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San Diego Mayor Faulconer Announces Support For Alternative Energy Program

San Diego Mayor Kevin Faulconer announces his decision to pursue a community choice program, Oct. 26, 2018.
Nicholas McVicker
San Diego Mayor Kevin Faulconer announces his decision to pursue a community choice program, Oct. 26, 2018.

San Diego's program would be the largest of its kind in the state

San Diego Mayor Faulconer Announces Support For Alternative Energy Program
San Diego Mayor Faulconer Announces Support For Alternative Energy Program GUEST: Andrew Bowen, metro reporter, KPBS News

Our top story on Midday edition. San Diego just took a big step toward buying its own energy supply. Mayor Kevin Faulconer says he's decided to support community choice aggregation to help the city reach its climate action goals. The Community Choice proposal would allow the city to takeover energy purchasing and price setting for residents and businesses a job now handled by San Diego Gas and Electric. The city council needs to approve the plan but the mayor's support was seen as crucial. Joining me is K.P. metro reporter Andrew Boe. Andrew welcome. Thanks. Morning is the mayor's announcement of support of surprise not a huge surprise. I would say I think that he saw the writing on the wall politically. There was as you mentioned already a fair amount of support on the city council there's been a lot of pressure on him from environmental advocates and other advocates of are proponents of community choice. He was extraordinarily cautious in the run up to this decision in part because there has been some funded opposition to this plan and he is just generally I think a cautious mayor in general but certainly a significant move. Not entirely unexpected but we can't you know understate exactly how big a deal this would be for San Diego. Most of our listeners will probably be wondering what this means for them. Will their rates go up or down. Most T.S.A. programs automatically enroll customers and then the customers can opt out if they choose. So people may not notice a difference when the city shifts to a community choice. If the city shifts to a community choice program most community choice programs also try to offer lower rates so that they that's an incentive for the customers to to stay with them as opposed to going back to the utility. The CCI programs can also offer extra incentives for different things like rooftop solar panels which some utilities have resisted in the past. Also charging stations for electric vehicles other things to support renewable and clean energy. And then because the community choice program is setting the rates the hearings on how much we're supposed to pay for our electricity actually happened here locally as opposed to up in San Francisco where the public utilities commission is headquartered. How is Community Choice supposed to get San Diego closer to its goals of 100 percent renewable energy by 2035. Yes so as you mentioned community choice allows a local government to purchase energy on behalf of its residents and businesses. So it essentially gives local governments control over their own renewable energy goals. San Diego of course has a 100 percent renewable energy goal by 2035. And so proponents saw this as really the only way to actually for the city to have control over that goal as opposed to being beholden to any decisions made by Estey Giani and state regulators and it's really important to state that that the 100 percent renewable energy component is it's not the only component of the city's climate action plan. But it is a very fundamental component of the plan and the city would not achieve these binding greenhouse gas reduction goals without substantially increasing its renewable energy portfolio and if it didn't then it would have to make reductions in other areas like transportation which would be very difficult. Not everyone is a fan as you mention of Community Choice who's opposing this move. Sempra Energy is says it doesn't categorically oppose community choice in general but it says that it won't work. In San Diego they say that it puts taxpayers at risk. You know what if this public agency screws something up and has to get bailed out. It also argues that that Cecils don't provide real meaningful reductions in greenhouse gas emissions. So rather they say that rather than creating new solar and wind farms they just signed contracts with existing facilities that are already producing clean energy and they're sort of just shuffling around existing resources. Now how do supporters of Community Choice counter those arguments. Well they say that Sempra Energy and as a company that has heavily invested in in natural gas sees the shift to renewables as a threat to their bottom line. Supporters of gamy choice also say that any risk to taxpayers can be minimized CCS can form joint powers authorities with between jurisdictions and that sort of creates a legal firewall between city government and SCCA program. So even if that community choice program runs into problems it's legally separate from the city and so are you know city services like libraries and police etc. are legally protected. They also say that because of oversight and protections in California NOCCA program has actually gone under here and I think the most important argument that they make is on the issue of commissioning new renewable energy facilities. They say CCs are actually doing that. And earlier this month the peninsula clean energy in the Bay Area just broke ground on a solar facility that they say will power up to 100000 homes per year. And a lot of these programs in California are just getting started. They're building Epler capitol so in the long run we could see more of that. If this is approved by the city council does this mean Estey genie is out of the picture as an energy supplier for San Diego. No not at all actually. PG&E would continue to deliver energy to customers. It would continue to maintain the grid of wires underground and over our heads and it would also build customers so Estey Geany certainly has a role to play. If San Diego does in fact create SCCA program it's sort of this public private hybrid approach to energy delivery and procurement for the next steps and how soon could this program be up and running. The immediate next step is for the mayor to get approval from the city council and that does appear highly likely a vote is supposed to happen before the end of the year. The formation of SCCA itself generally takes between one and three years. You have to set up a legal structure governance who you know who's going to sit on the board of this public agency and how are they gonna make decisions they have to hire staff of course and sign contracts for renewable for energy procurement. So we won't see a change in our our bills for a few years probably. And what are the next steps. How soon could this program be up and running. The immediate next step is for the mayor to get approval from the city council and that's supposed to happen or a vote is supposed to happen before the end of the year the formation of SCCA usually takes between one and three years. You have to set up a legal structure. Figure out how the governance is going to work who sits on the board and how they make decisions and they have to hire staff of course and sign contracts for getting actual energy projects. And so we won't see a change probably for a couple of years. I've been speaking with CBS metro reporter Andrew Boe and Andrew thank you. Thank you Maureen.

