The Orange County Power Authority is suing the county for nearly $1 million in costs it says are associated with the Board of Supervisors’ 2022 decision to withdraw from the agency.
The OCPA filed the breach-of-contract lawsuit Jan. 23 in OC Superior Court, alleging the county failed to pay $913,360 in expenses incurred by its exit from the authority, including for “customer notices, legal fees and other administrative costs.”
Under the agency’s Joint Powers Agreement, participating municipalities are responsible “for any damages, losses or costs incurred by OCPA that were a result of the party’s withdrawal or termination … including, but not limited to, costs arising from the resale of capacity, electricity or any attribute thereof no longer needed to serve such party’s load.”
The complaint alleges the OCPA purchased electricity for “anticipated customers within the unincorporated area of the county for November and December 2023.” Because the county had terminated its membership by mid-2023, the lawsuit claimed that OCPA was saddled with “stranded costs” because it “could not resell” the electricity or “otherwise mitigate those costs.”
Launched in 2020 with a startup loan from Irvine, the OCPA is a community choice aggregator, which is allowed by the state as an alternative for more locally governed, clean-energy providers over investor-owned utilities such as Southern California Edison. Buena Park, Fullerton and Huntington Beach were also early joiners of the community choice energy program, though Huntington Beach has since left.
In its early years, the clean-energy agency was besieged by transparency issues. Amid state and local audits into OCPA’s contract management and pricing strategies, the OC Board of Supervisors voted 3-2 in December 2022 to remove the county’s unincorporated areas from the authority. The board had voted to join the OCPA’s community choice aggregation program only a year earlier.
Huntington Beach did likewise in May 2023. Irvine, the power authority’s founding city, threatened to withdraw in late 2024 before ultimately choosing to stay last September.
OCPA has since selected a new CEO, Joe Mosca, and implemented several changes recommended by auditors. Buena Park, Fullerton and, most recently, Fountain Valley are enrolled in the agency’s community choice program, with Costa Mesa also considering joining. 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.
The OC Board of Supervisors unanimously voted Tuesday, Feb. 10, to hire the law firm Stradling, Yocca, Carlson & Rauth and partner Allison Burns to represent the county in the lawsuit. County spokesperson Molly Nelson said the board could not comment about pending litigation.
The power authority is represented by the law firm Best Best & Krieger.