Huntington Beach pulls out of troubled Orange County Power Authority

A sharply divided Huntington Beach City Council erased another remnant of previous city leadership during a special meeting Tuesday night, voting 4-3 to exit the city from the Orange County Power Authority.

Mayor Tony Strickland made the motion to withdraw, seconded by Mayor Pro Tem Gracey Van Der Mark. Councilmen Casey McKeon and Pat Burns were the other yes votes, while their council colleagues Dan Kalmick, Natalie Moser and Rhonda Bolton voted against leaving OCPA.

Huntington Beach, one of four founding cities in the Community Choice Energy program, had been contemplating leaving the authority for months. But Tuesday night’s special meeting was called with just 24 hours notice and without a staff report.

McKeon, Huntington Beach’s recently appointed representative on the board of directors of the green energy agency, called OCPA “a total disaster and doomed for failure” from the very beginning.

“I believe in providing choice to consumers, but I do not believe the government is the vehicle to provide choice in the private sector, especially not in the incredibly complex and volatile energy market,” he said. “Despite all of this, the founding cities of OCPA forged ahead with poor decision after poor decision, the worst of which was hiring a CEO with zero experience in the complex and volatile energy sector.”

Last month, OCPA fired that CEO, Brian Probolsky, and replaced him with interim CEO Joe Mosca last week. Probolsky still was in attendance at the meeting Tuesday night.

Huntington Beach’s withdrawal, which is expected to become final in June 2024, leaves Irvine, Fullerton and Buena Park as the three remaining cities in the troubled agency. The county of Orange voted to pull out last December.

Orange County Power Authority board members Donald Wagner, left, Casey McKeon, center, and chairman Fred Jung.

(Scott Smeltzer / Staff Photographer)

OCPA has been subject to several audits, and each of the remaining cities also has considered withdrawing at some point. But with the new board and leadership, there was optimism in the program, which began providing commercial service to Surf City businesses in April 2022 and residential service last October.

Strickland said he made the motion to withdraw from OCPA for many reasons.

“I will not stand by while the OCPA shuffles the chairs on the deck of the Titanic,” he said. “OCPA has spent its entire existence discrediting itself every step of the way.”

Per the City Council’s previous direction, Huntington Beach residents default to the OCPA “basic choice” program, which provides 38% renewable energy — and costs 2% less than Southern California Edison. OCPA also has built up more than $40 million in cash reserves, and Chairman Fred Jung said that number is expected to be $70 million by the end of the fiscal year.

Kalmick pushed back against Strickland’s motion, saying that OCPA is now on the right track.

“There’s no staff report for this,” he said. “We have no idea what this is going to cost. This is absolutely irresponsible ... The base rate is 2% cheaper than Edison, so all of the businesses in Huntington Beach that are enrolled at the base rate are going to see a 2% increase in their electric bill in June of 2024 when we leave. Probably more, because as the power authority keeps purchasing more and more power and longer-term contracts, they’ll have the ability to decrease that amount.”

Kalmick added that if OCPA can’t sell Huntington Beach’s power at a profit, the city would put its residents on the hook for a large amount of money, though Strickland and McKeon both said they don’t believe that will be the case.

Orange County Power Authority board chair Fred Jung at a meeting in March.

(Scott Smeltzer / Staff Photographer)

“The county of Orange’s decision to withdraw from the OCPA in December, and their analysis of the purchase contracts, have shown that we can sell our energy contracts for higher than what they were purchased,” McKeon said.

McKeon was frustrated in recent months that he couldn’t get copies of energy contracts purchased on behalf of Huntington Beach.

“A simple nondisclosure agreement became a four-month pulling teeth process until we finally received the contracts a couple of weeks ago,” he said.

Kalmick, though, noted that Strickland voted for AB 117, which helped make Community Choice Energy programs possible, when he was in the state Assembly in 2002.

“I don’t understand why, if this has no risk to the city currently, we would even begin to contemplate this with no staff input,” Kalmick said. “We’re going to all hold hands and jump off a cliff with no idea what this is going to cost — $50 million, $80 million, who knows?”

A substitute motion by Moser, to get some analysis about what would be required to leave OCPA and understand financial ramifications to the city and its residents, garnered just three of the four votes needed to pass.

Jung, who is also the mayor of Fullerton, called Huntington Beach’s decision to leave OCPA “reckless” in a statement Wednesday.

“Not only does this eliminate the opportunity for Huntington Beach to take bold steps against climate change, it strips away renewable energy choice from its residents and businesses,” he said. “Huntington Beach families and businesses want and deserve an alternative to the decades-long fossil fuels-powered SCE monopoly. Huntington Beach has put politics ahead of the health and well-being of those who call Huntington Beach home.”

Several spoke against leaving OCPA at Tuesday night’s special meeting, including Huntington Beach resident Joclyn Rabbitt-Sire, who is part of the Orange County chapter of the Climate Reality Project.

“I’m shocked,” Rabbitt-Sire said after the meeting. “I’m incensed, really. When the residents truly understand what we’re going to miss and what we’re going to lose, I think they will be incensed too.”