Nine months ago, the beleaguered Orange County Power Authority was in danger of losing 65% of its customers, after Irvine threatened to withdraw from the nonprofit agency.
Now, with the founding city voting to stay and new cities considering joining, the clean energy provider has seemingly turned its fortunes around.
Costa Mesa leaders will discuss an ordinance next month to enroll in the agency’s community choice aggregation program, which will allow the power authority to purchase electricity on behalf of Costa Mesa’s 50,000 residential and commercial customers.
A final vote is set for the end of the year, with a potential launch date planned for March 2027.
Buena Park, Fullerton and, most recently, Fountain Valley are also enrolled in the power authority, which launched in 2020 with a startup loan from Irvine.
Irvine City Councilmember Kathleen Treseder, who served on the OCPA board, said the power authority is helping the city achieve its goal of becoming carbon neutral by 2040.
“When the city was on the ‘100% renewable’ plan, our greenhouse gas production went down to minimal,” she said. “That’s a huge change that can happen quickly with very little cost to residents.”
Treseder said the agency’s community reinvestments have generated cost savings for Irvine ratepayers. A $1,000 rebate for home battery storage and EV chargers has been particularly popular among residents, she said.
The power authority presents itself as a more affordable alternative and a better option for people who put a priority on using cleaner energy sources than investor-owned utilities such as Southern California Edison. SCE’s rates have increased 85% in the last decade, according to the California Public Utilities Commission, and more than 800,000 customers statewide are currently $1,000 behind on their electricity bills.
Joe Mosca, OCPA’s chief executive officer, said the agency has had “very positive conversations” with multiple other OC cities that he hopes to bring on board.
“The more cities we have, the more customers we are buying for, the lower the cost of energy,” he said.
Under the community choice energy model, member cities can choose one of three “default” energy options that residents and commercial customers in their boundaries will be enrolled in: a basic plan that’s 47% renewable energy and 3% cheaper than Edison’s rate; a smart choice plan that’s 55% renewable and 40% carbon-free; and a 100% renewable energy plan. The latter two plans cost slightly more than Edison’s rates.
Edison still charges OCPA customers a transmission and delivery rate.
Most cities chose the basic plan as the default for the residents and businesses brought over to the OCPA; customers can choose to enroll in the tier of their choice, as well as opt out and stay with SCE.
There are 25 community choice programs in California serving more than 14 million customers and supplying about a quarter of the state’s energy load.
With the addition of Costa Mesa’s ratepayers, OCPA officials said they would anticipate an operating margin of $11 million by the end of the 2027-28 season, its first full year of service in that city. The estimated revenue is $75.1 million and total operating expenses $64.1 million.
Costa Mesa had considered joining the power authority the year it was established, but declined as the agency struggled with questions and criticism about its direction and leadership.
State and local audits of OCPA’s contract management, pricing strategies and transparency led Huntington Beach and the county of Orange to withdraw from the agency in 2023. The agency has since brought on a new CEO.
In December, the Irvine City Council voted unanimously to withdraw from the power authority due to transparency concerns over rate increases, which were caused by price volatility in the energy market, both Treseder and Mosca said. Irvine initially enrolled its ratepayers in the 100% renewable power plan by default, but opted down to basic choice this year to protect them from price shocks.
Mosca said the agency implemented a plan to address all the issues raised in the audits and has made significant improvements in the past year.
Treseder said the agency has markedly improved its communication with Irvine officials since last year, and now schedules weekly meetings with the city manager.
Still, some residents and elected officials have reservations about joining the power authority.
Costa Mesa Councilmember Manuel Chavez said at a Sept. 2 council meeting that he wanted to ensure the city’s membership brings actual cost savings for residents.
“While I do appreciate the ability for (community choice aggregation programs) to be hubs for renewable energy, my only focus is affordability,” he said. “It’s the only thing that matters to me when it comes to joining OCPA.”