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A new group known as the Clear the Air coalition has risen up to discourage the city of San Diego from taking on San Diego Gas & Electric.
The city wants 100 percent of electricity sold within city limits to come from renewable sources by 2035. SDG&E argues that it’s too risky and too expensive to abandon natural gas-fired power right now. So, the city is thinking about buying energy for its 1.4 million residents by becoming a community choice aggregator, or CCA. The City Council could vote on the switch in the next several months.
Clear the Air formed in mid-September to question and delay the city’s attempt to enter the energy market.
And with it, the battle lines are set as both sides mobilize their networks of partners who are, to varying degrees, open about their economic interests.
Clear the Air has 13 inaugural members, most of whom are well-connected to SDG&E, which has a history of fending off similar challenges to its monopoly in the past.
Three of them work for SDG&E or its parent company, Sempra Energy. Frank Urtasun is the head of a Sempra lobbying arm, Sempra Services Corporation. Lani Lutar is also a lobbyist for Sempra Services. Dan Hom is the CEO of Focuscom, a public relations firm that does community outreach for SDG&E.
Most other members come from or have deep ties to local business groups or nonprofits. Some of those groups, in turn, have significant financial connections to Sempra companies. Those connections are often not obvious to the public.
Stephen Cushman is a major donor to a food bank bearing his name that also receives donations from SDG&E. Cushman, a businessman, said that isn’t why he is skeptical of CCAs and joined the Clear the Air coalition. When he heard about CCAs, he called Sempra’s Urtasun to find out “what the hell” government was trying to do.
“I just don’t think it’s right that government should be getting into an area they know nothing about,” Cushman said.
In total, Sempra companies gave $7.5 million to charity last year and spent another $3.2 million on other kinds of donations and membership dues, according to a financial disclosure document that Sempra files with the California Public Utility Commission.
Among the company’s beneficiaries is Voice of San Diego, which received $30,000 from SDG&E last year, according to the CPUC filing. An SDG&E vice president sits on Voice of San Diego’s board.
A spokeswoman for Sempra Services said the company does not attach strings to its charitable work.
But several CCA supporters say they repeatedly run into nonprofit groups that take money from the company and then speak out in defense of SDG&E without disclosing the connections. CCA supporters and Sempra opponents say those connections can cloud people’s judgement.
“They get a dime, then they come in and say SDG&E should get dollars,” said Mike Aguirre, a former city attorney. Right now, Aguirre is fighting to prevent SDG&E from raising rates to pay for damage the company helped caused during the 2007 wildfires.
Two ministers in the Clear the Air coalition work with nonprofits that Sempra supports.
One, the Rev. Gerald Brown, leads the United African American Ministerial Action Council. He showed up to express concerns about CCAs during a summer meeting of the city’s Sustainable Energy Advisory Board and spoke out during a Clear the Air press conference last week at City Hall.
His 23-year-old nonprofit has a broad anti-poverty mission and received $15,000 from Sempra companies last year. Brown has defended SDG&E rates in the past, and said he’s now concerned about a CCA causing rates to go up.
Consultants have told the city it could provide lower rates than SDG&E under some scenarios, but not under others. Brown is worried about what happens if the city can’t compete with SDG&E on price.
“I have an obligation and a responsibility and a duty to question any taxes and fees,” Brown said in an interview.
Though he said during the press conference that he’s not an energy expert, Brown said he’ll speak out after he hears from people in the community about issues that might affect it.
Another minister, Terry Brooks, pastor of Bayview Baptist Church, is chairman of a Chula Vista-area charity that received $5,000 from SDG&E for a youth program. He said he joined the Clear the Air coalition because he wants to hear both sides of the CCA fight discuss the pros and cons – a debate he’d be glad to host.
“Some of it makes sense, not all of it makes sense,” Brooks said.
Other members of Clear the Air have less obvious interest in supporting SDG&E yet also have significant financial connections to SDG&E or Sempra.
SDG&E gave $27,500 to the San Diego County Taxpayers Association in 2016, according to Sempra’s CPUC filing. In recent years, the Taxpayers Association has had an operating budget of about $500,000, according to tax filings. An SDG&E representative and a Sempra representative both sit on the association’s board.
Haney Hong, the head of the taxpayers group, said his CCA skepticism arose naturally because of potential risks to taxpayers if the city gets in over its head.
“Just like Voice of San Diego, the association receives donations from numerous donors who support our role as the region’s taxpayer watchdog,” Hong said in an email. “The association has been an independent voice advocating for good public policy and taxpayer reforms for 72 years.”
Other recipients of Sempra’s money have an obvious interest in joining the Clear the Air coalition and supporting the company, which is one of the region’s largest employers.
The San Diego Regional Chamber of Commerce’s support seems like a given, for instance. The chamber said it went through a review process before it took a position on CCAs.
The Downtown San Diego Partnership is another example of a group that would naturally support Sempra: Sempra’s headquarters is downtown and Urtasun is a former chairman of the group.
The Latino Leadership & Policy Forum got $20,000 from SDG&E, which makes the power company one of the group’s largest donors – but the policy forum’s mission is to promote free enterprise, something a government-run power agency is arguably not.
Hom, the head of the public relations firm that does work for SDG&E, said he’s been following the rise of CCAs for years and believes tough questions need to be asked.
Tony Manolatos, spokesman for the Clear the Air coalition, said Sempra is “upfront about who our supporters are” – that’s true, but the group didn’t disclose that SDG&E is a supporter of many of its supporters. Then Manolatos challenged the tactics of the biggest pro-CCA group in town, the Climate Action Campaign.
“Who are these people or corporations pushing a program that the city has said could cost taxpayers billions of dollars?” Manolatos said in an email.
Nicole Capretz leads the Climate Action Campaign, perhaps the most vocal and prominent of supporters of the plan to move the city into the energy-buying business. She said the group’s corporate donors are on the group’s website but that she does not disclose grants that come from other nonprofits or private foundations.
Two companies have given $20,000 or more to become “juggernaut” sponsors.
One major donor is Sullivan Solar Power, a local company that obviously gains in a future with more solar energy.
The other major donor is Calpine, a Texas-based company that generates a lot of power by burning natural gas. Calpine also contracts with cities to run CCAs. That, Capretz said, is why the company is funding her efforts. If the city formed a CCA, Calpine may bid to do some of the consulting work, but Capretz said she wouldn’t be able to help them win such a bid.
“What we’re doing is creating a market for their business through policies that local governments are adopting,” Capretz said.
Capretz said she tries to step back and look at climate change as the biggest challenge in human history and that she is facing off against a company, Sempra, that wants to protect a status quo.
A few people have lined up in the CCA debate despite potential financial disincentives not to.
Bishop George Dallas McKinney is a board member at the SDG&E-backed United African American Ministerial Action Council but is in favor of the switch to a CCA and has supported the Climate Action Campaign.
Jack Monger, the head of the Industrial Environmental Association, is in the middle of two energy companies, because both SDG&E and Calpine are members of his organization. But he said there are too many unknowns right now to greenlight a CCA.
“Given that we do rely heavily on membership dues, some people might think we would stay quiet on this debate,” he said in an email. “But the fact is, at the moment the city doesn’t have all the facts and data necessary to make an informed decision, and that is what we have been saying over and over.”