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San Diego to establish energy provider to compete with SDG&E

Posted: 3:42 PM, Oct 25, 2018
Updated: 2018-10-26 00:11:22Z

SAN DIEGO (KGTV) — San Diego leaders announced plans to establish a government-controlled energy program to compete directly with San Diego Gas and Electric.

San Diego Mayor Kevin Faulconer announced the Community Choice program Thursday during a release of the city's climate action progress report. Data from the report showed San Diego was ahead of its schedule to cut greenhouse gas emission by 50 percent by 2035.

San Diego climate plan calls for the city to operate on 100 percent renewable energy by 2035. Faulconer says the program could lower energy costs by 5 percent for ratepayers.

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The program could begin service in 2021, according to the city's timeline.

"Today San Diego's energy landscape shifts toward a cleaner, greener future. I’m proposing a Community Choice program to power SD with 100% renewable energy by 2035 – a decade ahead of CA – and provide competitive energy choices to the region," Faulconer tweeted.

A community choice option would allow San Diegans to choose whether they want to purchase energy through the city's program or stay on as a ratepayer with SDG&E.

Assemblymember Todd Gloria called the Community Choice offering a "landmark" step for San Diegans.

“Every San Diegan deserves choice in the energy market. Every San Diegan deserves access to 100 percent clean energy instead of dirty fossil fuels. Community choice makes that possible and is the right choice for San Diego," Gloria said in a release.

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SDG&E said in a statement that the city has the right to offer its own energy provider and that the company doesn't anticipate any major financial impact due to the competing service.

"SDG&E respects the City of San Diego’s right to create a procurement program that best fits its needs. SDG&E has a long history of partnership with the City, and is committed to continuing a productive, cooperative relationship. As the City charts this new course for purchasing electricity, SDG&E will help enable the transition.

SDG&E does not anticipate any material impact to its financial results from the City’s decision to adopt a CCA program and implement it in the next few years. By law, SDG&E cannot profit from the sale of energy that it has purchased for its customers. The cost of energy contracts is a pure pass-through cost to customers with no markup allowed."

Not every organization was ready for the city unveiling though. The Clear the Air Coalition said the city should carefully weigh the option before moving the program into service.

Specifically, the group worries about higher bills to subsidize the government program, whether the city has the expertise to buy and sell energy, what happens if the program fails and if other local issues should be considered a higher priority, such as homelessness.

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"If the city decides to form a CCA, an important question to ask is: would it actually help San Diego reach its clean air goals faster and cheaper than current state laws require?" Ruben Barrales, the co-chair of the Clear the Air coalition, said.

This year, San Diegans were astonished by high utility bills, in some cases, $700 more than usual. More than 80,000 San Diego households were hit with high-usage charges, about 13 percent higher than the utility company's original projection for August 2018.

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Cities around the county have recently started exploring their own community programs.

Solana Beach switched to a community model in 2002. Currently, 92 percent of residents and businesses are getting energy through the city, while the other 8 percent opted to remain with SDG&E. Solana Beach councilman Peter Zahn said residents are seeing 2 to 3 percent discounts on the electric generations portion of their bills.