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San Diego is a leader in innovation, entrepreneurship and sustainability. The city’s Climate Action Plan harnesses those qualities and places us at the forefront of combating climate change.
Community choice energy, also known as community choice aggregation, would allow the city to establish a nonprofit to replace the public utility as the purchaser of power. CCA is key to ensuring the success of the climate plan’s ambitious 100 percent renewable energy goal.
CCA would allow the city of San Diego to invest in local sources of renewable energy and to provide ratepayers with clean energy options at lower costs. Currently, San Diego Gas & Electric owns a monopoly, and consumers do not have a choice.
A recent study commissioned by the city confirmed CCA as a viable option for San Diego, and Mayor Kevin Faulconer deserves applause for moving forward with a business plan to advance this program. The comprehensive business plan is essential in the development of a road map for how CCA will operate and how its success will be measured.
Although CCA is disrupting the status-quo utilities business model, it is not anti-SDG&E. A CCA program is actually a win-win. It is a collaborative partnership between the city and the utility. The city would be responsible for energy generation, while SDG&E would be responsible for energy distribution and customer billing, and would continue to get paid for providing these services. SDG&E would also receive “exit fees” to cover the costs of energy contracts to which they have committed.
CCA simply allows the city to set up a nonprofit organization, separate from the city, to purchase clean energy on behalf of the community. Consumers would have the freedom of choice – they could buy from the CCA or continue to buy from SDG&E. Competition is good. Having multiple energy options stimulates competition, which brings rates down. San Diego is an ideal location for CCA, because our climate creates opportunities for expanding solar energy sources and local startups are rapidly advancing battery and other renewable energy technologies.
CCA is the most efficient and cost-effective way to meet our goals of cutting greenhouse gas emissions by 50 percent and converting to 100 percent clean energy by 2035. We will also be able to reinvest the surplus in local renewable energy sources, and our rates would be set in a transparent manner by a local organization instead of by the California Public Utilities Commission.
Currently, San Diego has some of the most expensive electricity in California. SDG&E, our sole power provider, is an investor-owned utility with no incentive to keep costs low for consumers. CCA programs in the Pacific Gas & Electric service area have lower rates for 100 percent clean energy than SDG&E charges for 43 percent clean energy. The Center for Climate Protection estimates that California CCA customers would save $188 million more per year by the end of 2020 than what they would have spent with incumbent utility companies.
Business for Good, a coalition of more than 230 local business owners, recently sent a letter to the city in support of CCA. They explain their businesses are suffering because SDG&E’s monopoly and focus on shareholder profits are increasing energy prices. Adding choice to the marketplace makes rates more competitive for individuals and could also benefit San Diego small businesses, which account for more than 60 percent of San Diego’s taxable sales.
CCA will also stimulate economic growth by creating good local jobs as we invest in new sources of renewable energy. Renewable energy construction projects – building solar, wind and biogas facilities – create new construction jobs. Entrepreneurial opportunities and new jobs will also emerge from the innovation sector as research and development of renewable energy technologies becomes increasingly important.
Climate change looms large as one of the most significant global challenges we face. Given the lack of leadership and backward momentum we are seeing at the national level, California has more responsibility than ever to lead the fight against climate change. San Diego is poised to be a national leader on climate change. That depends on our ability to act swiftly to reduce greenhouse gas emissions. We can set an example as the largest city in the country to achieve 100 percent renewable energy reliance, and CCA is how we are going to get there.
Barbara Bry is the councilwoman representing San Diego City Council District 1. Rayman Khan is Bry’s policy adviser and Hilary Nemchik is Bry’s communications director.