Activists and some city councilmembers rallied outside San Diego City Hall on Monday in opposition to San Diego Gas & Electric's offer to continue as the city's electric and gas provider.
Last week, city officials revealed that SDG&E was the only company to bid on the city's electric and gas franchises. SDG&E offered $80 million — the lowest possible offer — for the right to keep its poles and wires on city-owned land.
Activists and some city councilmembers say the bid is a fraction of what the franchise agreements are actually worth, and that SDG&E — which reported $824 million in profits last year — can afford to pay more.
"The people of the city of San Diego should be walking away from this agreement with more financial gain than top executives at SDG&E," Councilmember Monica Montgomery-Steppe said at the rally.
A key point of contention is the proposed length of the agreements. The current franchise agreement was for 50 years. Activists say any deal lasting more than five years will make it difficult for the city to enforce the terms of the agreement. Such short-term deals are relatively rare, but have been struck between local governments and private utilities in Los Angeles County and Salt Lake City.
Mayor Todd Gloria's "invitation to bid" offered 10-year agreements with an automatic 10-year extension, which opponents say amounts to a 20-year deal. In order for the city to exit the deal after the first decade, a committee would have to find SDG&E in violation of the agreement. Then the mayor, plus six members of the City Council, would have to back the committee’s findings.
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Councilmember Sean Elo-Rivera said under these terms the city will not be able to hold SDG&E accountable to its promises. He added that a "cooperation agreement" included in the utility's bid was full of loopholes.
"SDG&E simply will not comply with terms they don't feel like complying with," Elo-Rivera said. "The contract and the so-called cooperation agreement aren't worth the paper they'll be printed on absent lock solid accountability measures."
Gloria is expected to enter into negotiations with SDG&E soon, with the goal of presenting a deal to the City Council sometime next month. Currently, the city and SDG&E are operating under a short-term extension of the previous franchise agreements that is set to expire on June 1.
The final deal presented to the council needs a two-thirds majority to pass. In other words, Gloria can afford no more than three "no" votes from councilmembers.
In addition to Elo-Rivera and Montgomery Steppe, Councilmember Joe LaCava also spoke at Monday's rally in opposition to SDG&E's bid. Councilmember Marni Von Wilpert has also indicated she prefers five-year franchise agreements to Gloria's 20-year proposal.
SDG&E spokesperson Helen Gao said in a statement: "We look forward to meeting with the mayor to discuss our bids and ways to implement a plan that ensures the development of the energy delivery system necessary to benefit all neighborhoods in the city."
