It looks like residents across Orange County will be paying $50 more a year for their electricity bills after board members of the county’s first community choice energy program finally picked preliminary rates.
Despite multiple studies over the past three years pledging the new utility would be able to offer power at a premium price, the agency barely broke even with Edison’s offered rates for some of its new customers.
The Orange County Power Authority launched near the end of 2020, and spent the last year getting ready to launch a competitor to Southern California Edison with plans for cleaner power and more local control.
[Read: OC Clean Power Agency’s First Year Sees an Executive Resignation, Transparency Concerns]
More than 700,000 residents in the cities of Fullerton, Irvine, Huntington Beach and Buena Park are set to be moved to the new power provider this year,
Unincorporated areas are slated to join next year.
Originally, the cities who joined up were promised their customers would see even lower rates than Edison, with a study commissioned by the city of Irvine forecasting a 2% savings on customer’s annual electricity bill back in 2020.
According to a Fullerton city staff report from November 2020, they were told the program would bring millions in savings to residents every year as well as develop new jobs in the community to support the program.
But a year later, CEO Brian Probolsky said the savings would be limited – if they came through at all – in a presentation to the Tustin City Council.
“They will be competitive (with Edison),” Probolsky said at the council’s November meeting. “Very close, maybe a little bit less, maybe right at par.”
The final result just barely managed to meet the rates offered by Edison for the same product, matching Edison’s base option that provides the same renewable energy as the OC Power Authority would.
But to pay for it, every city will have to automatically enroll themselves and their residents in the higher tiers that give people a 70% concentration of renewable energy, at a premium price.
According to a presentation from the agency’s staff at their Tuesday meeting, in order to provide a base rate competitive with Edison at $114 per month for the average consumer, they need to charge the cities and most residents $118 per month to make up the gap.
“It’s a work in progress, but this becomes sort of a beginning framework,” said authority board chair and Irvine City Councilman Mike Carroll. “We’d launch with a basic rate structure parodied with (Edison).”
For those who don’t want the bump, they have two options: petition the agency to move to one of the lower offering levels that are equivalent with Edison’s rates, or opt out of the agency altogether and stick with Edison.
No board members or staff mentioned the earlier promises of savings during the meeting.
Public commenters were supportive of the board’s decision to opt customers in at 70%, with most pushing the board to go even further and push everyone in at the 100% renewable energy setting.
While the initial rates have been approved, they’re set to shift a little in the coming months.
So far, Irvine is the only city to officially say they’ll choose the higher rate, while the other member agencies haven’t voted on it yet.
If city councils decide to not force residents into the higher paying options, the board will have to shift the prices again.
The rates will also change after Edison announces their new rate hike in March, with plans for staff to return to the board members with any potential revisions.
Any shift up or down is expected to be minimal according to Tiffany Law, the agency’s chief financial officer, and multiple consultants at the meeting.
The power authority’s business and industrial customers, along with the city government’s who signed up for the program, will begin receiving power in April, with the rest of their customers starting in October 2022.
Noah BIesiada is a Voice of OC Reporting Fellow. Contact him at nbiesiada@voiceofoc.org or on Twitter @NBiesiada.
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