SAN DIEGO HEARS PITCH FOR PUBLIC POWER OPTION
Current electric and gas deals with SDG&E run through June 1
With San Diego expected to make a decision on a new electric and gas franchise agreement in little more than three months, a City Council committee listened Thursday to a pair of presentations on the option of the city forming its own municipally run utility.
While there would certainly be challenges, “there’s no question that you can do this, so don’t even think twice that it’s out of your wheelhouse,” said Barry Moline, executive director of the California Municipal Utilities Association.
“There has to be commitment because it’s not an easy process,” said Ursula Schryver, vice president of the American Public Power Association, a trade group that promotes publicly funded utilities across the country. “It’s going to take time, it’s going to take money.”
In a franchise agreement, a utility is
granted the exclusive use of public rights of way for transmission and distribution, as well as the right to install and maintain wires, poles, power lines and underground gas and electric lines within the city limits of a given municipality.
In the city of San Diego’s case, the franchise has been granted to San Diego Gas & Electric for more than a century. The current agreement has been in place since 1970. It was set to expire last month but the city and SDG&E officials agreed to an extension that runs through June 1.
Earlier this year, SDG&E turned in the sole bid for a new agreement — agreeing, among other things, to pay $80 million ($70 million for the electric franchise and $10 million for the gas franchise) upfront to the city on a new deal lasting 20 years. But Mayor Todd Gloria deemed the offer non-responsive because of changes SDG&E officials wanted in the deal’s terms so a new round of bidding to lure prospective utilities and energy companies has been scheduled.
But the city also has the option to create a publicly funded utility, similar to municipal utilities such as the Los Angeles Department of Water and Power and the Sacramento Municipal Utility District.
Supporters say municipal utilities frequently offer lower rates than investorowned utilities and say the current low interest rate environment makes for an opportune time for a city like San Diego to make the transition. Opponents say buying out the infrastructure of an existing utility like SDG&E would cost billions, a daunting price tag when the effects of COVID-19 are putting local governments under financial stress.
During the virtual meeting of the City Council’s Environment Committee, Schryver said 88 new public power utilities have been established in the U.S. since 1973, although most were small — serving 18,000 customers or fewer. The timeline for municipalization can typically take four to six years or longer, Schryver said, because the incumbent utility frequently fights the move.
“There will likely be legal challenges,” Schryver said.
“You need to recognize that when you get into this conversation, that it’s basically nuclear war,” Moline said. “For SDG&E, this is an existential issue. Granted, (the city of) San Diego is a little less than half of SDG&E’s service territory but still, that’s a big chunk. It’s not like 5 percent or less.”
Moline guessed that a preliminary feasibility study would cost about $500,000 and a detailed analysis “of every pole and wire” would cost several million dollars.
“It’s really important to know what you want, to negotiate well, to go down the road of negotiation, and if you’re not getting what you feel you need, then to pull the trigger on a publicly owned utility,” Moline said.
Councilman Joe LaCava said the topic of forming a municipal utility came up frequently at recent public forums on the franchise agreements and he wants the bidding process to include a proposal to explore a government-run utility. “It’s clear San Diegans are interested in the public power option,” LaCava said.
Councilman Chris Cate has come out in opposition to municipalization. “A lot of people talk about monopolies and competition with utilities and I get that. I’m very much in support of competition,” Cate said. “But I don’t see those same calls for our water department. San Diego has some of the highest water rates in the nation.”
The same day the presentations were made, Sempra Energy — the parent company of SDG&E — released its 2020 earnings report and touted profits of $3.76 billion for the year, including $824 million from SDG&E.
“Against a challenging economic and operating backdrop, we deployed a record amount of capital and produced the best financial results in our company’s history,” Sempra CEO Jeff Martin said in a conference call with utility and energy analysts.
“Every one of those (SDG&E) dollars is a lost resource for mitigating the climate crisis and keeping rates as low as possible,” Craig Rose, a member of Citizens Franchise Alliance, a group in favor of municipalization, said in an email. “We can’t afford that kind of drain, particularly amidst the climate crisis and the fallout from the pandemic.”
Before the committee meeting, a coalition of 27 environmental and political groups sent a letter to the members of the City Council and the mayor’s office, calling for a number of terms to be included in a new franchise agreement. The list included establishing a business plan for a public power option, stopping expansion of natural gas infrastructure and having a new deal run for just three years, rather than the 20 years that had been earlier proposed.
“Having short-term agreements tied to annual audits and policies can really help ensure that SDG&E, or whatever partner the city decides to partner with, is able to help us meet our climate and equity goals,” said Matthew Vasilakis, co-director of policy for the Climate Action Campaign.
Earlier in the week in a meeting with the UnionTribune’s editorial board, SDG&E officials said longer agreements are preferable.
