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Mismanagement, Sloppy Hiring Practices, Lack Of Transparency. Will Orange County's Fledgling Clean Power Agency Survive?
Some of the same climate activists who helped birth the Orange County's Clean Energy Agency now wonder if it can be saved. This is your guide to why it matters.
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It's weird times when the people championing a clean energy future threaten to turn their backs on what's widely considered the quickest, most viable way to get there. But that's where some climate activists have been lately with the Orange County Power Authority (OCPA), O.C.'s fledgling agency intended to accelerate the move toward renewable energy and, at the same time, give communities more control over electricity prices and investments.

The OCPA is at a crossroads. Orange County, which was set to receive energy from the agency later this year for unincorporated areas of the county, voted to withdraw in December. Huntington Beach and Irvine, the agency's two largest members, are also considering withdrawing.

Customers have complained of higher-than-expected electricity prices and paltry communication about their options since the agency, which was founded in 2020, began providing power last year. Public officials and watchdogs have voiced mounting concerns over mismanagement, sloppy hiring practices and a lack of transparency within the agency.

"The Orange County Power Authority as an institution, sadly, has been used since day one as a tool for corruption," said Ayn Craciun, Orange County Policy Manager for the nonprofit Climate Action Campaign.

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Still, even some of the most vocal critics, including Craciun, say that saving the OCPA is the county's best hope for mitigating the greenhouse gas effects that are already showing up in the form of crumbling coastal infrastructure and devastating wildfires.

"This is our only chance at clean energy that meets the scale of the climate crisis," Craciun said.

To help you untangle what’s going on, we’ve written this guide. It’s designed for:

  • Residents of cities covered by the Orange County Power Authority (you live in Buena Park, Fullerton, Huntington Beach or Irvine) or potential customers (you live somewhere else in Orange County). This is a rundown of what critics say has gone wrong with the OCPA and how it could be fixed. Keep reading if you want to learn more about whether your household, and your community, would benefit from being in or out.
  • Anyone who cares about the climate crisis and meeting the state's goals for reducing greenhouse gas emissions. Many communities around the country either have, or are considering, community choice aggregation. OC's experience shows how it could unfold elsewhere. Read on to learn what community choice aggregation is, and what it isn't.

Community choice energy is confusing. Here's what it is, and isn't

Community choice aggregation (CCA), also known as community choice energy, is a model that allows cities and counties to purchase energy on behalf of their residents while still relying on their existing utility for transmission and distribution.

"CCAs are an attractive option for communities that want more local control over their electricity sources, more green power than is offered by the default utility, and/or lower electricity prices. By aggregating demand, communities gain leverage to negotiate better rates with competitive suppliers and choose greener power sources."

U.S. Environmental Protection Agency

Currently, CCAs like the Orange County Power Authority serve about one quarter of Californians, and that number is growing, according to the California Community Choice Association. So if you don't currently get your power through a CCA, you might have the option soon.

Los Angeles County has five CCAs. The largest, Clean Power Alliance, serves 30 cities in L.A. and Ventura counties plus the unincorporated areas.

Where CCAs operate, electricity still flows through substations and power lines maintained by the local utility. Those utilities also still handle the billing, which means, in most of L.A., O.C., Riverside, San Bernardino and Ventura counties, your bill will still come from Southern California Edison.

Most CCAs purchase a higher percentage of renewable energy than traditional, investor-owned utilities like Southern California Edison — and a higher percentage than required by the state — which is why environmentalists say they're a powerful tool for accelerating California's transition to clean power.

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And many CCAs offer prices that are comparable, if not cheaper, than the local utility, although that has generally not been the case for the OCPA. (As of January, the OCPA's basic rate is 2% lower than Southern California Edison's basic rate, but OCPA customers were initially opted in to higher-priced plans.)

A view of a low-lying city area with a beach on the right and streets largely vacant. Palm trees line street and park areas.
An aerial view of Huntington Beach taken during the pandemic shutdowns. The city is considering withdrawing from the OCPA, as is Irvine.
(Apu Gomes
AFP via Getty Images)

The OCPA currently has close to 243,000 customers in Buena Park, Fullerton, Huntington Beach and Irvine. Nearly 80% of those customers are on a 100% renewable energy plan because every city except Fullerton chose to automatically enroll its residents in that option. (Fullerton enrolled its residents in OCPA's 69% renewable energy plan.)

