An audit of the newly formed Orange County Power Authority released Monday showed the utility had twice as many as the state average of customers opting out of it and questioned whether it could deliver competitive rates.
City News Service obtained the report through a public records act request. The Orange County Board of Supervisors commissioned the report in August when it was proposed the county withdraw from the Joint Powers Authority establishing it.
The supervisors will again consider withdrawing from the authority at their next meeting Dec. 20.
Local Power LLC of Massachusetts conducted the report for Board of Supervisors. The company reviewed the authority from September to mid-November.
The authority was structured so commercial and independent residential customers in Buena Park, Fullerton, Huntington Beach and unincorporated areas of the county would all be included unless they opted out.
The authority projected 8.5% would opt out, but the rate is at 16.5%, according to the report. That is nearly three times the average of the 19 other Community Choice Aggregation operations in California.
The report also found that the “agency’s launch brought rate increases above” Southern California Edison “in its default products to both its commercial customers and its residential customers.”
Local Power faulted the authority for failing to use “best practices in developing and administering communication materials to customers about rates and opt-out notifications.”
Local Power also found that most of the authority’s staff lack “expertise” needed and that “job roles and responsibilities of staff are commingles with multiple other roles, which are not necessarily in line with (industry) best practices.”
The authority “relies heavily on external contractors for industry expertise” when it is considered better to develop that in-house, according to the report.
The Local Power report also noted that “ongoing media coverage and audits calling into question the operations and management” of the authority heightens the risk of more customers opting out. Community Choice Aggregation authorities are designed to increase the use of renewable energy and to scale up to reduce costs, according to the report.
Officials with the authority, however, argue that Edison is poised to seek a substantial rate increase in January, which would keep the authority’s rates competitive, according to the report.
The authority was criticized in the report for not making it clearer to customers how to opt out of its service and how to make an informed decision. Customers are not given a clear enough picture about rates or renewables levels, the report said.