REQUEST FOR CITY COUNCIL ACTION
SUBMITTED TO: Honorable Mayor and City Council Members
SUBMITTED BY: Al Zelinka, City Manager
PREPARED BY: Travis K. Hopkins, Assistant City Manager
Subject:
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Consider selection of Huntington Beach’s Orange County Power Authority (OCPA) Default Energy Product Rate for Existing Huntington Beach OCPA Customers
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Statement of Issue:
On May 16, 2023, the City Council directed staff and the City Attorney’s Office to provide notice to OCPA of the intent of the City of Huntington Beach to withdraw from the joint power authority. With that notification, City staff and the City Attorney’s Office began meeting with OCPA to consider the procedure to provide an orderly withdrawal at the lowest cost impact to all parties involved. Through these discussions, an opportunity to significantly reduce those impacts to the City during the withdrawal is being negotiated.
As part of the negotiations, the City Council is requested to approve the conversion of Huntington Beach OCPA customers who are currently at the 100% Renewable Choice Plan to the Basic Choice Plan (at least 38% Renewable). This will provide savings that will minimize the risk of cost impacts for the City. To realize these savings, the City will also need to request an expedited implementation of these proposed rate changes.
During the withdrawal process, all Huntington Beach OCPA customers will still continue to have the existing Customer Option Actions to choose any of the OCPA energy generation options including:
1. OCPA 100% Renewable Choice Plan
2. Smart Choice Plan (69% renewable energy)
3. Basic Choice Plan (38% renewable energy) * default provision
4. Opt Out of OCPA and move to SCE for energy generation choices
Financial Impact:
There is no fiscal impact at this time.
Recommended Action:
recommendation
Adopt Resolution 2023-55, “A Resolution of the City Council of the City of Huntington Beach Authorizing the City Manager to Withdraw from the Orange County Power Authority,” which shall:
1) Approve and authorize switching the City of Huntington Beach OCPA customers currently enrolled in the OCPA 100% Renewable Choice Plan to the OCPA Basic Choice Plan (at least 38% Renewable); and
2) Authorize the appointed Huntington Beach OCPA Board Member, Councilmember McKeon or his alternate, to request on the City’s behalf that OCPA expedite the requested default rate change for existing customers; and
3) Authorize the City Manager to effectuate the City’s withdrawal from the Orange County Power Authority; and
4) Authorize the City Manager to notify OCPA of the City Council’s decision and work with OCPA to give notice to all affected OCPA customers.
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Alternative Action(s):
Do not approve the Recommended Action and direct staff accordingly.
Analysis:
On May 16, 2023, City Council directed the City Manager to work with the City Attorney to provide notice to withdraw from OCPA. Since this notification was provided to OPCA, City Staff and the City Attorney’s Office have collaborated with OCPA and Southern California Edison (SCE) to orchestrate logistics and procedures for the City’s withdrawal from OCPA and its return to SCE in an orderly, lowest cost-impact manner to all parties involved. It is anticipated that the withdrawal process will culminate in July 2024, at which time all OCPA customers will transition to back to SCE. Note that solar power customers will transition during the month of the annual billing true-up.
Background
The City of Huntington Beach confirmed participation as a Founding Member of OCPA in February 2021, after joining in December 2020. Originally, the City selected the 100% Renewable Choice Plan as the Huntington Beach Customer default energy product for all customers when they transitioned from SCE to OCPA in April and October 2022, for commercial and residential customers respectively. Prior to and after the OCPA service launch, Huntington Beach customers had the option to select from three OCPA energy plans and an opt-out option to rejoin SCE.
On January 17, 2023, the City Council made the decision to change its default offering for new Huntington Beach customers and all City municipal accounts from the 100% Renewable Choice Plan to the Basic Choice Plan (at least 38% renewable). New members were enrolled at the default energy product with an opportunity to select any of the three OCPA energy product choices as well as opting-out to SCE generation services at any time.
Current Status
Since May 2023, the City and OCPA have been engaged in negotiations to withdraw from the OCPA. As part of those negotiations, Recommended Action (1) requests the City Council to approve the conversion of City of Huntington Beach OCPA customers currently at the OCPA 100% Renewable Choice Plan to the OCPA Basic Choice Plan (at least 38% Renewable). This will provide savings that will minimize the risk of cost impacts for the City and OCPA and provide a more amicable withdrawal process. To realize these savings, the City will also need to request an expedited implementation of the rate changes, per Recommended Action (2). Recommended Action (3) and (4) would also authorize the City Manager to effectuate the City’s withdrawal from OCPA, notify OCPA of the City Council’s decision and work with OCPA to give notice to all affected OCPA customers.
The following are the three energy product offerings will remain available for new and existing OCPA customers while Huntington Beach is a member of OCPA:
Basic Choice: If the City selects 38.5% renewables as its default energy product offering, then all Huntington Beach customers will automatically be enrolled in the Basic Choice product (38.5% renewables). However, customers may opt up to either the Smart Choice product (at least 69% renewables) or 100% Renewable Choice product, or the customer may opt out of OCPA service altogether and stay with SCE. Renewable energy content will increase over time.
Smart Choice: If the City selects at least 69% renewables as its default energy product, then all Huntington Beach customers will automatically be enrolled in the Smart Choice product (at least 69% renewables). However, customers may opt up to the 100% Renewables product, opt down to the Basic Choice product, or the customer may opt out of OCPA service altogether and stay with SCE. Renewable energy content will increase over time.
100% Renewable Choice: If the City selects 100% renewables as its default energy product, then all Huntington Beach customers will automatically be enrolled in the 100% Renewables product unless the customer opts-down to either the Basic Choice or the Smart Choice products or the customer opts-out of OCPA service altogether and stays with SCE.
Environmental Status:
This action is not subject to the California Environmental Quality Act (CEQA) pursuant to Sections 15060(c)(2) (the activity will not result in a direct or reasonably foreseeable indirect physical change in the environment) and 15060(c)(3) (the activity is not a project as defined in Section 15378) of the CEQA Guidelines, California Code of Regulations, Title 14, Chapter 3, because it has no potential for resulting in physical change to the environment, directly or indirectly.
Strategic Plan Goal:
Non Applicable - Administrative Item
Attachment(s):
1. Resolution 2023-55, “A Resolution of the City Council of the City of Huntington Beach Authorizing the City Manager to Withdraw from the Orange County Power Authority”