That doesn't mean, as many people assume, that the electricity flowing into their homes comes entirely from wind, solar, geothermal or other renewable sources. It means that an amount equal to the local demand for renewable energy will be added to the grid somewhere in California. OCPA buys that energy, thereby increasing the state's overall renewable energy supply.

According to the Orange County Power Authority, the total annual electricity demand of its customers is a little over 4,400 gigawatts. That's equal to nearly one-third of all the wind energy generated in California in a year.

Proponents say community choice energy plays an important role in driving the development of renewable energy in California and helping the state, and local governments, meet their greenhouse gas reduction targets.

Generally, the more customers demand renewable energy, the more renewable energy plants get built, and the cheaper that energy gets.

Local control, local investment

CCAs are designed to offer more choice for consumers — often including a rate option that's cheaper than the traditional utility — and revenues get invested back into the local community. Those investments can take the form of energy efficiency programs, rebates for low-income residents and electric vehicle charging stations.

Some CCAs also invest in their own energy generation, like MCE, which serves customers in Contra Costa, Napa, Marin, Napa and Solano counties. That CCA now generates a total of 48 megawatts of renewable energy locally, enough to power more than 12,000 homes each year.

David Hsu, an associate professor at the Massachusetts Institute of Technology who studies community choice energy, said CCAs are often better than traditional utilities at coming up with energy projects that will directly benefit customers. "They have this local sense of what to do with the money," Hsu said.

MCE, which is widely considered a model CCA in California and nationwide, uses its resources to offer no-cost energy efficiency upgrades to residential customers and technical assistance for businesses looking to reduce their energy bills. They train and hire locals to work in renewable energy. They converted a brownfield into a solar farm and helped build a solar-powered EV charging station.

But, Hsu said, it takes time to build up enough capital and know-how to implement such projects. MCE launched in 2010.

'Something for all sides of the political spectrum'

When activists first brought the idea of community choice energy to Orange County, they hoped they might hook conservative leaders on other-than-environmental benefits such as cost savings for homeowners and the ability to invest in locally tailored energy projects.

"Orange County's a very purple community and the beauty of community choice is that it represents something for all sides of the political spectrum," said Linda Kraemer, chair of the Orange County chapter of former President Al Gore's Climate Reality Project.

One leader who was intrigued was Mike Posey, a Republican, former Huntington Beach councilmember and founding board member of the OCPA. He said he was drawn to the idea that residents and businesses could select the amount of clean electricity they want to purchase.

"For businesses that were really committed to establishing a green, renewable business model, they wanted that choice," Posey said.

Conservative Republicans believe in environmentalism. We may not subscribe to man-made climate change but we do subscribe to air pollution. Clean air is a good thing.
— Mike Posey, former Huntington Beach councilmember

In theory, Southern California Edison also offers electricity plans with a greater percentage of renewable energy than its standard 33% — and, as of last October, they're actually the least expensive option of any plan offered by them or OCPA. But customers can't enroll in Southern California Edison's "Green Rate" program because the utility doesn't have enough renewable capacity to meet the demand. (A spokesperson said they’re working to increase availability, but there’s currently no timeline for when people can opt in.)

Posey said he also supported forming the OCPA in part because he liked that revenues would be invested back into the community. Plus, Posey, like most of us, likes clean air.

"Conservative Republicans believe in environmentalism," he said. "We may not subscribe to man-made climate change but we do subscribe to air pollution. Clean air is a good thing.

"If we create demand for more solar and wind, more of these power plants will get built, which will reduce demand for natural gas or coal power plants," he said.

More choice, more confusion?

One of the Huntington Beach businesses that wanted cleaner energy was Primal Elements, which manufactures soap and other personal care products in Huntington Beach. The company was one of the first to earn sustainability certification from the city, in 2020.

Co-founder Scott Freeman said he was initially excited about the idea that his manufacturing facility could be powered by wind and solar energy at a comparable, or, in the future, even lower rate than Southern California Edison. "I was, OK, sign me up, I'll do it," he said.

It turned out, there was no signing up. The state law governing community choice aggregation requires all customers in a CCA's service area to be automatically opted in to get power from the new agency. A recent paper from researchers at University of California Los Angeles argues that automatic enrollment "while sometimes controversial," is critical to ensuring CCAs have the robust customer base needed for financial viability.

