IRVINE, Calif.—The city of Irvine voted unanimously on Feb. 8 to adopt 100 percent renewable energy for residents and commercial businesses just two months prior to the service launch of a new “community choice energy” program, though some are concerned about the entity’s financial capacity to sustain its operation and its ability to provide good electricity rates for consumers.
“I think today is an exciting day for environmental justice and the future of Orange County,” Irvine Mayor Farrah Khan said during the Feb. 8 city council meeting. “It’s no secret that California and Irvine are leading the way in achieving carbon neutrality.”
To provide more renewable energy to homes and businesses—by directly purchasing electricity from individual power plants, instead of through Southern California Edison, an electricity supply company that serves much of Southern California—Orange County created its first community choice energy program, called the Orange County Power Authority in late 2020.
The cities of Irvine, Buena Park, Fullerton, and Huntington Beach have opted to join the program, with Irvine footing the startup costs.
Cities originally had three options for a renewable energy mix, either 39 percent renewable, which would match Edison’s rates, 70 percent renewable, or 100 percent renewable. But member cities of the power authority are required to choose at least 70 percent renewable energy.
Like Irvine, two other member cities, Buena Park and Huntington Beach, opted for 100 percent renewable energy, while Fullerton went with 70 percent initially.
Irvine Councilman Mike Carroll said that as Irvine is moving toward 100 percent renewable energy, the Orange County Power Authority will be the “greenest” community choice energy entity in the state.
However, the power authority—having promised to provide green energy at a lower cost—will have to increase the price of energy 5.6 percent higher than Edison’s current rates as Irvine goes 100 percent renewable.
“The promise, if you’ll recall, was that with the Orange County Power Authority, we were going to get cleaner electricity at a cheaper price, as compared with [Edison],” Councilman Larry Agran said. “It remains to be seen if there can be delivery on that. Certainly not in the short term, but even over the longer term.”
The city of Irvine already invested $7.7 million into the power authority at its inception and put collateral up to get a $35-million loan. Now only $6 million remains, with most of the money spent on buying electricity, according to a recent budget.
Agran said that while he supports moving toward fully renewable energy, it is questionable whether the way the power authority has been operated is truly financially viable in the long run.
“The question in my mind isn’t so much what tier we choose, but whether or not we can actually make [the power authority] work, and actually implement it,” he said. “I do have some doubts.”
In response, Carroll said that if Agran was worried about the “imminent failure” of the power authority, he could vote against it so he “will be on record as voting against 100 percent renewable power.”
“[The OC Power Authority] is a community choice aggregation entity that’s run by actual professionals, with dare I say, a competent board led by the mayor and myself and some of the great councilmembers of the cities of Buena Park, Fullerton, and Huntington Beach,” Carroll said.
While the new pricing and fully renewable energy will be implemented for everyone at first, both residential and commercial customers will have the ability to opt out and return to Edison.
OC Power Authority Chief Financial Officer Tiffany Law said during the meeting that they anticipate 5 percent of residential customers and 10 percent of commercial customers will opt out.
Prior to the power authority’s service launch in April for commercial customers, businesses will receive two notification mailers informing them of the change in rates and the option to opt out, and two more mailers will be sent out after the service starts. The entity will start serving residential customers in October.
“I’m smart enough about this stuff to know this is an extremely risky business, purchasing and reselling electricity, and it has to be monitored minute by minute,” Agran said. “Somebody has got to start asking the question, ‘What happens if this enterprise falters or fails? Who is going to be stuck with the bill? How much is that going to be?’”
Friends Read Free