Orange County supervisors are demanding an independent investigation of the county’s controversial new green power agency – with supervisors warning they’re ready to yank the county from the Orange County Power Authority if it doesn’t agree to the review.
Supervisors – led by Katrina Foley, Lisa Bartlett and Doug Chaffee – said it was wrong for the Orange County Power Authority to be automatically switching residents to a 7% more expensive electrical plan than their current service, despite being billed as “community choice energy.”
County and city leaders also were originally told the program could save customers around 2% on their bill, but the agency’s cheapest option just breaks even with Southern California Edison.
“The real issue here is that there is some trust broken. There is a community concern that it was not working the way it was intended to work,” said Supervisor Katrina Foley, adding that she supports green energy efforts to fight climate change.
She, Bartlett and Chaffee said residents are running into barriers opting out of the more expensive service, with the Power Authority not making it easy to know that’s an option and follow through with it.
Supervisor Don Wagner, who was the Power Authority’s strongest supporter among supervisors and sits on the power agency’s board, defended the higher prices as a “premium” customers have a choice to pay, and warned of steep financial consequences if the county withdraws.
“The Power Authority has expended money [pre-purchasing electricity], because we said we want some of that power,” Wagner said.
Supervisors opted the county into the Power Authority last November with little public discussion, with service slated to start for residents of unincorporated county areas around Oct. 2023.
The costs to the county to leave now “could well be exorbitant,” Wagner said.
Yet this week Wagner’s colleagues had questions they didn’t when they all voted to join – even amidst transparency concerns at the time.
At Foley’s suggestion, supervisors voted 4-to-1 to notify the Power Authority they’ll withdraw the county unless the power agency agrees to open itself up to an audit by a firm chosen by the county.
The auditors would examine the Power Authority’s finances, operations, contracting, financial ledgers, costs incurred and money paid by the power agency so far.
Supervisors gave the Power Authority until Sept. 9 to agree to the audit, which would be completed by Dec. 6.
Once the audit is done, supervisors said they would review the findings and decide by the end of December whether to withdraw.
The vote was 4-to-1, with Wagner opposing.
It’s the most recent challenge facing the Power Authority just months before it automatically takes over electricity service for thousands of households across the county.
The county was the most recent authority to join the agency, meaning residents of unincorporated areas are set to start receiving power from them in 2023.
About 130,000 people live in OC’s unincorporated areas, which fall outside of cities and instead fall under the Board of Supervisors’ jurisdiction.
No one – including county attorneys and the Power Authority’s representative – had answers at Tuesday’s supervisors meeting about how much it could cost the county to withdraw.
If supervisors move forward with withdrawing, the county could be the first member to officially vote on pulling out of the agency since Lake Forest left in 2021. But they aren’t the first ones to raise concerns with how the agency is being run.
Both the cities of Huntington Beach and Buena Park recently passed votes of no confidence in OC Power Authority CEO Brian Probolsky’s work as CEO, and Power Authority board members have tried to discuss firing him multiple times.
The Power Authority debate is prompting fundamental questions about government, how transparent public agencies should be, and consumer choice.
While taxpayer-funded contracts are almost always public, the Power Authority refuses to disclose their multi-million-dollar power purchase agreements.
OC Supervisors’ Chairman Doug Chaffee asked for copies of the agreements – to find out just how much power the agency has purchased for the county, which the county could be billed for if it withdraws.
“I would like copies of the power contracts – if you purchased them for the benefit of the county, I’d like copies of them. I’d assume those are public records,” Chaffee said.
The Power Authority’s representative said no.
“Most power purchase contracts are confidential,” replied Steven Halligan, a management analysis at the Power Authority.
“We do provide some, but there will be redactions.”
Wagner argued in favor of the Power Authority’s approach, where residents are automatically put on a more expensive electricity plan and then given the choice to opt out.
“It is a premium that you as a purchaser of power…have an opportunity to pay for greener power. You get to make the choice,” said Supervisor Don Wagner.
The county’s audit would be in addition to a review currently underway by the city of Irvine, who funded all the startup costs for the agency and is currently reviewing all of their pre-launch operations.
The launch took place in April of this year.
Under questioning from Foley, a Power Authority official acknowledged Irvine’s review is limited in scope to the funding Irvine put in, and does not look at the Power Authority’s current operations and spending.
The county’s audit demand also comes after the Power Authority was harshly criticized by a grand jury report questioning the agency’s leadership and decision making, specifically taking issue with Probolsky’s lack of experience.
To read the grand jury’s report, click here.
The agency is also currently investigating a whistleblower complaint from Probolsky where he alleged current and former board members were engaged in double dealing and corruption to get him out of the top job.
Power Authority service launches for residents of Fullerton, Irvine, Buena Park and Huntington Beach this October, with all residents opted in at the most expensive 100% renewable energy level except in Fullerton, where residents will be automatically set at the 70% level.
For residents who want cheaper power, they can choose to either select one of the lower, dirtier tiers offered by the agency or opt out altogether and stay with Southern California Edison.
At the Power Authority’s next board meeting, the agency’s leaders are expected to discuss both the county’s audit demand and their response to the grand jury report, according to Halligan.
That meeting is scheduled for Sept. 6.
Nick Gerda covers county government for Voice of OC. You can contact him at firstname.lastname@example.org.
Correction: An earlier version of this story stated that all cities in the power authority would opt their residents into 100% renewable energy. While the cities of Irvine, Huntington Beach, and Buena Park will do that, the city of Fullerton is opting its residents in at the 70% renewable energy level. We regret the error.