Huntington Beach City Council members Tuesday evening will discuss a proposal to withdraw from the fledgling Orange County Power Authority, another blow to the new agency, which lost the county of Orange as a member late last year.
Mayor Tony Strickland called for the special meeting to consider withdrawing from the authority. The move comes 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.
A message left with power authority officials Tuesday was not returned.
Huntington Beach City Councilman Dan 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 considering “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 of 2024 and it could cost the city money and invite lawsuits.
“And is Edison ready to take back Huntington Beach at this point?” Kalmick said.
If Edison has to acquire power on short notice it will cost more money, he 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.
Kalmick said he believes the city should stay in it.
“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.