Friday, November 17, 2023

The Great Orange County CCA U-Turn

Great news this week, Local Power's 2022 audit of the performance of a California CCA program claiming benefits to consumers, green power and decarbonization has prompted a major U-Turn by the agency. According to staff reports last week, the Orange County Power Authority (OCPA), a recently formed CCA, has made major changes in both top staff and board members, and is realizing its mission to decarbonize and lower costs for consumers. Back in March, following Local Power LLC's report and recommendations regarding its operations, policies and procedures, which were subsequently backed by internal County and State Audits, the Orange County Power Authority publicly presented an improvement plan and announced changes already made and others in the works. Since then major changes have been made in staff, board membership and policy.

“We have undergone several audits over the past six or seven months and numerous hours responding to these audits and reports,” Joe Mosca, OCPA’s director of communications and external affairs, told its board of directors Wednesday. “What we have for you today is an improvement plan that captures all the recommendations ever made and how we are going to address every one of those audits,” in an article by the Orange County Register last week, which contains a links to the original article about Local Power's investigation for the Orange County Administrator. 

Criticism is essential to good government and indeed the long-term success of CCA. What could have ultimately discredited CCA as a concept in Southern California can now be a demonstration how local democracy outperforms corporate governance in so many ways. OCPA's turnaround consisted of removing top level management and board changes, resulting in the major policy and program design changes that have now followed. Orange County may be the biggest turn around of a CCA yet, and should serve as a lesson to CCA supporters and opponents alike of the unique ability of a democratic process to tackle important changes and challenges like climate change or energy crisis. CCA is a means to an end, and not an end in itself, requiring leaders and followers alike to be more critical and more positively involved in CCA as a process that takes years rather than the flick of a policy switch. Addressing climate change requires not just active consumers, but active local citizens. It's also important for elected officials and CCA managers to remember that citizen advocates of CCA formations are the reason it ever happened, and deserve be respected whether as critics or champions. The reason Orange County asked Local Power LLC to perform this audit of OCPA was the result of a longstanding margnialization of OCPA's founding advocates by OCPA staff and the OCPA board. This behavior is actually typical in government, and where CCAs do it, make for mediocre CCA programs with marginal benefits, but in the case of Orange County Power Authority led to poor policy decisions, procedures, and benefits to ratepayers and the environment. CCA is a tool that still requires skill and discipline, not an automatic fix: and criticism brings refinement and clarity.

Staff said OCPA had already implemented greater inclusion of a Community Advisory Committee in oversight and board meetings. Regular meetings will be held and a member of the committee will be present at board meetings from here on out. The agency has also amended how it tracks its agendas and meets notification requirements, including time stamping when they go online to improve transparency, which Local Power LLC had strongly recommended.

“We have gone through so many challenges particularly to the dynamics within our jurisdictions, but it doesn’t mean that we’re not accountable to the public; it doesn’t mean that we aren’t trying hard to restore that trust that has been knocked down in the last two years,” said Jose Castaneda, OCPA board member and Buena Park council member according to the Orange County Register. “I appreciate the opportunity to memorialize our improvements.”

So do we! Turnarounds like this are not typical of either electric utility or deregulated supplier corporate boards, even those convicted of criminal activities. Local governments can do better because they are open to criticism from the public. Advocates had to struggle alone for years in order for the correction to be finally made. One of them, indeed, now sits on the OCPA board. This is how democracy can work.

OCPA implemented not one but many of our recommended changes, hiring a board clerk and assistant to the CEO to better ensure transparency, another recommendation in our performance audit. Reflecting Local Power LLC's critique of OCPA for also inappropriate risk management policies, the California State Auditor’s Office recommended the agency amend its risk management program, and by May, OCPA officials said an oversight committee that includes members of the board will start meeting regularly.

OCPA also implemented changes based on Local Power's audit recommendations concerning The CCA's contracting practices. "Already, policy has been set to report contracts to the board between $50,000 and $125,000 and all active contracts more than $125,000 have been approved by the board and the board will sign off on any contract of that value from now on, in addition to board  quarterly progress with financial details of all contract,"  the Orange County Register reported. "The agency has also made amendments to its disclosure of payments to establish accountability and will require large checks to be signed by senior management."

Staff said OCPA will have a policy by June 2024 to further amend contracting concerns raised in Local Power LLC's performance audit and Orange County Auditor by questioning whether the CEO should be able to bypass existing purchasing requirements, whether or not it is "urgent," and is studying precedents from other California CCAs on how to handle these needs as well as threshold dollar amount formal triggers for OCPA bid solicitations.

As Local Power LLC's CC performance audit recommended, OCPA's executive team and board of directors drafted bylaws to increase its transparency which were reviewed at the public hearing last Wednesday.

OCPA is also finally implementing local renewable energy projects rather than just signing contracts, the longstanding goal of Local Power LLC.

Congratulations everyone!

Local Power LLC's original Orange County Power Authority performance audit is downloadable as a PDF from Local Power's web site here.

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