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SDG&E's Independent Marketing District Wins Approval

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

SDG&E’s Independent Marketing District Wins Approval
SDG&E's Independent Marketing District Wins Approval GUEST: Claire Trageser, reporter, KPBS News

I'm Maureen Cavanaugh, it is Friday, August 19. Our top story on Midday Edition state utility regulators say San Diego gas and electric symbol -- to lobby on alternative energy producing programs. Cities in San Diego are considering those alternate programs called unity choice aggregation. Will be the first utility in the state to great a separate marketing wing to wing and on the proposals, KPBS is Allison Tjon recently spoke with reporter is been following the story. Thank you very much for joining us. Things for having me. Startup are reminding us what is community choice aggregation. Yes, it is a very wordy term worthy term. For describing an alternative energy program so right now as the Genie produces all the energy for residents and businesses in San Diego and other community choice the city would then take on those purchasing decisions and set the rates and that means it has control over where it is energy comes from so I can choose more renewable sources. The city of San Diego -- are considering switching to this kind of program. Yes ago some North County cities and the city of San Diego the city has its climate action plan goal of having only renewable energy by 20305 and this committee choice is one of the options it is considering to reach that goal because again it would allow the city to say we are only going to buy energy for renewable sources. So I wouldn't take -- it isn't allowed to say which is what the decision yesterday is related to. Under state law utilities cannot lobby against community choice so the utility was asked Department and -- funded by shareholders not ratepayers as a way of it is not the one who's lobbying, is this independent district that's doing the lobbying. That district, against community choice but setting out dollars, making bristles, meeting with elected officials, whatever it wants to do. So on Thursday the California Public to let his commission approved the district. What does that mean exactly? That means within 30 days be five can set up this independent district and begin its marketing and lobbying. SDG&E spokeswoman, Allison Torres, said in a statement that the decision is a step in the right direction and will help educate SDG&E's customers and allow them to make a more informed choice and she said today's -- Thursday's decision will enable San Diegans to benefit from a balanced dialogue. What about people web been working for a community choice, what did you say about the decision? They are very disappointed. I talk to. Cap with two runs a local nonprofit that's been lobbying for community choice she says not only is she upset that the adjusted is approved but that the decision leaves not enough safeguards to ensure that this independent district is separate from SDG&E. For example, existing SDG&E employees transferred to work for the independent district it is means when they meet with elected officials elected official my view them as presenting you even though technically they now work for this independent district and she says the California Public Utilities Commission says it won't be regulating the information that's put out by the independent district it is means there's no recourse if she feels they are spreading false information. This is the first time that utility has appointed district to lobby but is not the first time a community has considered forming a community choice aggregation and I'm wondering why is it that in the past and other cities have done this other utilities have not formed a district to lobby before? We should say that community choice is already being used by some cities in northern California in the Bay Area and the law wasn't in Place when they formed those districts that prevented the utility from lobbying against them so that was actually the reason I believe for the law that now says if utility wants to lobby and needs to form an independent district because when those ones were set up utility was campaigning against it. Do you think that the average citizen is going to be seeing Miller's in the mail or is there is going to be lobby directly to city councilmembers do you think? I think that we don't necessarily know what is going to look like, but we both I would say. But the other thing to know is electricity if we use which to community choice is not going to change, still going to come to the same wires in your bill would still, from the same place so the average person may not even necessarily noticed that if the change happen. What's the next step? What with the average it is unlikely see next? This has never happened before. This is the first time in the state that this has been forms with that we don't exactly know what the marketing and lobbying is going to look like, but we know that it will begin within 30 days across she isn't going to try and fight this decision but she's going to try to work with the state legislature to set of new regulations in the future and she's also going to be advocating for community choice as maybe this independent district is advocating against. The footer process to watch. Thank you for coming in. Thank you.

SDG&E's Independent Marketing District Wins Approval
The utility will be the first in the state to create a separate marketing wing that can lobby on the alternative energy program community choice aggregation.

Within 30 days, San Diego Gas & Electric can begin lobbying against local cities' plans to create alternative energy programs called "community choice aggregation."

The California Public Utilities Commission approved SDG&E and its parent company Sempra Energy's request to form the district on Thursday, making it the first utility in the state to create an independent district.


Under state law, the utility is prohibited from lobbying or marketing on community choice (Download Acrobat Reader here) unless it forms an independent district that's funded by shareholders, not ratepayers. That's what SDG&E and Sempra have now done.

SDG&E spokeswoman Allison Torres said in a statement that the California Public Utilities Commission's decision "is a step in the right direction and will help educate SDG&E’s customers and allow them to make a more informed choice."

"Today’s decision will enable San Diegans to benefit from a balanced dialogue," her statement continued. "As the first California energy company to deliver 33 percent of its energy from renewable resources and to eliminate coal from its resources, we plan to continue to do everything we can to help the region reduce carbon emissions in a cost effective manner to better the lives of our customers."

Nicole Capretz, director of the nonprofit Climate Action Campaign, has been advocating for San Diego to adopt community choice and said the decision was a setback but not a defeat.

She said in addition to approving the marketing district, the California Public Utilities Commission decided it will not regulate the independent district's statements about community choice to ensure they're truthful or accurate.


She said the commission also decided that existing SDG&E employees can be transferred to work for the independent district, which could make it easy for the two separate entities to coordinate, even though that is technically illegal.

"The state says they can’t compare notes, but if they transfer an existing employee, then if they go out for drinks, go out for coffee, play golf, of course they’re going to coordinate," she said. "It will lead to an onslaught of misleading and manipulative marketing against the public."

She said it will be difficult to prove coordination, and that if former SDG&E employees leave to work for the marketing district, elected officials will still see them as affiliated with SDG&E.

"They can say I’m not with SDG&E, even though we all know that’s who they represent and who they’ll go back to if marketing division goes away," she said. "It’s a facade."

Capritz said she still plans to advocate for local cities to adopt community choice.

"We will not let this stop our progress," she said. "We are just getting started. We won't stop until we offer families the freedom they deserve. After all, that's the American way."

San Diego is considering switching to community choice as a way of using only renewable energy by 2035, a goal in Mayor Kevin Faulconer's Climate Action Plan.

Currently, SDG&E purchases energy for all the residents and businesses in San Diego. Under community choice, the city would make those purchasing decisions and set rates, giving it control over where the energy comes from and how much it costs.

SDG&E recently announced that 35 percent of its energy came from renewable sources last year.

Local cities and elected officials, including Del Mar, Solana Beach and San Diego County Supervisor Dianne Jacob, sent letters to the CPUC protesting SDG&E's request to form the independent district.

Del Mar recently approved a climate plan that includes community choice, and Solana Beach plans this month to begin studying whether it wants to use community choice.

Jacob wrote she believes community choice "provides the best prospect for keeping energy costs down," and that SDG&E's independent district "is an obvious and clear way to skirt state law just as (community choice aggregation) is gaining momentum throughout the state."