A number of Orange County cities have moved to change the way they get their energy, which officials say will save local residents a little money and help combat climate change.
The cities of Buena Park, Fullerton, Huntington Beach and Irvine, which started the effort, are already in. The cities have formed a new public agency where they’ll buy and sell their own energy and invest in renewable energy sources while slightly lowering people’s utility bills.
Some are now looking to officials in Santa Ana — one of the densest cities in the county and the U.S. — to possibly join next and exit the current investor-owned power company servicing the region, Southern California Edison.
But will they?
That question came up earlier this month at the Santa Ana City Council, where staff researched the potential pros and cons of joining the new Orange County Power Authority and presented their findings to the panel.
Staff did identify what they saw as potential pluses, among them being slightly lower rates for Santa Ana residents, clean energy supply options, and reduced greenhouse gas emissions.
The city’s joining of the power authority could also result in funds for local energy programs, job creation and economic development, according to the presentation led by the city’s Public Works Director Nabil Saba.
But Saba and staff said they identified several areas of concern over joining the community choice movement: Potential shrinking profit margins due to anticipated costs of leaving Edison and the projected long-term costs of wholesale power.
The revenues from the agency would also be limited to, among other things, repaying the debt incurred by Irvine, which fronted the bill to establish the power authority.
Joining the power authority would not be “a money making engine for the city,” Saba said Tuesday.
He pointed to a 10-year financial study indicating that there wouldn’t be any money to fund local energy programs, benefits or incentives for Santa Ana residents until 2027.
Things like senior discounts or solar panel incentives won’t be offered to local power customers until then, Saba said, though the power authority would eventually offer programs similar to the ones offered by Edison right now.
Councilwoman Thai Viet Phan voiced concern over Santa Ana buying a considerable amount of clean energy to power the same grid that services the entire region, only for it to get mixed in with fossil fuel energy purchased by other local agencies and distributed to residents.
Saba and City Manager Kristine Ridge pointed to energy regulators at the state Public Utilities Commission, which has mandated every power purchaser to meet certain requirements around the amount of green and sustainable energy they purchase over the next several decades.
And local residents would be able to individually choose to pay more for a higher percentage of their energy consumption to come from green or renewable sources, staff said Tuesday.
Asked by Councilwoman Nelida Mendoza what “the best approach” for Santa Ana would be, Saba said “my opinion right now is that we should wait a couple years before we join the (power authority).”
“We have plenty of options, but I don’t see us needing to rush into joining,” he said.
“Thank you, I agree with that,” Mendoza replied.
But staff got pushback from Community Choice advocates during the public comments portion of Tuesday’s meeting.
Costa Mesa resident and clean power advocate Linda Kramer called the program a “proven model.”
“I didn’t hear a lot of the financials mentioned,” she said, adding “the feasibility study for Irvine estimates that after all costs, all expenses, (the city) will get about $3.4 million a year back to the city. That money (under Edison) is now going to the investors at the utilities.”
Kramer also pointed out that other community choice power agencies across the state are actually offering businesses and energy customers bill credit during the financial hardships of the Covid-19 pandemic.
“East Bay Community Energy was in October on its third round of community grants for workforce development for people that lost their job,” Kramer added.
Santa Ana resident Virginia Bernal called it “shortsighted” to wait more years for observation and study as Saba suggested.
“Does the report show actual numbers not shared during the presentation? Because the insinuations made are that the program would be to our disadvantage,” she said, adding:
“Edison gets profit for their investors, our city should be the ones earning that profit even if it may be delayed a few years.”
Bernal warned of “great costs” expected to be imposed by climate change and said “lower income families are going to be the most impacted.”
“We have to have the long view, and we have to take part aggressively in the transition to green energy,” she added.
Sarmiento at the end of the discussion wondered whether any of this information could be used to negotiate with Edison for more benefits for local residents paying for power.
“Can any of this be used to maybe leverage or negotiate with SCE for some better existing terms or benefits for residents — are there any programs we may not be taking advantage of or they may have available that we can say, ‘Look if you don’t offer or make these available we may walk,’” he said, adding:
“My thing is, to the extent we can always step toward renewable and cleaner energy — yeah that’s a good thing, and we may not see that around the corner, but if there’s real benefits it makes sense.”
Brandon Pho is a Voice of OC staff writer and corps member at Report for America, a GroundTruth initiative. Contact him at bpho@voiceofoc.org or on Twitter @photherecord.