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SDG&E’s Plan To Lobby On Community Choice Is Suspended

Photo by Nicholas McVicker

A sign on SDG&E's headquarters appears in this undated photo.

The California Public Utilities Commission says SDG&E is not doing enough to show its lobbying arm is separate from the utility.

San Diego Gas & Electric's plan to lobby on the alternative energy program called community choice aggregation was approved in August 2016, but now has been suspended because it does not comply with state directions.

Under state law, the utility is prohibited from lobbying or marketing on community choice unless it forms an independent district that's funded by shareholders, not ratepayers.

What is Community Choice Aggregation?

Right now, San Diego Gas & Electric provides power through its system of lines and wires to every city in San Diego County and southern Orange County. SDG&E buys the electricity from a variety of sources, including natural gas plants, hydroelectric dams and wind turbine farms.

If a city goes with community choice aggregation, power would still go through SDG&E’s grid, but the city would buy the energy, not the utility. That allows cities to have more control over how much of their energy comes from renewable sources and the cost for that electricity.

That's what SDG&E and its parent company, Sempra Energy, did. They submitted plans for how the independent district would be run to the California Public Utilities Commission, which approved the plans last summer.

But now the state commission says SDG&E is not following all of its directions. It sent a letter to SDG&E on Dec. 27 laying out the reasons.

The letter does not say what will happen next for SDG&E's independent district, and representatives from the CPUC were not available for comment. Allison Torres, a spokeswoman for SDG&E, said the utility would provide more information to the CPUC this month.

"While SDG&E believes the advice letter and compliance plan provided enough detail, the commission is asking for more information," she wrote in an email. "We plan to file an advice letter in January."

The CPUC is tasked with ensuring the utility's independent marketing district is truly separate from SDG&E. The commission said SDG&E needed to provide updates on some of its plans for how the independent district would be run, and that those updates do not have enough information to show the district is independent enough.

For example, SDG&E has to "conduct training for all its employees and agents, including contractors and consultants" to ensure they follow state laws about marketing and lobbying on community choice, the CPUC wrote. While the utility trained its employees, it hasn't demonstrated it will train contractors and consultants, according to the CPUC's letter.

SDG&E formed the independent marketing district to have a voice in the conversation about whether cities in San Diego County should switch from the current system, where residents and businesses buy energy from the utility; to community choice aggregation, where the cities would make those purchasing decisions and set rates, giving them control over where the energy comes from and how much it costs.

That district, called Clean Energy Advisors, created a flier about community choice it has distributed to some residents and elected officials in the county.

"Our goal is to provide a balanced and fact-based perspective regarding California’s changing energy landscape," the flier reads. "It is our intention to engage in a realistic conversation to ensure that all electricity customers in San Diego continue to have access to clean, affordable power."

Environmentalists such as Nicole Capretz, the director of the nonprofit Climate Action Campaign, say community choice is the only way cities can reach 100 percent renewable energy — a goal laid out in San Diego's Climate Action Plan.

Capretz said the suspension of SDG&E's independent district was "a surprise and a really big deal."

"Because they refused to conform with the state's requirements, they are no longer authorized to approach elected officials or an institution or an organization in San Diego or a community leader and discuss community choice energy," she said.

Several North County cities are also considering switching to community choice, and the San Diego County Board of Supervisors will take up the issue later this month.

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