San Diego Mayor Kevin Faulconer announced Thursday he will pursue an alternative energy program that would see the city take over energy purchasing and price setting for residents and businesses.

The city's Climate Action Plan, proposed in 2014, states that San Diego must achieve 100 percent renewable energy by 2035, and community choice aggregation is laid out as one option to reach that goal. The mayor had entertained a second option proposed by SDG&E, but the utility withdrew its proposal in a letter on Monday.

If approved by the City Council, San Diego's community choice program would be the largest of its kind in the state. SDG&E would still take care of energy delivery, grid maintenance and customer billing.

Nicole Capretz, executive director of the nonprofit Climate Action Campaign and a chief proponent of community choice, praised the mayor's decision.

RELATED: Community Choice Aggregation Critics Want San Diego To Slow Down

"Today is a watershed moment that will transform both our energy and political systems," she said in a statement. "It's about the community taking control of our energy destiny and putting the public interest above corporate profits. We could not be more excited about this new day in San Diego."

Ratepayers can choose to opt out of the community choice program and allow SDG&E to continue purchasing energy on their behalf. Proponents of community choice say this introduces competition into the energy market and can put downward pressure on rates. San Diego customers pay some of the highest electricity rates in the country.

SDG&E's parent company, Sempra Energy, has been fighting against the city's exploration of community choice through an independent marketing and lobbying district called Sempra Services. It has argued the program, also called CCA, would put taxpayers at risk, and that community choice programs are only green if they manage to commission new renewable energy plants like solar or wind farms.

"The evidence indicates a San Diego CCA would not meet the city's goal of 100 percent clean energy by 2035 or create many new jobs, but it would create risk for taxpayers, who are ultimately the backstop of any government-controlled energy program," Lynn Reaser, an economist at Point Loma Nazarene University and ally of Sempra Services, said in a statement.

RELATED: Report: Alternative Energy Program Could Help State’s Utilities Meet Renewable Goals 10 Years Early

San Diego may consider minimizing any risks to the city budget by forming a joint powers authority that would be the official manager of the government energy program. Solana Beach is so far the only jurisdiction in the SDG&E service area that has already formed a community choice program, though several other cities in the county are exploring it as an option.

Faulconer had been waiting to make the final decision on community choice until after a key decision from the California Public Utilities Commission earlier this month. The state regulator made an adjustment to how it calculates so-called "exit fees" that community choice programs pay to reimburse utilities for obsolete contracts they signed with energy providers.

The mayor is expected to give more details on his plan in a press conference Thursday afternoon, where he will also present an annual progress report on the city's greenhouse gas reduction efforts.

Climate Action Campaign's Capretz said she expects the city to take up to two years to fully set up a community choice program, which involves hiring staff, lining up energy procurement contracts, securing regulatory approval and establishing the program's governing structure.

San Diego Mayor Faulconer Announces Support For Alternative Energy Program
San Diego Mayor Kevin Faulconer announced Thursday he will pursue an alternative energy program that would see the city take over energy purchasing and price setting for residents and businesses.

