The vote was 4-0, with Councilmember Mike Carroll absent. (Carroll is the chairman of OCPA’s board of directors.)
“There are questions that need answering right away,” said Councilmember Larry Agran in making the motion for the audit. Agran continued: “We need to determine what’s happening with OCPA and whether it’s even viable.”
Four hours after Irvine’s action, the City Council of OCPA-member Huntington Beach voted to support Irvine’s audit and also passed a motion of no-confidence in the Power Authority’s CEO, Brian Probolsky. Those votes were 5-0 and 4-1, respectively, with two members absent.
The crisis at OCPA has been building since its inception in 2019. The agency was created by a vote of the Irvine City Council at the urging of then-Councilmember and now-Mayor Farrah Khan. Irvine would go on to loan OCPA $7.7 million in City funds directly and underwrite a line of credit from Union Bank for another $35 million, to cover start-up operations until OCPA could begin providing power and collecting revenue.
At the time, the new Power Authority was promoted by Khan, Carroll and others as an alternative power provider to Southern California Edison (SCE) that would supply electricity from renewable sources at lower costs than SCE. OCPA was originally composed of the cities of Irvine, Huntington Beach, Fullerton, Lake Forest and Buena Park. Lake Forest soon withdrew; the County of Orange joined last year. Irvine, however, remains the sole funder of OCPA.
At its first meeting, the OCPA board selected Carroll as chairman and soon hired Probolsky — a Republican political operative — as CEO, even though he had no experience in the energy industry.
Some critics, including Agran — who was elected to the City Council in 2020 — soon began pointing out red flags in the Power Authority’s financial projections; failure to make public progress reports or updates; and lack of transparency in its management, contracting and decision-making.
In December of last year, the only OCPA administrator with energy industry experience, Chief Operating Officer Antonia Castro-Graham, abruptly resigned without explanation.
In January, the OCPA board released the rates it would be charging when it rolled out power service this year. Contrary to earlier promises, those rates were equal to or higher than SCE rates.
In April, OCPA began service to business customers in its member cities. Irvine business ratepayers were switched automatically into the Power Authority’s most expensive service tier unless they contacted OCPA to opt for less expensive service or to remain with SCE.
In Irvine, there was widespread confusion and many complaints from business customers that they did not have adequate warning and were not able to get information on their options.
Then, on May 31st, OCPA erupted into a public civil war. Board member and Huntington Beach City Councilmember Dan Kalmick and three other board members submitted a request for a special OCPA board meeting to discuss possibly terminating Probolsky. Three hours later, Probolsky filed a formal complaint alleging misdeeds by Kalmick and other board members while claiming whistleblower protection from termination.
As the chaos unfolded, Agran made his fourth request in the past year for a Council review of OCPA. Agran’s three previous requests died for lack of a second from any of his Council colleagues which include Khan and Carroll, along with Vice Mayor Anthony Kuo and Councilmember Tammy Kim. But, this time Khan seconded Agran’s request.
At Tuesday’s meeting, Agran noted that OCPA is scheduled to start service to residential customers on October 1st, with all Irvine ratepayers being automatically switched from SCE into the Power Authority’s most expensive rate plan.
In addition to initiating an audit, Agran’s motion directed City Manager Oliver Chi to hire special legal counsel and also engage a consultant with energy expertise “to advise on the viability of OCPA … (and) minimize any City losses.” Moreover, Chi was directed to provide a progress report on the audit at the June 28th special meeting of the Irvine City Council.