Last week, the San Diego City Council took the big plunge and decided, in a 7-2 vote, to start buying and selling energy.
San Diego, along with several neighboring cities, will shortly form a “community choice” energy agency, or CCA. This is something I’ve written a lot about over the past two years, because it represents a major shift in who controls both literal and figurative power in the region.
Right now, energy decisions are made by a private company, San Diego Gas & Electric, which operates under the somewhat watchful eye of the California Public Utilities Commission and, of course, the shareholders of its parent company, Sempra Energy.
In the future, a group of local officials and their consultants will make most major energy decisions for the region.
Some big questions remain unanswerable — for now. Exactly how much will the power cost? Where will all the power come from? We don’t know yet.
The city has always had two major goals. First, by 2035 it wants all the power it buys and sells to come without burning coal or natural gas. That’s to comply with the city’s goals of reducing greenhouse gas emissions.
The city’s second big goal has been to sell power that’s cheaper than SDG&E’s.
Beyond that, there’s still a lot to be sorted out. Most big decisions will soon be in the hands of a multi-city “joint powers authority,” or JPA. Acronym check: A JPA will run the CCA.
Who will be in charge of this thing?
San Diego, La Mesa, Encinitas and Chula Vista are among the cities that will help oversee the new energy agency, which will resemble other regional agencies, like the San Diego County Water Authority or the San Diego Association of Governments.
Leadership is important, of course, and one of the first big decisions will be picking the person who runs the new agency. The former head of the Water Authority, for instance, made major decisions that increased water supply reliability but also increased water costs, so much so that some farmers have been driven out of business. High energy costs could obviously prompt similar economic consequences.
Likewise, the new head of SANDAG, Hasan Ikhrata, has ruffled the feathers of North County politicians with his apparent focus on public transit (rather than freeways). Worries that a CCA leader could make decisions that ignore North County’s interests may be among the reasons several North County cities are hesitant to team up with the city of San Diego right now.
Will the energy be cheaper than SDG&E’s?
This has been one of the big promises of community choice energy agencies across the state.
At various times, the city has estimated it could provide cheaper power than SDG&E, but it isn’t technically bound to do that.
It also may become hard to compare rates in the future if SDG&E gets its wish and can stop selling electricity and become what’s known as a “poles and lines company.” SDG&E makes most of its money by charging customers for the delivery of power, not from the actual power it sells.
One of the votes against forming a CCA came from City Councilman Scott Sherman, who argued that the region wasn’t offering residents much of a choice at all. Instead of a government-regulated monopoly (SDG&E), residents and businesses will get a new government-run monopoly (the city’s CCA).
Where will the power come from?
This is going to be a source of debate for years to come. There are huge opposing forces here.
An upstart CCA buys all of its power from existing power plants and wind or solar farms, something that doesn’t necessarily mean the city is helping to reduce greenhouse gas emissions. Then, as it collects money from reselling that power, it can invest in new power projects.
Unions and contractors want to make sure any new power projects employ local workers. But land in San Diego is expensive, which is part of the reason why SDG&E and others have built solar and wind farms in rural parts of California or even in Mexico.
This could put local projects with good-paying jobs into conflict with low-cost power.
There are, however, lots of parking lots and rooftops that could support solar power in San Diego. Plus a CCA would likely be more interested in subsidizing residential rooftop solar than SDG&E is.
Another way to reduce project costs is to build in low-income areas, where land is less expensive. City Councilwoman Monica Montgomery has already made clear she’s worried about projects being forced into her district.
There might also be conflict among cities over where a project goes, since a new project could generate property taxes for the city it sits in.
There will also likely be disputes over what kinds of power the CCA should and shouldn’t buy. Even though nuclear energy doesn’t generate greenhouse gases, a segment of the environmental movement now opposes using it because of other dangers.
Do we have to keep calling this a CCA?
The city will try to come up with a nice new name for its agency so we can all stop using the term CCA.
There’s something else to keep in mind.
