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San Diego City Council Approves Community Choice Energy Program

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The San Diego City Council voted Tuesday to create joint-powers authority to buy and sell energy in competition with private companies like San Diego Gas & Electric. The program is key to the city meeting its goals of reducing greenhouse gas emissions.

Speaker 1: 00:00 Earlier this week, the San Diego City Council approved the formation of a community choice aggregation or CCA program. It will allow the city to purchase power and then sell it to city residents. Lower prices and cleaner energy are promised as part of the agreement. KPBS reporter Andrew Bowen has been covering the story and joins us now. Andrew, welcome. Thank you, jade. So first, could you please tell us more about what community choice is and what it means for the city of San Diego? Under a community choice program, there's a local government agency that will decide basically where the electricity for residents and businesses comes from. Those sign contracts with maybe new solar parks, uh, natural gas facilities for our time, for the time being and um, and basically determine where that mix of energy comes from. They'll also get to set their own rates, which is why, um, lower energy bills as part of the promise.

Speaker 1: 00:53 Um, the community choice was really a central part of the city of San Diego's climate action plan. The city has to reduce its greenhouse gas emissions. And one of the main strategies is getting to 100% renewable energy by 2035, a four. A lot of rate payers, once this program is up and running, probably won't no notice much of a difference. Um, STG and knee is still going to build customers. It's still going to maintain the grid of wires that actually delivers that electricity. Uh, but rates could be cheaper. Um, city officials expect that it to be about 5% cheaper than SDG and e rates. And, um, so yeah, we'll see what's gonna happen once this is up and running in the timeline is about 2021 when they'll start actually delivering energy. And San Diego is partnering with four other cities in the program, Chula Vista, La Mesa, and Sunita's and imperial beach.

Speaker 1: 01:43 How will all those cities share power? Yeah, the cities are forming a, a what's called the joint powers authority. It's a legal entity in California and it's separate from each city. Um, so that was basically to protect each city's general funds that we'll have this separate government agency with representatives from each city. Um, but it's legally separate from each individual city. Every city will have one seat on the agencies, board of directors. And there was a desire pretty early on from the San Diego City Council to make sure that San Diego is kind of in the driver's seat, that they wanted to maintain more influence than the other cities because it's so much bigger. Um, and they also have their own goals on this. Um, you know, with renewable energy. So the terms of, of the, uh, this new, uh, agency will allow three members of the board to call for a weighted vote.

Speaker 1: 02:33 Uh, you, some listeners might be familiar with that. Um, we've talked about it in the context of SANDAG. Um, but each city's vote then each of the five cities will have a, a voting power that's determined by how much electricity they use. Um, their load and no city can have more than 49% of the weighted vote, which is kind of a compromise to say yes, since the city of San Diego is the big, um, you know, power broker in this agency, but it won't have a majority in, it still needs to forge some compromise with other cities to reach some kind of consensus. All right, now I'm going to go off on a tangent. Okay. I'm just going to ask now, after the water audit with the city, do we trust them? Do we trust the city to do this? You know, that was something that was brought up by one of the council members who voted against this proposal.

Speaker 1: 03:17 Scott Sherman. Um, councilman Chris cake was the other Novo, these are the two Republicans on the city council. And so Sherman referenced the city's Water Department, the um, the billing problems that they had. Um, there was an audit, um, calling out the department's slow response to fix some water meters. Um, so there, there is definitely some concern out there that this new agency, you know, I think it generally comes from, um, a general skepticism of government's ability to do things right. Um, two council members Sherman's point, it's a bit of apples and oranges, his comparison because as I mentioned, SDG and e will continue to maintain the grid. Um, so, so they'll still be responsible for, you know, fixing down to power lines or, um, billing customers. Actually making sure that each customer is, is uh, you know, getting the right, uh, uh, Bill. Um, but the, um, the only thing, so those things won't change.

Speaker 1: 04:14 The only thing that will be different is that this new government agency will be determining where all of that power comes from. And every member of the public at the city council meeting spoke in favor of community choice, but there were some discontent among them even. Tell us about that. Yes, there were a few, uh, points. So the local chapter this year as a Sierra club was concerned about language that discourages the use of nuclear energy, but does not outright ban it. Also the, uh, I'm one of the locals of the International Brotherhood of electrical workers. The union wanted stronger labor for division, wanted stronger labor provisions. So for example, when this new community choice program commissions a new project out there, um, you know, let's say a solar park in the desert, um, encouraging that, uh, that project to be built with unionized labor. Uh, the officials from the city said that both of these issues can be addressed by the community choice board of directors.

Speaker 1: 05:12 Um, this new government agency and it doesn't have to be the city council that makes these mandates. Um, and that at that point, once the, once this agreement came to the city council on Tuesday, the negotiations had already happened into to reopen them, uh, would have basically delayed the city beyond the point of, of being able to maintain their timeline. And proponents of the CCA say it'll bring both cleaner and cheaper energy. What's behind those claims? There are currently 19 community choice programs in California and the cities, one of the city's consultants on Tuesday said that all of them are offering cheaper energy rates than their incumbent utilities. So there is some a reason to believe that their, they will, they will be capable of providing, uh, lower energy rates, um, on greener energy. The state is already requiring all electricity in California to come from clean sources by 2045 but that's 10 years later than the city's own deadline of 20, 35.

Speaker 1: 06:08 So it's not enough to actually meet the city's goal of um, a in its climate action plan. Um, the city of San Diego is, uh, this community choice program will be the second largest in the state. So that means they will have more sort of, um, economy of scale, more power to actually commission new energy, renewable energy projects, projects. And so I think that's where that comes from, that they will actually be able to provide cheaper and greener energy. And what does SDG and e say about all this? They actually spoke in favor of this proposal on Tuesday. They were barred illegally from officially lobbying against community choice here locally in San Diego. Their parent company's Sempra energy did form a independent, um, lobbying group. It's basically funded by shareholders in that private company. And they had lobbied to slow down on community choice. Um, they tried to, so some skepticism in it, but they never officially opposed it. So, um, ultimately they lost a mayor. Kevin Faulconer announced he's gonna support this program and, and, uh, the city council agreed with him. So here we are. Here we are. All right. I've been speaking with KPBS Metro reporter Andrew Bowen. Andrew. Thank you. Thank you Jayden.

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Maureen Cavanaugh and Jade Hindmon host KPBS Midday Edition, a daily radio news magazine keeping San Diego in the know on everything from politics to the arts.