Casey McKeon, a Huntington Beach councilmember and new OCPA board member, said the automatic opt-in has been one of his constituents' biggest complaints: "I get emails almost daily to that fact," he said.

But customers can opt out — meaning they go back to getting electricity from the traditional utility — or they can choose a different rate plan offered by the CCA. State law requires CCAs to notify customers multiple times about their ability to choose a different plan, or opt out entirely, and how to do it.

In the case of the Orange County Power Authority, Huntington Beach chose to automatically enroll customers in the 100% renewable rate plan, which was the most expensive option.

At $0.015 per kilowatt more than Southern California Edison's basic plan, residential customers likely would've seen only a small difference on their bills — about $8.50 for a standard household. Commercial customers, however, may have seen their monthly bill jump by several hundred, or even several thousand dollars, because of higher electricity use.

Freeman and many customers in Huntington Beach and elsewhere in the OCPA's service area said they felt blindsided by the automatic switch to a more expensive electricity provider. Freeman said his first few bills from the OCPA were shockingly higher than the amount he had spent on energy the previous year. He contacted OCPA and told them he wanted to opt out.

"Everybody I knew who was on [the OCPA plan] opted out of it," Freeman said. "They said, 'this is ridiculous.'"

Auditors note transparency problems, dismal communication

An Orange County Grand Jury investigation last year concluded that the OCPA was less than forthcoming about price when it launched power for business customers in April.

"Although the price differentials were known to OCPA at the time, no pricing information was included in the mailers sent to the affected businesses, nor could it easily be found on the OCPA website," the grand jury wrote. An outside audit commissioned by the Orange County Board of Supervisors came to a similar conclusion.

The OCPA countered that it has, and had at the time, published rates and a rate comparison tool on its website. But other CCAs have made this information much easier to find, the auditors found.

Freeman also expected to start seeing signs of OCPA's investment in renewable energy across Orange County immediately. "Have you seen power grids put up by them? Any solar or wind stuff going up by them? Absolutely nothing," he said. Freeman said he now considers the OCPA a scam.

High opt-outs, 'conspiracy theorists'

Experiences like Freeman's — along with mistrust, poor communication and bad publicity — have left the OCPA with an opt-out rate three times higher than the state average for CCAs.

Statewide, 92% of customers in areas served by CCAs get their power from the local CCA, according to the latest data from the California Community Choice Association, from October 2022.

In areas served by the Orange County Power Authority, about 75% of residential electricity users and 88% of commercial users get their power from the OCPA.

The rest, about 68,000 customers in Buena Park, Fullerton, Huntington Beach and Irvine, have decided to stick with receiving electricity from Southern California Edison.

This unusually low participation rate in a CCA could jeopardize the OCPA's finances and its ability to pay back creditors, the county-commissioned auditors warned.

Much higher than expected opt-out rates make the prospect of, perhaps, even higher opt-out levels the most tangible risk to Orange County CCA customers.
— December 2022 audit

"Much higher than expected opt-out rates make the prospect of, perhaps, even higher opt-out levels the most tangible risk to Orange County CCA customers," auditors wrote in a December 2022 report.

Posey and others blame the high opt-out rate, in large part, on negative messaging about the OCPA, in the news and on social media. The critiques have ranged from faults called out by auditors and in the grand jury report — for example, about the lack of experience of some OCPA staff and the lack of transparency in contracting — to confusion and blatant misinformation about how community choice energy works posted by residents in social media forums.

Numerous posts in Huntington Beach Facebook groups urged people to opt out of the OCPA, calling it “a "fraud" and falsely claiming that OCPA was merely buying electricity from Southern California Edison and charging higher rates.

Posey blamed the negative social media campaign in Huntington Beach on "the usual cast of characters of conspiracy theorists."

Mismanagement, Corruption?