One of the advantages of a government-run energy agency is that people can have more say over how it operates than they can over, say, SDG&E. That is, if people show up.
Some agencies, like SANDAG or the Water Authority, have often skated along for years without much public scrutiny.
That said, efforts to combat climate change are top of mind now – following years of drought and fire – and a few local nonprofits, like Climate Action Campaign and SanDiego350, are focused on energy issues and CCAs.
As the CCA gets up and running, it may seem like there’s more political fighting over how a CCA does its business than how SDG&E did its business. And that could be an early sign of things going south. But it could also simply be because governments are inherently more transparent than private companies, so issues — like labor relations — that were handled relatively quietly now spill out into the open.
It may be years before we know if the CCA has kept its promise to lower rates and reduce greenhouse gases, but we’ll know pretty soon how open, transparent and democratic the agency will truly be.
(Disclosure: Mitch Mitchell, SDG&E’s vice president of state governmental affairs and external affairs, sits on Voice of San Diego’s board of directors.)
Climate Action and Inaction
By now, most people have seen photos of the massive climate change protests last week. One of the young leaders who inspired those protests, Greta Thunberg, gave a gripping speech on Monday about how a generation of political leaders have failed to solve an existential threat.
“This is all wrong,” she said. “I shouldn’t be up here. I should be in school on the other side of the ocean. Yet you come to us young people for hope. How dare you. You have stolen my dreams and my childhood with your empty words.”
It almost always takes hell for change to come about.
Some people may have a fairly gauzy view of how our current environmental regulations came about. Some people think of the 1972 Clean Water Act, for instance, as a fairly rapid reaction to a pivotal disaster, the burning of Ohio’s Cuyahoga River in 1969.
But I recently read Dan Egan’s book, “The Death and Life of the Great Lakes,” and he points out the river burned in 1868 and “through the 1920s, 1930s and 1940s, yet never hot enough for politicians to curb the absurdity by holding the polluters accountable.”
Eventually, it had burned enough times, and at the right time, that people began to care. Only then did they do enough to stop it.
Yet we still haven’t lived up to the promises of the Clean Water Act. Recently, for instance, Gov. Gavin Newsom took a shot on Twitter at President Donald Trump’s administration for repealing clean water regulations. “Because,” the governor said, “who needs water anyway.”
But a map of California’s own waterways shows that almost everywhere there is a big body of water there is pollution. A state database shows more than 4,000 problems, known as “impairments,” in California waterways. That’s water that can sicken people, water that was supposed to be cleaned up by now thanks to a law passed in 1972. As I reported several years ago, the state has a system in place to try to clean some of this up, but it is a mess of its own making.
Pressure Mounting to Sign SB 1
Speaking of Newsom, he recently signaled he would veto Senate Bill 1, a measure led by Senate leader Toni Atkins that is meant to ensure that environmental protections that existed before Trump took office remain in effect in the state.
The main opposition came from water agencies that worry the bill could hurt their ability to supply the Central Valley and Southern California with water from Northern California.
Now, though, Newsom is under a lot of pressure to sign the bill into law rather than veto it. The Los Angeles Times said Newsom “just decided to carry Trump’s water.” San Diego labor leader Jerry Butkiewicz wrote about the litany of reasons the governor should sign it.
Perhaps the most impassioned piece I’ve read is from Caleen Sisk, the spiritual leader and tribal chief of the Winnemem Wintu Tribe in Northern California.
“Earlier this year, we, like many other tribal people in California, felt gratitude when Gov. Newsom apologized for the genocide that California waged against Indians. He issued an executive order to create the Truth and Healing Commission,” Sisk wrote in the Sacramento Bee. “But if the governor vetoes SB 1, he will continue that history of genocide.”
Not long after the governor was labeled as anti-science for his odd maneuvering on legislation to ensure children receive vaccines, the Democratic governor of California is being compared to Trump and to genocidal European settlers. Fair or not, one wonders if the governor may end up signing SB 1 after all.