Orange County Power Authority Operating in the Dark
There was great excitement when the City of Irvine, after several years of effort by local environmental activists, agreed to create a Community Choice Aggregation (CCA) agency and invite other Orange County cities to join in a Joint Power Authority (JPA). This was rightfully hailed as a big step toward greater community control, lower energy costs, and a significant move toward more renewable energy sources. All good.
Questionable Ethics
The newly formed Orange County Power Authority (OCPA) has already made a number of controversial decisions. The selection of Mike Carroll as Chair after accusations of misappropriation of city funds to benefit his re-election campaign, the selection of CEO, Brian S. Probolsky who has a history of questionable ethics. Then there was the failure to provide videos of multiple OCPA board meetings, the failure to post-meeting minutes, and the approval of several multi-million contracts with little contractual information made public in advance.
Several Irvine Watchdog volunteers have issued multiple written communications to the OCPA, its Chair, and the General Counsel regarding the lack of transparency and the requirement that they comply with the Brown Act as a minimum expectation. These requests and comments went unanswered.
OCPA Plays Hide and Seek with Millions of Taxpayer Dollars
At the OCPA meeting on June 22, 2021, the staff presented a proposal to approve a $14,000,000 contract to Calpine Energy Solutions for Data Management and Customer Call Center Services The staff report and backup material for agenda item 5.1 was only 2 ½ pages long. It is common for this type of draft contract to be hundreds of pages long.
Thank goodness some of our most committed local environmental activists were paying attention. During public comments, [see video at 25:00] several members of the public called out staff and the board for the prior practice of approving contracts with very little public oversight and transparency. They also requested that draft contracts be provided, in their entirety, to the Board and the public prior to any final board approval. One member of the public said, and I am paraphrasing:
This is a “community” power authority, and we expect more than just the bare minimum transparency required under the law.
After being called out on the record, the Board agreed to have the $14 million contract under discussion and future draft contracts made available to the public prior to any vote for approval.
Public oversight and watchdogs are critical to ensure that government bodies operate in full view. The Orange County Power Authority has demonstrated its willingness to operate in the dark, provide as little information as legally required, and make staffing and procedural decisions that are cause for concern for good government advocates. The hundreds of dedicated and hard-working volunteer activists that helped carve the path for this agency to exist deserve much better. We all deserve much better from the OCPA.
Follow the Money
While the mission of the OCPA may be critically important, this new government body is off to a rocky ethical start and the millions of dollars in taxpayer money has only begun to flow. Consultants are salivating at the future opportunities to feed from this public trough.
There is often a reason that public bodies try to operate in the dark and play hide and seek with contracts and public information. Follow the money.
How to Participate in OCPA Meetings
The OCPA meets the second Tuesday every month at 10:00 AM. The public can provide comments at: comments@ocpower.org. The meetings are available on Zoom and public comments on agenda items and general comments are allowed as required by the Brown Act.
#
Have a Confidential Tip? Email: IrvineWatchdog@photonmail.com
Proton Mail offers encrypted email services. The company is based in Switzerland and is thus governed by the Swiss Federal Data Protection Act. All emails sent through the service are considered personal data.
5 Comments
Branda Lin
June 27, 2021 at 12:00 pmEven more shocking is the fact that OCPA CEO Brian Probolsky recommended that the board delegate authority to him and staff to negotiate and execute a $50 million credit facility without providing any details on the terms or conditions. A Community Choice program in western Riverside declared bankruptcy in May and is now shutting down, partly because it agreed to a similar credit facility that led to higher customer rates and ultimately to its demise. I’m thankful some of the public comments mentioned this.
Probolsky does not have experience in the energy industry, and it’s not clear what his qualifications are other than being the brother of OC political operative Adam Probolsky. And he is the CEO making over $250k in Irvine tax dollars. These developments are very concerning.
Sylvia Walker
June 28, 2021 at 11:47 amThe public comment section at the end of this meeting is also quite informative (starting at about 1:43:30).
The public commenter said that the activist groups have supported formation of a CCE in OC and now expect more transparency than has occurred with OCPA at this point. In particular, they want a revisit of the OCPA agreements with emphasis on how OCPA board membership and term lengths are determined as well as how contracts are authorized.
In general, the commenter said that these groups that have put so much effort into the establishment of a JPA for Orange County are concerned that the OCPA is currently not as community-centered as it should be and want changes to take place that would put the community as the central focus and include greater transparency.
Sylvia Walker
June 28, 2021 at 11:48 amBoardmember Sonne (Buena Park) also made comments requesting a look at board of director terms, because currently board members can remain even after they are no longer in office as city council members. She had concerns about this as well as a few other OCPA matters.
