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State Audit Reveals Mismanagement, Deception, and Financial Instability at Orange County Power Authority (OCPA)

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For the fourth time in less than a year, an investigation of the Orange County Power Authority (OCPA) has revealed severe management and transparency problems — and possible financial peril — triggering calls by State officials for the agency to quickly change its practices or face State action.

The audit report by the State Auditor’s Office, requested by the Joint Legislative Audit Committee, concluded that:

  • OCPA’s deceptive marketing and public relations and lack of transparency caused a loss of public confidence in the agency that has resulted in a residential participation rate of just 77%.
     
  • OCPA’s contracting was not competitive and violated its own policies as well as State rules.
     
  • OCPA does not have sufficient qualified staff to properly oversee its operations, especially its multi-million-dollar contracting for electricity.
     
  • OCPA has not fulfilled its promises of cheaper green energy or investment in community energy-efficiency programs.
     
  • OCPA has been slow or unresponsive in providing public information requested by board members, member cities, and the public.

The report prompted calls from three Orange County state senators for immediate reforms at the OCPA. State Senator Tom Umberg (D-Santa Ana) said the agency has been “deceptive” and “hiding the ball from the public to which it is accountable.” Senator Josh Newman (D-Fullerton) also called the OCPA deceptive and said it has shown “a level of mismanagement bordering on misconduct.”

The strongest statement came from State Senator Dave Min (D-Irvine), who called for the immediate resignation or removal of agency CEO Brian Probolsky and said if OCPA doesn’t clean up its act, he will ask the State to intervene “to protect the taxpayers and ratepayers we represent.”

Locally, the report sparked a debate at the February 28th Irvine City Council meeting.
 
“This is a train wreck,” said Councilmember Larry Agran, who has been highly critical of the OCPA since rejoining the Council two years ago. Until very recently, Agran’s concerns were stifled by his Council colleagues.

Agran noted that the City government — as a major electricity customer — has been paying $100,000 more per month since switching to OCPA last April. Agran has advocated for the City to transfer back to Southern California Edison (SCE) at the 100% renewable option, which would keep Irvine aligned with its ambitious climate goals while saving the City’s taxpayers more than $100,000 each month.

Agran said: “We’re just burning taxpayer dollars and getting absolutely nothing for it.”

Councilmember Mike Carroll — who formerly chaired the OCPA board — asked that the Council request immediate repayment of the $7.75 million Irvine loaned the OCPA to get it started.
 
During the Council’s discussion, Councilmember Kathleen Treseder — who currently serves as Vice Chair of the OCPA board — said that if OCPA’s CEO Brian Probolsky is not removed by April, she would support the City’s withdrawal from the agency. It is worth noting that just two months ago, Treseder publicly stated that Probolsky needed to be fired by the end of January or she would vote to pull Irvine out of the OCPA.

“The main question about the OCPA is, what’s the prognosis?” said Agran, asking whether the agency can change or even survive. “Meanwhile, it’s our taxpayers and our ratepayers who are suffering from the broken promises.”

In the end, Councilmember Carroll’s proposal to have OCPA repay the City was only supported by Councilmember Agran.

However, the Council did vote 4-1 to seek an agreement with OCPA to let the City review the agency’s power purchasing contracts. (Treseder voted NO.)

Roger Bloom

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