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SDG&E’s Independent Marketing District Wins Approval

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Photo by Nicholas McVicker

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

SDG&E's Independent Marketing District Wins Approval


Claire Trageser, reporter, KPBS News


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."


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Photo of Claire Trageser

Claire Trageser
Investigative Reporter

opening quote marksclosing quote marksAs a member of the KPBS investigative team, my job is to hold the powerful in San Diego County accountable. I've done in-depth investigations on political campaigns, police officer misconduct and neighborhood quality of life issues.

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