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The City of Irvine and Its Residents Need an Immediate Audit of the Orange County Power Authority

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In 2020, the previous Irvine City Council (including now-Mayor Farrah Khan and Councilmembers Anthony Kuo and Mike Carroll) voted to have the City join the multi-city Orange County Power Authority (OCPA) as its electricity provider.

The previous Council also voted to have the City of Irvine fund the energy start-up through the end of 2022 with Irvine taxpayer money. So far, Irvine has advanced $7.7 million to OCPA with no oversight as to how, and how wisely, those taxpayer dollars are being spent.

During her 2020 end-of-the-year recap, Mayor Khan proudly declared that the OCPA would reduce costs of electricity to the City of Irvine and its citizens. And, a 2020 City staff report claimed that the City government itself would save money on its own $5 million per year electricity bill once the City was transferred from the current provider of electricity, Southern California Edison, and enrolled in the new Orange County Power Authority.

The promise of cleaner, cheaper electricity was broken — even before the energy start-up launched in April. Now that rates have been made public, we know that the City of Irvine, Irvine businesses, and Irvine residential households will be paying more for electricity under the new OCPA plans. For example, the City of Irvine itself will pay an additional $394,471 annually for its own electricity needs.

All businesses operating in the City of Irvine were automatically enrolled in OCPA in April, unless they chose to “opt-out.” Six months later, on October 1st, all Irvine residents will be automatically enrolled in the OCPA.

Over the past year, only one member of the City Council (Larry Agran) has asked for a public presentation by OCPA staff to discuss financial and operational questions as well as projections regarding the agency’s future viability. The presentation would allow the Council to understand the full scope of the City’s investment. However, Councilmember Agran’s repeated requests continue to be blocked by Mayor Khan’s “Rule of Two,” which requires a second Councilmember to sign-on to the request to put the matter on the Council agenda.

Understandably, with Irvine businesses forced into the OCPA plan, Councilman Agran has called for an immediate financial audit to help answer the question: Why were we promised lower costs but will instead be paying higher electricity rates? In Agran’s words, “An audit would provide all of us with a detailed understanding of the OCPA’s rate structure and the agency’s overall viability.”

I am a strong supporter of transitioning to cleaner, renewable energy sources when done responsibly. But, the energy field is complicated and financially risky. Even with strong, experienced, and capable leadership, problems can arise. The OCPA Board which consists of six Orange County local elected officials, including Mayor Khan and Councilmember Carroll hired a political consultant with no prior energy experience to run the agency at a base salary of just under $240,000 and another $100,000 or so in benefits and perks. They’re also paying $260,000 to a marketing vendor with no marketing experience.

Councilmember Carroll is in a particularly conflicted position. As Chairman of the OCPA Board, he is in a leadership position of a major quasi-government organization denying its lender (the City of Irvine) information about the faltering nature of the entity while he is also a member of the lender’s controlling board (the Irvine City Council). Mayor Khan is similarly conflicted.

Several cities and counties across California have established “Joint Powers Authority” entities to deliver electricity. Some have been successful, but others have failed. From what I have seen so far, the OCPA appears to have been created as a multi-million-dollar slush fund for political insiders and their consultants, with Irvine taxpayers footing the bill.

Irvine taxpayers are funding this agency and deserve to know what is going on at OCPA, before they are automatically forced into the energy start-up. (Click here to read Agran’s memo to the City Council requesting an immediate audit of the OCPA.)

Franklin J. Lunding

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