In February 2026, Fountain Valley acknowledged what should have been obvious long ago: its decision to join the Orange County Power Authority (OCPA) was poorly planned and poorly vetted. Councilman Glenn Grandis who led the push to join OCPA 16 months earlier, now says the city “lacks the resources” to begin receiving OCPA’s power in October 2026. He requested a six-month delay until April 2027, leaving open the possibility of further postponements.
It’s unclear if Grandis is looking ahead at the potentially catastrophic financial problems for his city or if he’s just trying to sidestep OCPA’s locked-in monthly costs now 12% – 16% higher than Southern California Edison’s (SCE) and whose energy products emit as much as 83% more carbon.
The most critical issue right now is OCPA’s pending execution of energy contracts on Fountain Valley’s behalf. Once those take-or-pay agreements are signed—even before energy deliveries start—OCPA will not likely grant additional delays, especially if the city’s eyeing exiting the agency.
As a recipient of OCPA energy, Fountain Valley faces commodity risk, financial exposure, and misrepresented general fund liability, all issues that should have been examined before joining OCPA back in 2024.
Perhaps most troubling, during that October 1, 2024 City Council meeting, OCPA’s representatives had the opportunity but failed to disclose critical information about Huntington Beach’s exit when responding to direct questions. Their omission likely influenced the Fountain Valley council’s “yes” vote to join the agency; had full information been provided, the city’s decision would likely have been different.
Now Fountain Valley is staring at a financial future tied to an agency that’s hemorrhaging millions of dollars at the commodities table.
Over the past couple of years, OCPA has overcharged ratepayers by roughly $90 million—more than Fountain Valley’s annual budget—spreading that cash across internal accounts used for poorly defined purposes. The agency now shows a $34 million loss this year alone, money predominantly used to artificially depress its prices in an attempt to calm ratepayers and minimize their opt outs.
Electricity generation—the core of OCPA’s business—is widely recognized as the riskiest segment of the utility industry.
If OCPA’s supply of ratepayer cash runs low and participation falls, Fountain Valley’s general fund is in OCPA’s crosshairs to pay bills.
That’s not financial strength; it’s triage, and it comes at the expense of all residents, including city taxpayers who opted out of OCPA. Contrary to claims about “choice,” Fountain Valley taxpayers who oppose involvement in OCPA have zero say and are now exposed to OCPA’s debts by virtue of a city council that does not understand what it’s signed up for, or the conflicts at work. OCPA’s board of directors, which includes Grandis, is not fully competent and defers to the agency’s CEO, CFO, and consultants, all conflicted by serving OCPA’s interests above all else.
For example, Fountain Valley’s October 1, 2024 City Council Action Request cites OCPA’s long-time consultant, Pacific Energy Advisors (PEA) “to perform an independent feasibility study to evaluate the financial implications of [Fountain Valley] joining OCPA” (italics added). PEA has received contracts valued at more than $3 million from OCPA.
The positive study, presented to Fountain Valley on September 3, 2024, mentioned nothing about the city’s general fund liability — as experienced by the City of Baldwin Park two years prior, where PEA was also involved.
OCPA’s numbers already raise red flags. Its electricity prices are upwards of 16% higher than Southern California Edison’s and its last power content label shows its Basic Choice and Smart Choice products emitting 83% and 56% more greenhouse gas, respectively, than SCE’s comparable products.
Even if OCPA’s rates were less than SCE’s it’s a poor choice, with products relying on low-quality resources used to boost profits.
Missteps including price spikes, opt-outs, and litigation that trigger financial obligations are not far-fetched nor unprecedented.
Examples include Western Community Energy’s (WCE) bankruptcy, as well as BPROUD — Baldwin Park’s failed community choice energy agency that was forced to raise prices, including general fund involvement to help pay off energy contracts before putting an end to its Community Choice Energy business in March 2022. PEA consulted under the “CalChoice” banner for BPROUD.
In a best case, even if OCPA closed and all energy contracts were voided (or resold) to protect cities from further energy contract liabilities, there are still millions of dollars in associated costs to which cities are exposed.
Municipalities including Lake Forest, Orange County, and Huntington Beach saw the writing on the wall and exited OCPA. Fountain Valley would do well to follow suit and minimize financial exposure.
Alternately, if Fountain Valley waits until 2027 it will likely find itself locked into energy contracts, looking at millions of dollars to exit, with nothing to blame except its leadership’s failure to complete due diligence into an agency that’s gamed everyone from the start.
Jim Phelps is a former power contractor and utility rate analyst. He served four years in the rulemaking process helping implement energy reporting legislation at the California Energy Commission, codified by the California Public Utilities Commission. He also contributed to the Commission’s Rulemaking for Power Source Disclosure Proposals on Hourly & Annual Accounting.
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