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Orange County Power Authority rates ‘competitive,’ Irvine report says

April 14, 2023

After four scathing audits lambasted the Orange County Power Authority’s management, pricing strategies and transparency, Irvine’s own review of the green power agency praised its rates as “competitive” and net income as “positive.”

The firm hired by Irvine to conduct the operational review of OCPA said it focused on “how the actual CCA (community choice aggregation) operates” versus “process and admin” like the other audits. And it found OCPA’s power purchasing practices are consistent with industry best practices.

OCPA has a higher opt-out rate (23%) compared to other green power agencies which typically have a rate between 5-10%, representatives from EES Consulting, the firm hired to do the audit, said.

The firm, which was contracted to do work for OCPA in 2020, blamed the discrepancy on the negative press attention the power agency has received.

But “opt-outs have settled down now,” said Councilmember Kathleen Treseder, a member of the OCPA board. She said the green power agency is “on a course of reform.”

In March, OCPA began an improvement plan which includes mandating a member of the Community Advisory Committee, made up of residents from the member cities appointed by board members, be present at oversight and board meetings as well as the hiring of a new position meant to ensure greater transparency.

The goal, Treseder said, is to complete the 24 steps outlined in the plan by June, including drafting bylaws, “something that was really highlighted as being urgent by different auditors,” she said.

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OCPA is hiring. The company is already bringing on a “power resources director with more than 22 years of experience” in the industry who will start this month and plans to announce additional new hires “in the near future,” OCPA said following the audit.

As for the audit, OCPA is “pleased that the consultant found no operational issues,” a spokesperson said.

When EES Consulting presented its report to the City Council on Tuesday, April 11, a resident noted the firm previously did work for OCPA with a $150,000 contract. EES Consulting representatives acknowledged the firm had done work with OCPA but said it had not been contracted with the agency in over a year.

Treseder said she appreciated the comparisons EES Consulting made in its report between OCPA and other community choice energy programs but was “concerned” that she did not previously know the firm had worked with OCPA.

“I just want to make sure that people are able to consider that as they’re assessing the report,” she said.

For Councilmember Larry Agran, already a staunch critic of OCPA who first called for the Irvine-led audit, it was a “troubling revelation.” He said the audit “fell short” of addressing Irvine’s concerns with the green power agency, namely mismanagement and transparency.

“OCPA is continuing to fail to deliver on what was promised initially (cheaper, greener energy) and, of course, has been lacking in transparency,” Agran said. “I’m determined to see Irvine extricate itself from this failed enterprise.”

The audit relied on interviews of consultancy firms that oversee OCPA’s power purchase agreements since documents provided by OCPA were heavily redacted for confidentiality purposes.

OCPA launched as a green alternative to Southern California Edison nearly one year ago, with Irvine spearheading its creation. Fullerton, Huntington Beach and Buena Park also were early joiners of the county’s first community choice energy program.

However, since its inception, the ratepayer-funded OCPA has been riddled with allegations of mismanagement.

And it has led to independent audits by the Orange County Grand Jury, a contractor hired by the county, an internal review by the county and, most recently, a state audit. The state audit found the CEO and staff did not follow their own procedures when executing power purchase agreements and improperly issued $1.8 million in marketing and financial services contracts.

Irvine has debated whether to stick with the Power Authority in the past, ultimately deciding against withdrawing. The council planned to revisit pulling Irvine out of OCPA in June but City Manager Oliver Chi said it is unlikely the city would leave before mid-2024.

“There’s certainly a desire from everyone on the council to continue being part of the organization if things are able to be advanced in a way that comports with their expectations at the agency,” Chi said.

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