Katherine Daigle
July 6, 2021 at 8:20 pmVery impressive reporting. I watched a recent video conference that had approximately 7 people in attendance, I believe. Probolsky with his CEO hat and no experience in energy HE should have at least 5-10 years of industry experience in clean energy. As with most green energy projects in California they have been fraught with fraud and has bankrupted many cities. Probolsky has a political Data management small business, he would be beneficial just managing a call center it is possible with his small business background in marketing and as a political pollster, it would be a much better fit rather than tackling a massive project which could possibly ruin his future family business. Much like Mike Carroll’s family business which he has already ruined with his misappropriating taxpayer’s hard-earned money.
Mike Carroll and appointed city councilperson and chairman of this CCE that took our hard-earned money during COVID19 – $75,000 of tax payers money last year. After whining that it was not enough he and Kim along with Khan decided it should be $125,000 to run his platform and it is “my money to do with as I see fit”. Now as the Chairperson of this Multimillion-dollar project with absolutely no leadership skills or background in community energy projects, except as a small-town attorney that neither works for a major law firm and only has his office, I am not sure what his entrepreneur family-owned business has any energy projects on a government level but I do not see this is his forte either. As a lawyer, you would expect this type of person would not succumb to fraud, however, by his own admission, he admitted to stealing this money during the COVID19 Pandemic, and fired his staff so he can use that money for his political mailers.
Now there was a bright light in the small conference board room, Buena Park council Susan Sonne. Susan brought up why there was no contract based on their evening discussion and why were they rushing to execute a contract of $14.5M with no oversight outside of this scarce OCPA BOARD? She also questioned based on the 2 or 3 bullet points on a sheet of paper no terms or conditions, liability, etc… these types of agreements run into the hundreds of pages. When I was a contract negotiator for 21 years for Big Pharma I reviewed contracts that took months to negotiate and were worth millions. I worked with a team of very seasoned staff who would get approvals for every piece of a project including the managers for data to be used, contingencies if there was an act of God, human capital for our survey group which had to have a commitment of staff to manage incoming and outgoing calls that were U.S. based -NOT overseas where there would be a language barrier, many other data points would have to be in that contract. Additionally, opt-in and opt-out as we have a SPAM law and we are in California where there are restrictions of marketing – Probolsky. It was very comforting to hear a few more bright people Ayn Craciun in our Climate Action community well versed in what may be necessary to accomplish this massive undertaking. They seemed to know more than the two top execs sitting in the room pretending to understand what was being said by Ayn, an excellent understanding of contracts and the community.
Then there was a brief conversation over a line of credit from banks – I believe JP Morgan was mentioned and a standard 20M to a $50M with no oversight or discussion of how this would be spent or repaid if the project like so many in California would go bankrupt and take the city with it.
This small group of politicians has no history or background in CCE or OCPA energy projects, the size and scope have not been identified nor the initial processes been fulfilled. We are the taxpayers and we need to have oversight and the options to have the contracts available before execution.
I personally have the consultant’s agreements that Mayor Shea had signed off – the MRW feasibility studies where they provided the outcomes for customers opting into this program. MRW concluded “CCE rate savings, 0.5% to 2.0%,” The Study shows that the savings in the first years (2022-2025) are lower than the later years (2026-2030). “These lower margins in the early years could create challenges in getting financing without Irvine or other Joint Powers Authority (JPA) members providing collateral to backstop the financing. For example, the experience of the most recent large CCE formed, San Diego Clean Power (SDCP), is instructive of what is currently required for CCE. Because of its projected narrow operating margin—which
is similar to that shown in the Study—and general uncertainties facing CCAs, SDCP’s finance provider required SDCP to have $5 million in collateral in order for it to provide a $5 million pre-launch loan plus a $35 million line of credit.”
Final outcome – Given current conditions, Irvine (or any jurisdictions with whom Irvine might form a
JPA) will likely be called upon to provide collateral to backstop the CCE’s financing.
There were a number of RFP’s and several hundred thousand dollars spent on the viability years ago. One very important lesson learned at the very least we spent that money wisely, however, these thieves are going to push this through and you the taxpayer will pay for it, forever. This city will never see our financial future as bright as this will be another: Robert Lafee Citron was a longtime Treasurer-Tax Collector of Orange County, California, when it declared Chapter 9 bankruptcy on December 6, 1994.
