OC Power Board Chair Rips Huntington Beach Withdrawal from Agency

huntington beach sign

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HUNTINGTON BEACH (CNS) - The chairman of the Orange County Power Authority board blasted Huntington Beach officials Wednesday for voting to withdraw from the fledgling agency.

Fred Jung, chairman of the agency's board as well as Fullerton's mayor, issued a statement saying the authority was "deeply disappointed with the reckless action the Huntington Beach City Council has taken to withdraw from the Orange County Power Authority. 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."

Jung warned that Southern California Edison had plans to "increase electricity rates another 45% by 2020. By choosing to stay with OCPA, Huntington Beach businesses and residents have the ability to select OCPA's Basic Choice renewable energy plan, which costs 2% less than SCE and offers more renewable energy."

Jung said the city's residents "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."

Huntington Beach Mayor Tony Strickland issued a statement saying the agency "has been a disaster from day one."

He added, "I don't need to reiterate all of the problems, first and foremost being the agency's lack of transparency and unqualified leadership, which is evidenced by both the state and county audits, as well as whistleblower complaints."

The mayor said the agency "doesn't even meet the state's minimum Renewables Portfolio Standard. They can say their energy is green, but the facts show otherwise. After disagreeing with county officials, who also decided to opt out of the OCPA, I believe this is the right time to withdraw. I have an obligation to protect the residents of Huntington Beach and to act in their best interest, whichever way you look at it, the OCPA isn't good for Huntington Beach."

The city council voted 4-3 on Tuesday night to withdraw. Council Members Gracey Van Der Mark, Pat Burns and Casey McKeon sided with Strickland. Council Members Dan Kalmick, Natalie Moser and Rhonda Bolton voted no.

The move came weeks after Brian Probolsky was pushed out as the agency's CEO and replaced by interim CEO Joe Mosca, who had been a public relations director of the agency.

Kalmick said the special meeting was unexpected.

"No one knew this was coming, which is horrible for business," Kalmick said. "Businesses don't like surprises and this is a surprise to everyone."

The move to exit the agency was surprising "now that they've fixed 90% of the issues enumerated in the audits," Kalmick said. "And there's new management coming on board."

Kalmick said he believes the city cannot get out of the agency until July 2024 and added that the move could cost the city money and invite lawsuits.

"And is Edison ready to take back Huntington Beach at this point?" Kalmick said.

"If the city pulls out Edison would be 2% more expensive -- at least," Kalmick said. "I have no idea what this would cost. And there's a whole set of legal stuff that has to happen for us to withdraw."

It was easier for the county to withdraw in December because it had not yet taken any power from the authority, Kalmick said.

"I think the power authority is in good shape and the fundamentals have always been good so I don't quite understand what the need is to leave," Kalmick said. "There's no staff report so it's unclear what is actually going on here."

Orange County Board Chairman Don Wagner, who also serves on the power authority's board, said he understood the request.

"I certainly understand the desire to withdraw," Wagner said. "The county's analysis following our giving notice of withdrawal shows that the power contracts are more valuable now than when purchased, so can be sold without a loss to the agency. That means it's the right time for any city to get out of an organization that is, unfortunately in my view, no longer sustainable."

The other cities in the agency are Fullerton, Buena Park and Irvine.

A state audit of the agency was critical of how many customers it was losing and cited issues with transparency. The state audit followed two other critical audits.

The agency was founded as a Community Choice Aggregator, which aims to increase the use of renewable energy and scale up to reduce costs. The authority was knocked in the state audit for not making it clearer to customers on how they can opt out and make informed decisions.

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