Orange County Power Authority ‘at a crossroads’ as member cities make tough choices

Irvine and Huntington Beach, the two largest cities in the Orange County Power Authority, a Community Choice Energy program, were not exactly locked in as the calendar turned to 2023.

Irvine, which fronted a loan of about $7 million to get OCPA off the ground at the end of 2020, came close last week to leaving the agency it helped create.

The Irvine City Council voted 3-2 at a special daytime meeting on Dec. 29 to stay in OCPA. Irvine Mayor Farrah Khan, a member of the board of the Power Authority, voted along with council members Tammy Kim and Kathleen Treseder in favor of staying in.

“We want to work with them to address any and all of their concerns,” OCPA director of communications and external affairs Joe Mosca said. “We want them to stay as a member, and we believe that this is the best opportunity and option for the city of Irvine to extend clean energy to its residents and businesses, and for it to reach all of its climate action goals.”

But the Irvine City Council will revisit possibly withdrawing in June. This concerns environmentalists like Ayn Craciun, an Irvine resident who is the county policy manager for Climate Action Campaign, a nonprofit climate policy watchdog.

Climate Action Campaign sent a letter to the Irvine City Council last week urging them to remain with the authority.

“We agree that OCPA has numerous leadership, governance and transparency issues that must be addressed,” the letter read in part. “However, leaving OCPA would cause more harm to families and our climate goals. OCPA is the only path to energy choice, competition, community reinvestment (including rate relief through bill credits), economic development and renewables.”

Craciun said Wednesday the next few months will be crucial to the organization.

“OCPA is a crossroads that will determine if it survives, and if Orange County communities are going to receive all of these benefits [of clean energy],” she said. “It’s very important that they bring in strong leadership. Irvine has given them six months to fix it … and if any of these cities withdraw, it could be very destabilizing, to say the least, for OCPA. It could be its death knell.”

Huntington Beach, meanwhile, is gathering information as it also prepares for a possible withdrawal. Last month, the City Council voted to have staff return by the end of February with options for leaving the agency, which currently also has Buena Park and Fullerton as member cities.

Casey McKeon, a newly elected Huntington Beach Council member, will join the OCPA Board of Directors beginning with its first meeting of the new year on Jan. 17.

Last week, Huntington Beach Mayor Tony Strickland issued a statement that the city withdrawing in haste “will likely subject the city to millions of dollars in immediate costs — costs that would be borne right away by the Huntington Beach taxpayers.”

Prior to the Orange County Board of Supervisors voting to withdraw the county’s unincorporated areas from OCPA, internal county auditors estimated it could cost $65 million to pull out. During the Irvine Council meeting, City Manager Oliver Chi — who previously held the same role in Huntington Beach — estimated a price tag of $145 million for Irvine to withdraw from OCPA.

These costs are because OCPA purchases energy contracts on each city’s behalf. They can recoup at least part of them on the open market, but just how much could the contracts sell for?

“You have to find out the details of the contracts — how long they go for, what they were purchased at, what price are they trading for now — can you unwind them if you want to get out of the OCPA?” McKeon said Wednesday. “To choose the best direction and the best path, we have to have all of the evidence and the facts, and we just don’t have that yet. We’re not going to make a decision without having all of the information that we need. City staff and the city attorney’s office are helping us gather information … to make the best decision for the Huntington Beach taxpayers.”

Mosca said leaders from OCPA, including himself, chief executive Brian Probolsky and chief financial officer Tiffany Law, will meet with Huntington Beach city staff on Thursday.

“The first meeting is going to really be an exploratory meeting,” he said. “All of the questions that they have are put out there, and we’re answering those questions. If we can’t answer them right there, we’re getting back to them with the answers as quickly as possible.

“This is an opportunity for us to make sure that our program is working for our member agencies. We don’t see this as a negative thing, this is a positive thing. Engaging each one of our communities on the type of Community Choice Energy program they want is important, frankly, and we’re looking forward to the questions and conversations with Huntington Beach and also with the city of Irvine.”

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