Our top story on Midday edition. San Diego just took a big step toward buying its own energy supply. Mayor Kevin Faulconer says he's decided to support community choice aggregation to help the city reach its climate action goals. The Community Choice proposal would allow the city to takeover energy purchasing and price setting for residents and businesses a job now handled by San Diego Gas and Electric. The city council needs to approve the plan but the mayor's support was seen as crucial. Joining me is K.P. metro reporter Andrew Boe. Andrew welcome. Thanks. Morning is the mayor's announcement of support of surprise not a huge surprise. I would say I think that he saw the writing on the wall politically. There was as you mentioned already a fair amount of support on the city council there's been a lot of pressure on him from environmental advocates and other advocates of are proponents of community choice. He was extraordinarily cautious in the run up to this decision in part because there has been some funded opposition to this plan and he is just generally I think a cautious mayor in general but certainly a significant move. Not entirely unexpected but we can't you know understate exactly how big a deal this would be for San Diego. Most of our listeners will probably be wondering what this means for them. Will their rates go up or down. Most T.S.A. programs automatically enroll customers and then the customers can opt out if they choose. So people may not notice a difference when the city shifts to a community choice. If the city shifts to a community choice program most community choice programs also try to offer lower rates so that they that's an incentive for the customers to to stay with them as opposed to going back to the utility. The CCI programs can also offer extra incentives for different things like rooftop solar panels which some utilities have resisted in the past. Also charging stations for electric vehicles other things to support renewable and clean energy. And then because the community choice program is setting the rates the hearings on how much we're supposed to pay for our electricity actually happened here locally as opposed to up in San Francisco where the public utilities commission is headquartered. How is Community Choice supposed to get San Diego closer to its goals of 100 percent renewable energy by 2035. Yes so as you mentioned community choice allows a local government to purchase energy on behalf of its residents and businesses. So it essentially gives local governments control over their own renewable energy goals. San Diego of course has a 100 percent renewable energy goal by 2035. And so proponents saw this as really the only way to actually for the city to have control over that goal as opposed to being beholden to any decisions made by Estey Giani and state regulators and it's really important to state that that the 100 percent renewable energy component is it's not the only component of the city's climate action plan. But it is a very fundamental component of the plan and the city would not achieve these binding greenhouse gas reduction goals without substantially increasing its renewable energy portfolio and if it didn't then it would have to make reductions in other areas like transportation which would be very difficult. Not everyone is a fan as you mention of Community Choice who's opposing this move. Sempra Energy is says it doesn't categorically oppose community choice in general but it says that it won't work. In San Diego they say that it puts taxpayers at risk. You know what if this public agency screws something up and has to get bailed out. It also argues that that Cecils don't provide real meaningful reductions in greenhouse gas emissions. So rather they say that rather than creating new solar and wind farms they just signed contracts with existing facilities that are already producing clean energy and they're sort of just shuffling around existing resources. Now how do supporters of Community Choice counter those arguments. Well they say that Sempra Energy and as a company that has heavily invested in in natural gas sees the shift to renewables as a threat to their bottom line. Supporters of gamy choice also say that any risk to taxpayers can be minimized CCS can form joint powers authorities with between jurisdictions and that sort of creates a legal firewall between city government and SCCA program. So even if that community choice program runs into problems it's legally separate from the city and so are you know city services like libraries and police etc. are legally protected. They also say that because of oversight and protections in California NOCCA program has actually gone under here and I think the most important argument that they make is on the issue of commissioning new renewable energy facilities. They say CCs are actually doing that. And earlier this month the peninsula clean energy in the Bay Area just broke ground on a solar facility that they say will power up to 100000 homes per year. And a lot of these programs in California are just getting started. They're building Epler capitol so in the long run we could see more of that. If this is approved by the city council does this mean Estey genie is out of the picture as an energy supplier for San Diego. No not at all actually. PG&E would continue to deliver energy to customers. It would continue to maintain the grid of wires underground and over our heads and it would also build customers so Estey Geany certainly has a role to play. If San Diego does in fact create SCCA program it's sort of this public private hybrid approach to energy delivery and procurement for the next steps and how soon could this program be up and running. The immediate next step is for the mayor to get approval from the city council and that does appear highly likely a vote is supposed to happen before the end of the year. The formation of SCCA itself generally takes between one and three years. You have to set up a legal structure governance who you know who's going to sit on the board of this public agency and how are they gonna make decisions they have to hire staff of course and sign contracts for renewable for energy procurement. So we won't see a change in our our bills for a few years probably. And what are the next steps. How soon could this program be up and running. The immediate next step is for the mayor to get approval from the city council and that's supposed to happen or a vote is supposed to happen before the end of the year the formation of SCCA usually takes between one and three years. You have to set up a legal structure. Figure out how the governance is going to work who sits on the board and how they make decisions and they have to hire staff of course and sign contracts for getting actual energy projects. And so we won't see a change probably for a couple of years. I've been speaking with CBS metro reporter Andrew Boe and Andrew thank you. Thank you Maureen.

Corrected:
Editor's note: This story has been updated with comments from Ms. Capretz and Ms. Reaser.