San Diego Community Power (SDCP), the local government agency created to speed up the transition to renewable energy, will officially start serving its first customers in less than two weeks.
The launch is the culmination of years of debate over whether governments can be trusted to purchase electricity on behalf of homes and businesses, or if that responsibility should stay with San Diego Gas & Electric, the region’s private utility.
Now, with SDCP ready to start powering municipal buildings like libraries, police stations and water pumps on March 1, the argument will no longer be theoretical in San Diego County.
SDCP is a “community choice energy” program, not quite a utility. SDG&E will still own the power lines, but SDCP will be responsible for purchasing wholesale electricity on behalf of customers in San Diego, Chula Vista, Encinitas, La Mesa and Imperial Beach.
For all the arguments over community choice that took place in San Diego, the concept remains obscure to many who are disconnected from the energy sector or local politics.
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"Most people probably won’t even notice that we’re here," said Cody Hooven, SDCP’s chief operating officer. "If they look at their bill, they’ll see a new line item with our name on it for the cost of generation of power."
Hooven is hoping power from SDCP will be cheaper than SDG&E’s. Either way, ratepayers can feel better about where the power is coming from. SDCP has pledged that 55% of its electricity will be carbon free, compared to SDG&E's 31%. Customers can also opt to buy 100% clean energy for a small bump in cost.
Phase two of the program's launch will come in June, when SDCP will start powering businesses. The final expansion to power homes is scheduled for 2022.
Chula Vista City Councilmember Steve Padilla, who serves on the SDCP board of directors, said the agency has been busy hiring staff, submitting filings to state regulators, inking energy contracts and putting together its communications plan. But the central mission remains accelerating the transition away from fossil fuels.
"Most of all, it allows folks to really begin to reduce that (carbon) footprint a lot sooner and a lot more broadly by offering that choice and incentivizing that (renewable energy) market," Padilla said.
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SDG&E has not exactly been an ally to SDCP. Hooven recalled her decision last year to hire a law firm to double check SDG&E rates — something she felt conflicted about given the firm's price tag, but which ultimately paid for itself many times over.
"Right off the bat they dug deep into rates and found an $85 million math error that ratepayers would have otherwise been charged," Hooven said. "To me it really showed the value that we bring to the table of just making sure that ratepayers are protected and that we're checking things for them."
Hooven said she had no reason to believe SDG&E's $85 million error was intentional — but she did wish the utility had been more collaborative in a recent disagreement over electricity rates.
Late last year SDG&E asked state regulators to approve a rate-setting formula that would have seen its own electricity rates drop right when SDCP was launching. Hooven feared customers would see the comparatively higher prices and opt out of SDCP.
But SDG&E's lower rates would not have lasted long: SDCP said they would not have covered all the utility's costs, meaning rates would spike later in the year to make up the difference. For SDCP, the damage to its launch would have been done already.
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SDCP and its supporters mobilized to stop the proposal, and in January the California Public Utilities Commission handed them a victory, approving an alternative that will result in stabler rates that SDCP can reasonably compete with.
"We've learned to be vigilant," Padilla said of the rate-setting disagreement with SDG&E. "We did dodge a bullet."
SDG&E said in a statement that officials from the utility recently held a meeting with SDCP staff and that both organizations are committed to frequent communication and mutual support.
"SDG&E has been working closely with SDCP to ensure the highest level of customer service for our mutual customers," the utility said. "Moving forward, SDG&E will continue to invest in the infrastructure needed to maximize the use of renewable energy and reduce greenhouse gas emissions, such as energy storage and electric vehicle chargers."
As SDCP grows to serve more customers, it plans on doing much more than just buying electricity. Last month board members approved a program that will pay premium rates for the development of small-scale renewable energy projects within the agency's five cities.
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Matthew Vasilakis, co-director of policy for the nonprofit Climate Action Campaign, said he hoped for a host of programs to incentivize electric vehicle charging stations, electrification of buildings that currently rely on natural gas, rooftop solar panels and other local renewable energy projects.
"The more we can start building local infrastructure incentivized by SDCP and our own revenue, the better off we're going to be in terms of building out our 100% clean energy future," Vasilakis said.
Hooven says aside from offering cleaner and cheaper energy, San Diego Community Power hopes to be more transparent and accessible than SDG&E. Board meetings are open for anyone to attend — virtually, as long as the pandemic requires it.
"They can talk to their elected officials and share what they think about their rates, about programs that we can offer, about what we’re doing well, what we should be doing better," Hooven said. "We hope to make energy a much more open concept for people and let them engage more than they probably have in the past."