The accountability and responsibility of these two charlatans cannot be emphasized enough – request a copy from the City or myself of the MRW feasibility study and September 25, 2018
TITLE: PROPOSAL SELECTIONS AND BUDGET ADJUSTMENT FOR COMMUNITY CHOICE ENERGY FEASIBILITY STUDY AND STRATEGIC ENERGY PLAN more than 500 pages and an extremely detailed account of energy outcomes and financial responsibility.
WHERE are these contracts, RFP’s, and Gany charts for managing this project!
FYI: Energy needs storage, Wildfires will disrupt and we will have blackouts – Do You All Remember Last Year
Dee Fox
July 8, 2021 at 11:44 amThe Residents and Businesses in Irvine and Cities that have joined the Orange County Joint Power Authority (OCJPA) need to pay ATTENTION! You are all going to be AUTOMATICALLY removed from Southern California Edison (SCE) and enrolled in this new Community Choice Energy (CCE) program, also known as Community Choice Aggregation (CCA).
Irvine Council Member, MIKE CARROLL, and Irvine Mayor, FARRAH KHAN are spearheading this program and neither have the experience to run this type of program. Mike Carroll does, however, have experience in using tax dollars for his own personal benefit and, Farrah Khan has experience in covering it up. This program is using our tax dollars to create a whole new bureaucracy that allow city council members to profit. And then, we are responsible to pay back our own tax dollars to the city in this program. So we are getting hit twice while they profit. That’s what this program is all about and common sense tells you this.
Let me now explain why entering into this CCE right from the beginning without “opting out” is a bad idea. First, you will be paying more for this program because SCE charges CCE customers a Power Charge Indifference Adjustment (PCIA). It’s an exit fee that is charged monthly to CCE customers. This is to protect the SCE customers that opt out of CCE’s from having to pay an increase in electricity because of departing customers. It’s a law in order to protect existing SCE customers. Second, CCE customers have to repay the loan to Irvine right from the start. A loan that was from the Irvine taxpayers to pay the salaries of these people, retirement plan, health benefits, etc. So Irvine residents are paying twice for the implementation of this program. The amount is figured into the monthly rate set by the OCJPA Board.
CCE’s offer nothing to consumers except higher rates. Rates under a CCE are not regulated by a government agency. And who’s to keep the CCE’s from paying their directors and consultants outlandish salaries and benefits? We already know that the CCO of Irvine’s CCE is getting over $200,000 a year, not including car allowance, cell phone, health benefits, retirement plan, severance package, sick pay, paid vacations, etc. All this for a non-profit organization paid for by taxpayers, only to then have to pay back our own money to the city.
Since SCE still maintains the grid, the energy you receive is the same mix as your neighbor. So if you opt out of this CCE program and your neighbor doesn’t, your neighbor is the one on the hook for paying the extra fees, not you. And your neighbor may think that they are getting cleaner energy but unless they have a dedicated line between themselves and SCE, the mix is the same.
If you think you will be getting “greener” energy, helping the environment, and all that, think again. What this CCE does is something known as “green washing”. It’s a paper trading scheme, known as Renewable Energy Certificates or REC’s. These CCE’s purchase inexpensive energy from a windfarm or an industrial solar farm that is not actually from wind or solar. It purchases cheap gas-fired power and delivers that to SCE and reports the REC to governing agencies as green because it came from a wind or solar farm. And greenhouse gas emissions are not decreasing, as the agency claims, but actually increasing because CCE’s are adding to the demand for gas-fired power plants. The more REC’s it buys, the more demand it creates for gas-fired power and the more emissions it produces.
The rate we pay for our energy is decided by the Board members of this CCE, which include Mike Carroll and Farrah Khan. These fees are on top of the SCE fees mentioned above. The CCE Board has complete power over what type of energy is purchased, whether it be 100% green, renewable, or fossil fuel. The Board enters into long term contracts with energy supply companies and the CCE is expected to pay up front for their energy costs to their customers. If they can’t sell off the energy to enough customers, then the member cities of the CCE are on the hook for these long term contracts that expand 10 years or more. The cities are stuck with energy that they can’t get rid of and that’s when eminent domain can be invoked. The Joint Powers Authority membership document includes language that enables a CCE to invoke eminent domain within a member jurisdiction’s boundaries, so cities that join JPA’s may not even realize they are “giving away their sovereignty.” If there’s an empty field, the CCE can assert eminent domain and install a solar farm. Similarly, the CCE can invoke eminent domain and erect windmills. These are very real issues, given that CCA’s claim they want to construct local renewables. And, the Board members on Irvine’s CCE remain on the Board even if they are not re-elected on their city council. So now we have unelected Board members making decisions about our open space! That should scare the heck out of everyone!