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San Diego Advances ‘Community Choice Energy’ Business Plan

Power lines at an SDG&E facility in North Park are seen here on Sept. 26, 2017.

Photo by Andrew Bowen

Above: Power lines at an SDG&E facility in North Park are seen here on Sept. 26, 2017.

San Diego officials said Friday they are pressing forward with their exploration of community choice aggregation (CCA), an alternative energy system that experts say can offer cheaper and greener electricity to ratepayers.

A memo signed by the city's director of economic development said the city will soon hire a consultant to develop a CCA business plan. That action that was originally planned for a vote at the City Council in January, but the memo indicates Mayor Kevin Faulconer has already directed staff to proceed.

Nicole Capretz, executive director of the nonprofit Climate Action Campaign and one of the main proponents of community choice, hailed the decision as a victory for fighting climate change.

"We commend the mayor's leadership," she said. "We're confident that once the business case is done, it will show that community choice is the best pathway forward to reach 100 percent clean energy, and it will cement the mayor's legacy as a climate champion."

RELATED: San Diego Climate Report Shows Progress — Thanks To Whom?

A community choice program would allow city officials to decide where San Diego residents and businesses get their energy, and how much they pay for it. A peer-reviewed study released this summer found the program could offer more renewable energy, and lower rates, than SDG&E.

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Community Choice Memo

Community Choice Memo

A city memo lays out the next steps for San Diego's study of community choice energy.

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The memo also described the city's exploration of other programs that may allow the city to achieve 100 percent renewable energy by 2035. That goal is a key component of the city's landmark Climate Action Plan to reduce its greenhouse gas emissions, 24 percent of which come from electricity use.

SDG&E submitted a proposal to city officials that, the memo says, "allows an increase in renewable energy content over time to reach 100% renewable for program participants."

Early versions of the proposal, disclosed through public records requests, describe it as an expansion of the utility's EcoChoice program that allows customers to choose 100 percent renewable energy for their home or business. The memo states the city will conduct an outside review of SDG&E's proposal to determine if it is viable.

The Clear The Air Coalition, a group of community choice skeptics backed by SDG&E shareholders, released a statement also applauding the city's decision to further evaluate the program.

"We believe it’s prudent to wait for state regulators to determine how much a CCA would cost taxpayers so that everyone better understands exactly what the costs and benefits would be for San Diegans as well as ratepayers in neighboring communities," the statement said.

The community choice feasibility study found that a dramatic increase in the so-called "exit fee" that the utility can charge CCA customers could put the program at risk. State utility regulators are in the process of reviewing how those fees are calculated.

SDG&E has lobbied in Sacramento against the expansion of community choice programs statewide. Locally it is prohibited from lobbying against the program, but the utility's parent company has formed an independent marketing district, Sempra Services, that can lobby on community choice.

A KPBS investigation earlier this year found Sempra Services lobbyists had met with elected officials prior to receiving approval from state regulators.

A community choice program still needs final approval from the City Council. The Climate Action Plan set a deadline of Dec. 31, 2020 for that decision.

San Diego is moving forward with a business plan for a community choice energy program. Environmentalists who support the program and skeptics are both claiming victory.

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