“I think 20 years gives both the city and the franchisee the ability to plan long-term,” said SDG&E Chief Executive Officer Caroline Winn. “We have fiveyear 10-year, 20-year plans around strategy on how to ensure our system is clean, safe and reliable and climate-resilient.”
According to a timeline put forth by the mayor’s office, Gloria will then present a recommendation for a new agreement to the City Council in May. It takes a supermajority of at least six of the council’s nine members to approve a new pact.
Whistles blaring, grown men shouting, the thwack of a quarterback’s pass hitting a receiver’s hands.
The sights and sounds of high school football were back Friday, the first official day of practice in the CIF San Diego Section for the oft-delayed 2020 season.
“This is awesome,” said La Costa Canyon senior receiver Jayden Lucian, who carries a 4.2 GPA and is headed to the University of Chicago. “I love it. It feels like a practice before COVID-19 hit us.
“Honestly, I never thought we’d get a chance to play. A month ago, I still wasn’t sure. Then things clicked, and, boom, here we are.”
Schools across the county were back on the field, two weeks before a fiveor six-game season is set to kick off March 12.
At La Costa Canyon, head coach Sean Sovacool said 190 players signed up for football across all three levels — varsity, JV and freshmen.
“With this many kids, socially distanced, in cohorts, we’re going to use every square inch of the field,” said Sovacool, who started practice at 4 p.m. so the track team — mostly sprinters and jumpers — could finish its practice.
“We had had to jump through a lot of hoops to make this happen. For so long, I felt I was working with a mask, blindfold and straight jacket. I was frustrated. The kids were frus
trated because there were so many barriers and limitations.”
On Feb. 19, schools got the all clear to start practice a week later.
On Feb. 20, Sovacool was on the phone nearly all day.
“I felt like a telemarketer,” he said. “I had to re-recruit players who had given up. I had to check on eligibility.
“I had to reassure concerned parents. I had to round up my coaching staff.”
Teams must have 14 practices before they can play a game March 12. So Sovacool plans on having two practices next Saturday, probably with pads.
The Mavericks were in helmets, shirts and shorts Friday. Teams aren’t allowed contact until they’ve gone through three practices.
“It feels weird to be out here in February,” said LCC senior strong safety Kris Sanchez. “But it also feels great. This is what we’ve been waiting for, every kid in the county.
“I’m back together with my friends, my teammates. I’m so happy to be part of the school again, part of a team.”
Sovacool lectured his team on the importance of following the rules and safety protocols — masks, distancing, cohorts.
“I hate wearing a mask,” said senior defensive end Dillon Sparks. “But
if wearing a mask is what it takes to play, I’ll wear my mask.
“It’s a little weird being back out here. The chemistry is a little off because we haven’t been around each other for a while. That will change pretty quick, though.”
Sovacool said he wanted to make this first practice as close to the first practice of fall as he could.
“I want to create as much normalcy as I can in this topsy-turvy world,” he said. “We need to squeeze months of preparation into weeks. I feel like I’m running uphill with a parachute on.
“But this is the Big Kahuna. Everyone in the county has an opportunity to play. We need to follow the rules, stay safe, and hang with it.”
Around the county, El Capitan coach Ron Burner welcomed about 100 players to the first day of practice.
“We’re excited to get the chance to be out here,” Burner said. “Field space is going to be at a premium as more and more sports start. So it’s going to be up to the coaches and players to adjust and fit in.”
Oceanside, one of the top teams in the county, had to adjust its first practice, starting at 5:30 p.m.
“The cross country team had a meet and they run through campus and finish on the track,” said Pirates football coach Dave Rodriguez. “So we had to yield and make an adjustment.
“I love that those cross country kids are getting a chance to compete,
so moving practice back a little is a small price to pay.”
At San Marcos, coach Derek Stank said he had 88 players on the varsity and JV with another 55 freshmen.
“Our practice schedule is all over the place because we need to share the field,” said Stank. “We’re 6-9 p.m. on Friday, 5-8 on Monday and Wednesday, 3-6 on Tuesday and Thursday.
“But at least we have a field, have times, have a team, and have a season.”
At Mira Mesa, coach Chris Thompson had just 60 varsity and JV players. The Marauders will not field a freshman team this season.
“Our numbers are way down, but we have some great kids, kids from our neighborhood, kids who want to be here,” Thompson said. “So I feel really good about things.”
In the South Bay, practice doesn’t start until Monday.
Most of the large schools are OK for participation, but Southwest coach Domonic Cruz is worried about his numbers.
“We had a solid group of 24 last season, but we didn’t have a JV program,” Cruz said. “I had a solid core of 12 returnees, but some of the guys lost interest because of the wait, and we’re down to nine.
“We’ll have to see how things turn out.”