To make things especially confusing for the public, misinformation has sometimes been mixed with well-documented critiques of the OCPA. Here are some of the most prominent, as laid out in public documents and verified through interviews:

  • The law firm hired to help start the OCPA offered a single candidate for the position of CEO to the board of directors — Brian Probolsky, a local Republican political operative with no experience in the highly complex electricity industry. (He does, however, have ample experience in the water industry: He's been a director of the Moulton Niguel Water District since 2008.) Other OCPA employees have also been hired without a competitive process. 
  • Probolsky has had an unusual amount of power to execute contracts without board oversight, according to county auditors. For example, internal policies at the agency allowed him to waive competitive bidding as long as their general counsel signed off. 
  • Melahat Rafiei, a high-profile Democratic consultant linked to corruption scandals in Irvine and Anaheim, played an outsized role in early decision-making at the OCPA, according to several LAist sources, despite having no formal position there. Probolsky, the CEO, denies that Rafiei had any involvement with the OCPA.
  • The OCPA has failed to share documentation of purchases, contracts and hiring practices with auditors and members of the OCPA. 
  • The OCPA failed to follow established best practices for community choice aggregators in its rate roll-out and communication with customers.  
Read what auditors and watchdogs have said about the OCPA's problems

In a statement following the grand jury report, Probolsky pushed back against some of the criticism, saying the report contained "factually incorrect information and impractical assertions." Probolsky also filed a whistleblower complaint last summer, alleging that Posey and his OCPA board successor Dan Kalmick, were colluding to replace him.

The California State Auditor is set to release its audit of the OCPA on Tuesday.

Calls for reform are yielding some results

Demands for change at the OCPA have steadily yielded some results.

Earlier this month, a coalition of two dozen environmental and Democratic groups in O.C. penned a letter to the OCPA board of directors demanding that they remove CEO Probolsky and stop working with the law firm BBK. The same demands have come from Irvine City Councilmember and OCPA board member Kathleen Treseder, who helped bring community choice energy to the county.

BBK's legal counsel for the OCPA, Ryan Baron, resigned earlier this month, citing "personal attacks." The OCPA board later voted to look for a new law firm.

The board also recently changed some of its internal rules to allow more oversight of the CEO position. It also took steps toward hiring a chief operating operator. The OCPA has lacked someone in this key position since Antonia Castro-Graham resigned in late 2021 following a berating by CEO Probolsky that was caught on camera.

Following the board's reform efforts, Treseder said that she wants Irvine to stick with the OCPA "to give the board a chance to make the next steps" toward improvements.

"I got the sense that we have some momentum to do that," Treseder said.

Observers have also praised the OCPA for bringing in several employees with extensive experience in community choice energy, including Joe Mosca, who helped found San Diego Community Power, the state's second largest CCA. Mosca now serves as OCPA’s communications director, overseeing customer marketing, public outreach and government relations for the agency.

Mosca said the OCPA plans to make public a "continuous improvement plan" following the release of a state audit on Tuesday.

"It's going to actually identify every recommendation that has ever been made vis-a-vis any audit or third party analysis and very clearly show where we're at with that recommendation," he said.

Climate activists and watchdogs, including Traseder, Craciun and Kraemer, continue to demand that Probolsky be replaced.

Huntington Beach and Irvine are still weighing whether to leave the OCPA.

"I'm in the fact-finding mode," said McKeon, who represents Huntington Beach on the OCPA board. Huntington Beach leaders announced at a council meeting last week that they planned to sign a non-disclosure agreement with the OCPA in order to review power purchase agreements to determine the city's liability if it left the OCPA.

Huntington Beach also recently switched the city from OCPA's 100% renewable energy plan to its "Basic Choice" 38% renewable energy plan, which is expected to save the city $234,830 annually.

It's possible the county could rejoin the OCPA and re-enroll customers in unincorporated areas with the agency. Meanwhile, County Supervisor Katrina Foley's office is exploring the possibility of joining a different CCA.

Some of the OCPA's initial backers say it's not too late to save the clean power agency.

"There are a lot of things that are going right," said Kraemer from the O.C. Climate Reality chapter. She noted that residents have a say in how the OCPA operates through their elected representatives on the board. That's not the case with privately owned utilities.

Kraemer recalled years of lobbying O.C. leaders for community choice energy and knocking on residents' doors, many of which, she said, were slammed in her face. She can't imagine starting over with a new CCA.

"There's the potential to shape OCPA like we want to shape it," she said. "But if it fails, we will not ever get the chance to have it again."

Have a question about Orange County?
Jill Replogle wants to know what you wished you knew more about in OC and what’s important to you that’s not getting enough attention.

Updated February 27, 2023 at 2:14 PM PST
This story was updated with new information from Brian Probolsky, the OCPA CEO.
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