Agenda Report
Fullerton City Council
MEETING DATE: APRIL 4, 2023
TO: CITY COUNCIL / SUCCESSOR AGENCY
SUBMITTED BY: ERIC LEVITT, CITY MANAGER
PREPARED BY: KIM CHAUDHRY, SENIOR ADMINISTRATIVE ANALYST SUBJECT: ELECTRICITY COSTS AND RATES AND OPTIONS TO OPT DOWN OR WITHDRAW FROM THE ORANGE COUNTY POWER AUTHORITY JOINT POWERS AGREEMENT
SUMMARY
City Council directed staff on March 21, 2023 to agendize a discussion of comprehensive information from the Orange County Power Authority (OCPA), a comparative analysis of the City’s electricity costs and details regarding rates and options for the City OCPA subscription.
RECOMMENDATION
Authorize City Manager to execute a non-disclosure agreement (NDA) with OCPA.
Consider hiring a consultant to analyze the cost and process to withdraw from the Joint Powers Agreement (JPA) with OCPA.
Consider the following options:
Direct staff to opt down to OCPA’s 38% Renewable Basic Choice Plan for residential and business accounts.
Direct staff to maintain participation in OCPA’s 69% Renewable Smart Choice Plan for residential and business accounts.
CITY MANAGER’S REMARKS
None.
PRIORITY POLICY STATEMENT
This item matches the following Priority Policy Statement:
Fiscal and Organizational Stability.
FISCAL IMPACT
The City does not need additional budget appropriations to implement at this time as opting down to OCPA’s 38% Renewable Basic Choice Plan since opting down has no cost.
Staff has determined hiring a consulting company to provide an analysis of withdrawing from the JPA with OCPA would cost between $50,000 and $100,000.
DISCUSSION
Staff presents several items for City Council review, discussion and possible action based on input from the March 21, 2023 City Council meeting:
Provide answers from OCPA to the questions received at the March 21, 2023 City Council meeting Possible change in City of Fullerton default plans for residential and commercial accounts Authorization to officially request a non-disclosure agreement Consider hiring a firm to evaluate potential withdrawal from OCPA for the City of Fullerton.
Opt-down possibility
The City of Fullerton currently uses OCPA’s default 69% Renewable Smart Choice Plan for residential and commercial customers. City Council can decide to opt down to the OCPA 38% Basic Choice option. There is no fee to opt down, however, the lower cost plans contemplate increased use of electrical power procured from non-renewable energy sources.
Non-disclosure agreement
The City has inquired about entering into a non-disclosure agreement with the OCPA. The NDA would allow the City to conduct audits or evaluate potential liability in connection with a member withdrawing from OCPA. Additionally, the NDA would provide access to information such as purchasing records and other documents that provide a better understanding of what OCPA has procured on behalf of the City.
Withdraw and perform analysis
The City Manager’s office has engaged with OCPA to obtain information on the cost and process of withdrawing membership. The City would need to hire a consulting company to conduct an analysis upon withdrawal to the amount of the City’s responsibility under Section 6.3 of the JPA if the City were to provide 180-day notice to withdraw from OCPA. The potential withdrawal cost includes any liabilities attributable to the City through the effective date of its withdrawal, actual costs or damages incurred by OCPA as a direct result of the City’s withdrawal or costs or obligations associated with the City’s participation in a particular program.
The estimated cost for an analysis totals $50,000 to $100,000.
Information provided by OCPA
City Council directed staff on the March 21, 2023 to return with more comprehensive information provided by the OCPA. Attachment 1 includes information and data from the OCPA regarding the NDA, changing the City’s default, information on withdrawing, participation data and responses to questions from the March 21, 2023 City Council meeting.
Attachments:
Attachment 1 – Information provided by OCPA
Orange County Power Authority Discussion
April 4, 2023 - Page 2