Calls To Oust CEO Of OC’s Green Power Agency Mount Following State Audit

A new state audit of the Orange County Power Authority (OCPA) found a lack of transparency in marketing and financial services contracts at the beleaguered clean power agency. The audit also called into question the agency’s financial health.

"OCPA demonstrated a pattern of contracting practices that were noncompetitive and that reduced accountability by repeatedly circumventing and violating its own policies,” wrote Grant Parks, California state auditor, in a letter to the governor and state legislative leaders.

The findings released on Tuesday raise questions about whether OCPA customers are receiving the highest quality professional services available, Parks said.

The OCPA is a community choice energy provider that buys mostly renewable power on behalf of customers in Buena Park, Fullerton, Huntington Beach and Irvine. The Orange County Board of Supervisors had also planned to enroll customers in incorporated parts of the county in the OCPA, but pulled out in December citing a lack of confidence in agency leadership.

Supporters say the OCPA is a powerful tool for fighting climate change by investing in renewable energy and reinvesting profits from energy sales back into the community in the form of things like energy efficiency projects and environmental justice grants.

But it’s faced serious headwinds in recent months. The state audit comes on the heels of several previous audits and a grand jury report that were highly critical of the agency's management, transparency, and communication with customers and member communities.

The audit was requested last year by a group of state lawmakers from O.C. districts, including state Sen. David Min, who represents Irvine and part of Huntington Beach. Min called the new audit "shocking but incomplete" and said he would ask the OCPA's board of directors to authorize an independent investigation into the agency’s contracting practices.

"They have to look into these transactions in more detail," he said. "They raise serious questions of civil and criminal liability in my mind."

Min also told LAist on Tuesday that OCPA CEO Brian Probolsky should resign or be fired immediately.

He’s not the first to ask for Probolsky’s ouster. A coalition of environmental and Democratic groups recently sent a letter to the OCPA board demanding that Probolsky be removed. Irvine City councilmember Kathleen Treseder, one of two councilmembers who represent the city on the OCPA board, said at a city council meeting this week that she’ll vote for Irvine to exit the OCPA if Probolsky isn’t gone by April.

In an interview with LAist, Probolsky said he was proud of the agency's accomplishments and intends to continue leading it.

"We're now a $300 million agency, operating in the black, generating reserves, making the biggest dent in climate for the county of Orange — we're the only agency making a dent in climate for the county of Orange — and successful by all metrics," he said.

What did the audit find?

• The OCPA "demonstrated a pattern" of noncompetitive contracting, including splitting contracts to avoid triggering the need for approval from the board of directors.
• The agency’s budget projections have been unreliable because of a weakness in planning and data. 
• Unusually high customer opt-out rates — three times the state average — could significantly impact the agency's bottom line. The OCPA's chief financial officer noted that the agency may be able to mitigate this problem by selling off power and buying less in the future to compensate for overestimated demand. 

Read the full audit here.

Audit recommendations

• Improve communication with current and potential customers, starting with overhauling OCPA's website.
• Improve tracking and handling of public records requests.
• Hire a power purchase director to oversee contractors, evaluate power purchase agreements and update power needs.
• Enforce internal policies requiring board oversight of contracts.
• Improve documentation of contract bids and contractor performance.
• Develop a policy on sharing power purchase information with member cities.
• Strengthen the OCPA's risk oversight committee and insure the board of directors is regularly updated on the agency's market and credit risks.

What the audit didn't address

Citing cost limitations, the audit did not address a key concern that has been repeatedly voiced by local public officials, state legislators, citizen watchdogs and previous audits: Is the OCPA viable in the long-term? The auditor said cost limitations prevented them from fully examining the issue, as had been requested by state legislators.

Tiffany Law, OCPA's chief financial officer, said she projects the agency will have about $53 million in reserves by the end of 2023.

The audit also didn't address legislators' initial question about whether the agency has adequate hiring standards for OCPA officers. CEO Probolsky and the former chief operating officer were both the sole candidates presented to the board for their respective jobs in January 2021.

Since then, Probolsky told LAist, all subsequent job opportunities have been publicly noticed and had multiple candidates.

Plans for improvement

Probolsky said his staff is working on an improvement plan in response to the state audit and previous county recommendations for reform. He said they have already completed nearly 40% of the recommendations. The plan will be presented at the next OCPA board meeting in March.

Fullerton Mayor Fred Jung, who chairs the OCPA Board of Directors, said he was confident that the agency has been moving in the right direction since the new board took over in January.

"Are there mistakes that were made? Absolutely," Jung said, referring to the OCPA's first few years of operation. He said the agency now has a robust staff and noted that the board has made several recent changes, including the decision to look for new legal counsel.

"The board will make every change that's required to make sure the agency is establishing public trust in real time," he said. Fullerton has no plans to pull out of the agency, nor does Buena Park. Huntington Beach is considering an exit, and Irvine is sticking with the agency for now.