October 25 – San Diego Union Tribune – Joshua Emerson Smith reports – San Diego Mayor Kevin Faulconer announced on Thursday his support for the creation of a government-run alternative to San Diego Gas & Electric, drawing the ire of his traditional conservative allies and praise from environmental groups and progressive Democrats.
The highly anticipated decision follows much debate about how best to satisfy the city’s pledge to run on 100 percent renewable energy by 2035 — a decade before California mandates that all utilities run on zero-emission electricity.
Faulconer said at a press event Thursday that the alternative energy model, known as community choice aggregation, would not only help the city reach its goal laid out under its 2015 Climate Action Plan, but it would also save customers money.
“San Diego can become a greener city, while at the same time lowering costs for our ratepayers,” he said.
“The bottom line is that we are creating a fair and open marketplace,” he added. “People may choose SDG&E. They may choose the (community choice). But the point is they can choose.”
The mayor said the program could be in effect as early as 2021, with planning and implementation starting early next year.
Longtime supporters of the Republican mayor, from elected officials to business groups, have repeatedly critiqued the idea of starting the government-run energy program. They have claimed the effort could open the city up to financial risk, fail to deliver on the promise of boosting renewable power and lead to higher rates.
On Thursday, Jerry Sanders, president and CEO of the San Diego Regional Chamber of Commerce and former San Diego mayor, seemed flummoxed by the mayor’s decision.
“I’ve talked to him over a period of time,” Sanders said. “At one point, I didn’t think he was going to do it, but obviously he’s changed his mind. It is what it is.”
“I believe that it’s a pretty risky decision,” he added. “I just think there’s so many unknowns that it’s going to be difficult.”
Under a community choice aggregation program, elected officials in San Diego would assume responsibility for buying electricity on behalf of ratepayers, making decisions about whether to ink contracts with natural gas, solar, wind or other providers.
SDG&E would continue to operate the electrical grid, and consumers could choose to return to the utility’s service if they were dissatisfied with the city’s program. The city’s climate plan, for example, assumes that about 20 percent of eligible customers will return to SDG&E service if a community choice program is adopted.
A study commissioned by the city found last year that community choice has the potential to deliver cheaper rates than SDG&E, while providing 50 percent renewable energy by 2023 and 80 percent green power by 2027.
SDG&E currently offers about 43 percent renewable energy, and under state law must get to 50 percent by 2030 and 100 percent by 2045.
On Thursday the mayor’s decision was hailed as a major win by a number of environmental groups, from the Sierra Club to smaller nonprofits such as the San Diego-based Climate Action Campaign.
“Today is a watershed moment for San Diego and a victory for San Diego families,” said Nicole Capretz, executive director of the Climate Action Campaign. “Not only will families finally get consumer choice and affordable rates on the path to 100 percent clean energy, we are showing the world that climate action is a bipartisan issue that is about doing the right thing versus the easy thing.”
The City Council now looks poised to move forward on implementing the program. Its Democratic majority has been calling for a vote on the issue for months, and on Thursday conservative councilwoman Lorie Zapf also came out in support of the idea.
“This is an essential first step in making San Diego’s energy costs affordable for all working San Diegans,” Zapf said. “Our residents deserve to have a choice in where their energy comes from.”
If approved, San Diego’s effort to start a community choice program would follow a trend that stretches across the state, from Marin to San Francisco to more recently Los Angeles County. More than 160 cities and counties in California have embraced the government alternative since 2010.
Similar to other efforts, Faulconer called for the formation of a joint powers authority by 2019, which would include multiple cities around the county. The mayor, who leaves office at the end of 2020, said that teaming up with other municipalities would give the program more buying power and help limit financial liability.
“Let me be clear,” he said. “The city of San Diego will not be going alone on this endeavor. My goal is to get regional buy-in for this effort.”
That might look enticing to Solana Beach, which earlier this year became the first in the region to adopt a community choice program. It could also draw in several North County cities — including Encinitas, Del Mar, Oceanside and Carlsbad — that have also been exploring the idea as a way to increase the use of renewable power.
Encinitas Mayor Catherine Blakespear responded enthusiastically on Thursday to Faulconer’s announcement.
“It’s really exciting,” she said. “There’s confidence when we do it all together in terms of the concerns about liability. Maybe we would eventually get to the point where all the cities in the county are involved.”
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