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County Pulls the Plug on OCPA After Audit Reveals Gross Mismanagement and a Continued Lack of Transparency

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Just in time for the holidays, the Orange County Power Authority (OCPA) got a lump of coal in the form of another highly critical review of the agency’s operations, which resulted in the County Supervisors voting to pull the plug on OCPA.
 
The operations audit for the Orange County Board of Supervisors echoed many of the concerns outlined in last year’s Orange County Grand Jury report: unqualified leadership and staff; lack of transparency; dysfunctional management; and higher-than-promised electricity rates.
 
The County’s audit also revealed that a whopping 20.4% of OCPA customers have opted-out, choosing to remain with Southern California Edison (SCE). That is triple the average opt-out rate statewide among similar agencies. The loss of electricity sales, or “load loss,” was 16.5%, nearly double the 8.5% that OCPA estimated in its pre-launch planning.
 
The auditors for the County blasted the OCPA for offering rates that are significantly higher than SCE rates, and making rate information difficult for ratepayers to find.

A companion financial audit performed by the County staff was stymied by the OCPA’s withholding of information. “OCPA did not provide us with the documentation necessary to evaluate whether controls over the disbursements and human resources processes were adequate,” the staff reported. “Specifically, $21.6 million (96%) of the $22.5 million in disbursements reviewed were energy-related and OCPA indicated they could not provide us with supporting documentation.” The 4% the auditors were able to review showed insufficient documentation of bids, vendor selection process, and costs of services, they said.

Orange County Supervisor Katrina Foley, whose district includes Irvine, called the County audit “very concerning.” The following week, Supervisor Foley joined County Board Chairman Doug Chaffee and Supervisor Lisa Bartlett to pull out of OCPA.

Meanwhile, support for OCPA is continuing to erode in Irvine and Huntington Beach, the two largest members of the agency. In 2019, Irvine established the OCPA and put up $7.75 million in cash and guaranteed $35 million in credit to get it started. None of the other three member cities (Huntington Beach, Buena Park, and Fullerton) nor the County committed funds to join.

In Irvine, virtually all City Hall watchers expect Mayor Farrah Khan and Councilmember Mike Carroll to not seek reappointment to the OCPA board in January. New Councilmember Kathleen Treseder has said she would like to be appointed to the OCPA Board. Treseder has been a vocal critic of OCPA’s CEO Brian Probolsky and of Mayor Khan’s role within the agency.

In Huntington Beach, the new City Council majority that ran on a platform that included opposition to OCPA, is expected to replace Councilmember Dan Kalmick, who has supported the agency and Huntington Beach’s role in it.

With the County now leaving, Huntington Beach and Irvine having second thoughts, and two other audits currently underway — by the City of Irvine and the California State Auditor’s Office — it seems an open question as to how long OCPA can keep its own lights on, let alone ratepayers’.

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