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I’ll agree with Jim Phelps on one thing – Huntington Beach blundered when they precipitously exited from their agreement with Orange County Power Authority (OCPA). That exit was driven, not by the will of the people and not by the will of businesses, but by the personal agenda of the MAGA city council members. Mr. Phelps makes lots of accusations but provides no facts to back them up. He also ignores important information that doesn’t suit his narrative.
OCPA had a nearly 80% take rate in Huntington Beach, and anyone who preferred to be with SCE merely had to ask. Some of us chose to be on OCPA to be on renewable energy. Some chose to be on OCPA for a lower price. Both options were available, and each rate payer had their choice – they only need to state their preference – even including going back to SCE.
My personal preference was to be on 100% renewable energy and it cost me only about $3 per month. In my opinion, that’s a small price to pay to try to stop global warming and leave a habitable planet for future generations. That was an option not available from SCE at any price.
Others, I’m sure, chose other options. Some opted for 80% renewable energy while others chose to go for the lowest price.
What Huntington Beach’s city council did was to take away all of those options, consigning their constituents to a single option – the “regulated” monopoly of Southern California Edison.
I put “regulated” in quotes because the so-called regulators are not doing their job. Spending on transmission lines by the electric utilities (SCE, SDG&E, and PG&E) have increased by about 300% in the last 20 years, even though electricity demand has remained flat. Only about 12% of that spending is for wildfire mitigation. The result? Utility rates have gone up by about 150-275% since 2002, and Californians pay the highest electricity rates in the continental United States.
Why, you might ask, are the utilities spending so much on transmission lines when electricity demand is flat?
- The utilities are guaranteed a 7-10% profit on transmission line spending
- They self-approve about 60% of all projects without oversight from the California Public Utilities Commission (CPUC) – the public’s supposed watchdog.
- The utilities have reported record profits (between $2.29 and $2.54 billion dollars each in 2024!)
- Since 2000, those three utilities have spent over $1 billion lobbying politicians, academia, and non-profits
Percentage of rate increase attributable to utility transmission line spending
Jim Phelps makes all kinds of accusations regarding OCPA but offers exactly zero proof.
He claims that OCPA’s energy is “pseudo” green but gives no statistics to support his contention.
He claims that SCE rate will drop below those of OCPA in 2025, but ignores the fact that SCE has applied for rate increases this year.
He states that OCPA can’t possibly obtain power from nuclear sources because the community choice industry called for closure of nuclear plants, yet the very organization he has consulted for, the CPUC, has repeatedly delayed the closure of California’s one remaining nuclear generation plant at Diablo Canyon.
He blames OCPA for not having enough rate stabilization reserves while actively trying to destroy their business, the profits and partnerships from which could help them generate the required reserves.
He cites the Elan and Breakwater deal as a fiasco because the city chose to forgo short term property tax revenues in exchange for property ownership in the future. The value of that property pencils out to about a 9% rate of return on the investment. That’s a pretty darn good rate of return.
Mr. Phelps is a “former power contractor and utility rate analyst.” He works for the very regulators responsible for California having the highest electricity rates in the Continental US. It’s clear where his allegiance lies.
I’d take his opinion with a very large grain of salt.
David Rynerson is a retired systems engineer with an economics background. He resides in Huntington Beach, CA.
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