is between 4% – 8%. Some have suggested the board uses this money as a personal slush fund.

REASONS WHY OTHER CITIES GOT OUT OF THE POWER AUTHORITY

• Lake Forest left during their grace period and before any energy was procured for their city. The reasons were multiple. They wanted the Joint Powers Agreement amended to give a term limit for the Board Chairperson. They also wanted the mentions of EMINENT DOMAIN in the Joint Powers Agreement to be taken out, completely. And they did not want Irvine to have two seats on the Board. All requests were denied.
• The County of Orange gave notice after power was already procured for their customers, but prior to its delivery by SCE. They still walked away paying a hefty fine.The two main reasons the Board of Supervisors voted to get out was because the OCPA refused to show their power purchase contracts and agreements. They also felt that the CEO at the time and their legal attorney was unable to properly address their overall concerns.
• Huntington Beach and OCPA Board member, Casey McKeon, asked the OCPA for the California Independent System Operator Settlement Statements. The OCPA denied his request. McKeon stated that there was no reason not to release these documents. He stated they were nothing but a “Shell“ company, and compared them to Enron.

OCPA OPERATIONS

Long-term power purchases are made a year in advance. And with OCPA’s unusually high opt-out rate, they need to secure new cities before their existing customers are saddled with paying the cost difference. This could financially bankrupt the organization.

POWER CONTENT LABEL

OCPA’s Power Content Label (PCL) only discloses what the OCPA has purchased, and not what they have sold off for profit. Misleading or deception, you decide.

FEASIBILITY STUDY

Recently at a Costa Mesa City Council Meeting, OCPA CEO, Joe Mosca stated that a Feasibility Study is done FOR the benefit of the OCPA. He claims that the study is to see if the city considering joining will benefit their organization. OCPA is paying for this study, while the other cities had to pay for their own, but used OCPA’s recommended agency, and before the OCPA was up and running, says they want to control what the study will say about the organization now, because the report will be shared with the respective city.

IMPORTANT FACTS TO REMEMBER

• Cities that join are automatically removing their residents and businesses from SCE and placing them in the OCPA.
• Whether enrolled in OCPA or SCE, everyone receives the same mix of energy, only difference is, OCPA customers pay more for Smart Choice and 100% renewable.
• OCPA claims they are transparent, but refuses to show their settlement statements.
• Until the loan to Irvine is paid back, Irvine will have two seats on the board.
• Having substantial reserves with an unusually high opt-out rate is concerning as to how those reserves were collected.
• Misuse of customer funds by board members, and mismanagement are serious concerns. Without an outside independent oversight review board, customers will have no idea what is going on behind the scenes.
• Long-term energy contracts can affect rates. OCPA needs to be transparent and keep customers informed of the pros and cons of these contracts.
• The six-month notice requirement by the OCPA for customers to switch back to SCE is a significant consideration for a potential city that is considering signing on.
• OCPA can change their rates AT ANY TIME, as they are not regulated by the State like SCE.
• Cities do not have local control when the board votes are weighted by each cities load share, and Irvine gets two votes.
• The Joint Powers Agreement should be reviewed by a legal attorney that specializes in energy contracts. Cities need to know what their outside liabilities are, and how eminent domain can become a real issue if the OCPA goes bankrupt and those long-term power contracts do not get paid.

PAST HISTORY

With all the public scrutiny and past audits, including by the City of Irvine, the OCPA has not changed how they are managed and operated. Management is still the same. They still employ the same legal firm and advisory consultants; the new CEO is no better than the last CEO. In fact, they both have the same employment history of sitting on various boards, except Joe Mosca was the Mayor of Sierra Madre. Neither Mosca or former CEO Brian Probolsky have no degree in the energy field, or experience in dealing with huge amounts of money in buying and selling of power. An obvious requirement for a CEO position in any energy organization, and mentioned in the audit reports.

SUMMARY

This organization gives the appearance that it is reducing carbon emissions by the procurement of renewables, and even worse is their customers are mislead into believing those renewables are going straight into their homes and businesses.

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I’ll encourage readers to review a three-part series in The Marin Post that appears to be a prequel to what may happen to OCPA.  Go here.