Irvine residents have criticized the transparency of a newly-released operational review of the Orange County Power Authority, which linked the power agency’s high residential opt-out rates to the frequency of negative press about the agency.
The report also found that OCPA’s electricity rates are competitive with Southern California Edison, but presented data to indicate that the agency is severely understaffed. The report also mentioned that the agency was expected to have a $41 million surplus at the end of the fiscal year.
Ultimately, the report found that the newly formed power agency was operating under regulatory standards, following several audits focusing on issues of transparency and leadership within the agency.
However, the highly anticipated operational review drew concerns from the public, along with the members of the Irvine City Council, when it was discovered that EES Consulting, Inc., worked as a paid consultant for the OCPA during the agency’s initial launch, but did not disclose the relationship in the report.
The report, presented to the council by EES Consulting, Inc., on Tuesday, April 11, was requested in June as part of the Council’s focus to investigate the agency, and is the latest in a series of four state and local audits involving the infant power broker.
While the EES report found no operational wrongdoing in relation to the business practices of the OCPA, the producers of the operational review continually referenced “negative press” as the primary source of the considerably high opt-out rates for residential customers.
In fact, Gary Seleba, Executive Consultant with EES Consulting, said that the agency’s call centers have reported higher volumes of opt-outs from customers, based on the frequency of news coverage.
“OCPA’s data management and call center operations drew a correlation between negative press and customer calls and customer opt out requests,” Seleba said. “The negative press that they’re getting — deserved or not — is the problem. That’s got to be fixed somehow – negative press needs to get calmed down somehow for OCPA to succeed.”
Seleba added the working relationship between OCPA and EES Consulting was disclosed to Irvine City Manager Oliver Chi prior to being approved. Still, Council Member Dr. Kathleen Treseder questioned why the relationship between OCPA and EES was not disclosed in the final report.
“I hadn’t realized you had been paid by OCPA,” Treseder said. “Did you include that as a disclosure in the report at all?”
Seleba responded: “I don’t think it was in the final report. We were the start up consultants back five years ago, when the City of Irvine looked at CCAs (Community Choice Aggregations), we were the ones that helped the City of Irvine make the decision on that. When the JPA was formed we did work as a start up – we got their regulatory stuff filed, helped them hire staff, got consultants on board full-time,” Seleba explained.
In an effort to further clarify EES’s involvement, Chi explained that he was aware of the prior relationship and added that it does not pose a conflict of interest.
“EES did disclose to us that they were working for the Power Authority – it was initially a city contract that transitioned to the power authority once the entity was launched. They aren’t currently working with the city,” Chi explained. “We were having tremendous difficulty getting public information and data from the Power Authority and that’s absolutely a concern.”
Irvine Vice Mayor Tammy Kim, who serves on the OCPA Board with Treseder, said that staff is working to address the concerns of the previous audits. Kim added that negative press not only affects customer opt-out rates, but also has an impact on employment recruitment.
“On the board we have been taking active steps to address the serious shortcomings identified by the Grand Jury, as well as the state audit,” she said. “While our intentions with this report were honestly made with a bit of healthy skepticism about what we might find, I think this expert analysis provides crucial third party validation about many of the previous under-reported aspects of OCPA, which includes that the rates are competitive with other CCAs.”
The next Orange County Power Authority Board Meeting will be held on Wednesday, April 19. The meeting will be streamed via Zoom.
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