Fullerton City Council members voted last month to join a new public utility program that could bring more renewable energy to Orange County, but the final costs and ramifications of the decision still remain unclear.
The new utility is called community choice aggregation, which is a program that will allow cities to band together to buy and sell electrical power. The program’s goal is to invest more in renewable energy and slightly lower costs for local residents, as well as offering residents an alternative to buying electricity from Southern California Edison.
The city of Irvine has been leading the effort to establish this program over the last two years, and has currently recruited the cities of Fullerton and Costa Mesa, with each participating city appointing a representative to serve on a board running the agency. Several other cities, including Huntington Beach and Lake Forest, are also considering joining the effort.
Irvine will appoint two board members in exchange for funding the initial costs needed to jumpstart the program.
Residents who join the program could save nearly 2% on their electricity bill, but a report commissioned by Irvine states that those numbers could grow over time after the cities have paid back the costs of launching the program.
According to a presentation by Ryan Baron of the law firm Best Best & Krieger, the special counsel hired by Irvine to organize the program, nearly three quarters of California residents will have access to these programs within the next 10 years.
However, the final costs to the city of Fullerton remain hazy, as the city will be responsible for helping pay back the initial capital that Irvine is putting in to start the agency, which stretches anywhere from $10 million to nearly $20 million.
Fullerton is also in a financial rut as a recent report by city staff projects that the city will be in the red by the 2024-25 fiscal year, and that the city council will have to cut out $5 million from the budget every year to make it that far. A proposed tax increase on the Nov. 3 ballot was overwhelmingly shot down by voters, which leaves the new council with the job of figuring out what other options exist for new revenue.
The city council approved city manager Ken Domer to take over for the final negotiations on Nov. 17, and he said Fullerton is ready to join the program.
“We’re in agreement with what their latest iteration of the JPA agreement is. So, the council has provided me authority to sign it, we’re just waiting on the word from Irvine if they’re ready to move forward,” Domer said in a phone call on Nov. 20.
Irvine city staff reaffirmed that Fullerton had joined the effort at a meeting on Nov. 24.
Domer said the council was largely happy with the original proposal, but wanted one caveat added to the agreement.
“We were happy with the original proposal. We want to make sure there is an April timeframe for the new city council for us to continue reviewing information to ensure participating is the right thing for the city council.”
While the outgoing city council supported the program in a 4-1 vote, the new extension that city staff negotiated for the incoming council that takes their seats on Tuesday could overrule that decision.
Under the agreement, Fullerton has until April 2021 to pull out of the agreement with no negative repercussions.
In the original vote, only Councilman Bruce Whitaker voted against the program, citing concerns about creating a brand new government agency that the council would be partially responsible for.
“I remain the skeptic,” Whitaker said at the Nov. 2 meeting. “I’ve seen and heard these promises in the past, and the problem with a JPA is they’re a full mini government on their own, with their own powers that are outside the power of residents to control.”
But Whitaker has now been joined on the stance by Nick Dunlap, who has previously worked with Whitaker in campaigning against the proposed tax increase. Dunlap also said he was against the program at a forum hosted by the Fullerton Observer, saying it would be bad for the city.
Councilmen Ahmad Zahra and Jesus Silva both supported the move to join the program, leaving incoming Councilman Fred Jung as the tiebreaker. Daily Titan reporters have not been able to find any posts or recent statements by Jung on the issue of community choice energy.
The new council takes their seats tonight at a 6:30 meeting, but they are not set to discuss any policy decisions aside from taking their oath of office.