Will the next mayor take on SDG&E's monopoly?

By John R. Lamb

Renewable-power advocates favor a sort of local energy cooperative

“Ben Franklin may have discovered electricity – but it is the man who invented the meter who made the money.”

—Earl Warren

It likely comes as no surprise that San Diego Gas & Electric rates are some of the highest in the country. A Florida power provider recently determined that beyond southern California, only Fairbanks, Alaska, fares worse.

What may be surprising is that the topic of high residential utility rates has received little attention from the top contenders in the race to become San Diego's next mayor. Oh sure, mayoral hopeful and current City Councilmember Carl DeMaio lightly dips his toe in the matter by suggesting that permit costs for solar projects in the city be eliminated while power-purchase agreements should expand.

But scan the mayoral-wannabe websites of District attorney Bonnie Dumanis and state Assemblymember Nathan Fletcher for an energy platform, and you won't find anything—save, in Fletcher's case, for an endorsement from Mark Snell, chief financial officer for Sempra Energy, SDG&E's parent company.

And then there's the irascible Bob Filner.

Over the years, Filner has made no secret of his disdain for the local energy company and the power it wields over the region. Back in 2001, during the height of local panic over skyrocketing electricity rates in the wake of deregulation in California, Filner predicted in a commentary published in The Nation that “San Diego will soon be generating its own power.”

“If San Diego can emerge from the crisis with a new vision for our energy future, the nation will have gained a truly progressive alternative,” he concluded then.

That was nearly 11 years ago, and you could fit the progress made since then on the tip of a copper cable.

But last month, Filner teed it up for what East County Magazine called a “brainstorming session” among power experts who gathered on the topic “Forging a Sustainable Future.”

According to the magazine's report, Filner touched on subjects that are like nectar to progressives—rooftop solar panels throughout the city, designating a “czar of energy” for San Diego, even the possibility of renaming the city's Development Services Department to the Department of Livability and Sustainability.

“What if we decentralize and reduce dependence on fossil fuels?” the magazine quotes Filner as saying. When someone asks if he means “going off grid,” Filner agreed, adding, “We are a high-tech capital…. That's what we're going to do.”

Spin Cycle wanted to talk to Filner about his energy vision, but several attempts to contact the Congress member went unanswered. So Spin turned to long-time rooftop-solar advocate Bill Powers for his take on the region's energy future.

Powers, an electrical engineer and frequent critic of SDG&E, said the time to create a true municipal utility to replace SDG&E's investor-owned model probably came and went in 2002 right after the energy crisis. (In his Nation commentary, Filner noted that even the “staunchly conservative” San Diego Union-Tribune supported the public-power concept.)

When the crisis passed, “I think a lot of the air went out of the balloon to municipalize,” Powers said.

But times have changed, and new models are emerging. Mayor Jerry Sanders and the five-member county Board of Supervisors are big supporters of so-called property-assessed clean energy, or PACE, a program that allows local governments to finance renewableenergy projects on private property.

Last year, a consortium led by Sir Richard Branson of Virgin Records fame chose Sacramento and Miami to receive $100 million each in private investments through a PACE program to retrofit city commercial buildings with green energy and water conservation projects. Powers said the city of San Diego is seeking to launch a similar but more modest effort here later this year.

Then there's something called community choice aggregation, or CCA, which is taking off in the Bay Area—Marin County has one, and San Francisco will launch one this year. Powers, along with Solana Beach solar contractor Lane Sharman, have established what they call the San Diego Electric District Foundation in hopes of generating interest in pursuing an alternative to SDG&E under a CCA model.

Powers described a CCA as a kind of “local energy cooperative” in which SDG&E would serve as the conduit for energy purchased by participating local jurisdictions, which residents would have the option of joining. The county researched such a move at the turn of the century, but a 2005 report it commissioned determined that energy costs would rise as much as 2 percent in the short term before dropping 5 to 10 percent thereafter.

Even though the report failed to take solar-power generation into account, the mere suggestion of a temporary rate hike gave county supervisors pause, and they shelved the idea.

Powers said a CCA would be a “middle ground” between the status quo of an investor-focused private utility like SDG&E and the legal nightmare that would be a public takeover of a power company.

A public entity under CCA would have the ability to seek greener energy faster—Marin County wants half its energy fueled by renewable sources within five years, in contrast with SDG&E, which faces a state mandate to provide a third of its energy via renewables by 2020— while still relying on SDG&E's grid for distribution.

SDG&E did not respond for this column, but Powers believes the argument against would go something like this: If we lose customers to a public cooperative, then the customers who remain will have to bear the burden of the costly projects already underway, like the $2 billion Sunrise Powerlink transmission line.

The trouble with that argument, he added, is that the power company, in seeking state approval for such pricey projects as Sunrise, argued that demand for electricity will continue to rise. “If you're projecting your load growing 20 percent in 10 years,” Powers wondered, “how can you be upset that 10 percent of your customers leave in the interim?” Is he surprised that supposed free-market Republican mayoral candidates are silent on San Diego's power monopoly?

“It is what you would call an inconsistency,” Powers said with a chuckle.

Got a tip? Send it to johnl@sdcitybeat.com or follow John R. Lamb on Twitter @johnrlamb.