Illustration by Adriana Heldiz

When San Diego and other cities created public power companies to compete with San Diego Gas & Electric, they promised the competition would create lower prices. But now as the comparison between the new groups and SDG&E is about to arrive in every customer’s mailbox, SDG&E is lowering its prices in a way the new competitors say is deceptive.  

Soon, ratepayers will receive a piece of mail comparing energy rates between the competing power providers. On it, customers will see the average monthly bill from San Diego’s new public power companies, which vowed to be cheaper or at least more affordable, are now generally more expensive than SDG&E, from a few cents to a full dollar more depending on the city in which you live. 

For the new agencies that promised lower rates, this is an unfortunate development and one they say SDG&E can’t sustain. They’re challenging the utility company’s price decrease at the state level.  

“This situation is temporary. We know SDG&E’s rates will be going up in 2023,” said Barbara Boswell, CEO of Clean Energy Alliance, a new government-run power company selling energy to Carlsbad, Del Mar, Escondido, San Marcos and Solana Beach.  

Cities all over California are banding together to form government-run power companies like Clean Energy Alliance to compete with private ones that have ruled the energy space for more than a century. They want to provide 100 percent renewable energy to participating cities faster and cheaper than the monopoly, investor-owned companies have been willing to do. Clean Energy Alliance, for instance, has a goal of being at least 2 percent cheaper than SDG&E, Boswell said.  

San Diegans will get this piece of mail comparing SDG&E and San Diego Community Power’s rates in the mail come September of 2022. / San Diego Community Power

The new agencies purchase the power and the utilities, like SDG&E, still manage the power lines that deliver it. Consumers were supposed to benefit from the option.  

June was a critical month for community power in San Diego as thousands of customers automatically rolled over from SDG&E to that service, as is required by law. Customers can choose whether to opt out of public power and stay with SDG&E for another year.  

Just before that date, SDG&E let California’s state regulator know it was lowering its rates, which went into effect June 1.  

San Diego’s two public power companies challenged SDG&E’s sudden price drop at the state Public Utilities Commission, arguing SDG&E is under-collecting money from ratepayers based on an inaccurate forecast of how much energy will cost the rest of the year. SDG&E will eventually have to raise rates again to make up for that under-collection in 2023, attorneys representing public power argued.  

That’s on top of what the utility already announced: a 9 percent rate hike in 2024.  

“If this is true … SDG&E customers are going to see some steep increases in January and that’s just not fair,” said Joe Mosca, chair of San Diego Community Power’s board during a July meeting.  

San Diego has two public power companies: one representing a group of North County cities called Clean Energy Alliance and another called San Diego Community Power, representing the cities of San Diego, Encinitas, La Mesa, Imperial Beach, Chula Vista, National City and unincorporated San Diego County. Both are just getting off the ground with Clean Energy Alliance only a year into its service and San Diego Community Power recently enrolling San Diego and La Mesa customers in May. 

This means people living in those cities will pay their respective public power companies instead of SDG&E for the actual energy they consume. Everyone still gets a bill under the SDG&E masthead, but there’s a new line item called “CCA Electric Generation,” which shows the public power charge.  

The disagreement at hand is over how much energy SDG&E predicts its ratepayers will need in the coming year. That’s called an energy sales forecast. Once the utility has a good estimate of how much energy their customers will need, then they buy the energy. That cost is divvied out to customers.  

Power lines along the alley behind North Park Towers / Photo by Ariana Drehsler for Voice of San Diego

In a June 13 response to public power companies’ protest of the alleged rate under-collection, SDG&E said it’s following the rules and direction from the Public Utilities Commission. The commission didn’t require the company to update its cost-of-energy forecast, the company wrote. Public power companies had an opportunity to ask state regulators to ask SDG&E to make such an update, but they did not, the utility said.  

“This argument wholly lacks merit,” SDG&E wrote.  

SDG&E declined to comment further on the story, citing a state-mandated code of conduct. The utility added that it was making some changes in the timing of how it filed different forecasts with the state regulator, which SDG&E said should help make this process more efficient.  

This isn’t the first time someone fought SDG&E’s cost-of-energy forecast. The California Public Advocate’s Office, a government watchdog, took SDG&E to task over its 2021 energy sales forecast, arguing that, this time, the utility was over-collecting – or overestimating the cost of energy and therefore charging people more than it needed to.  

Though customers would eventually get a credit on their bill if the utility overcharges, that still creates an atmosphere of instability for customers who would suddenly see a spike in their energy bill.  

The Public Advocate’s Office argued SDG&E was using energy sales data from 2019 to predict how much it would sell in 2021. But people used a lot less energy at home that year compared to 2020, when the COVID-19 pandemic sent scores of people inside for most of the year.  

“That would have led to unnecessarily high rates and revenue overcollection from customers whereas,” said Cindy Li, who oversees the Public Advocate Office’s watchdogging over electricity pricing. “We’re trying to protect customers from that.” 

The boards of San Diego’s public power companies strategized how to explain that their price is temporarily higher than SDG&E’s in the upcoming rate comparison mailer. They continue to argue their energy is cleaner, about 50 percent renewable, while SDG&E’s hovers around 31 percent.  

At a July meeting of San Diego Community Power, board member San Diego City Councilman Joe LaCava said the big difference between public and private power also comes down to transparency over rates.  

“We’re not hiding or running away from it, we’re openly discussing it,” he said. “I’m pretty sure SDG&E didn’t open their doors to anybody …. on how they’re making their decisions.”   

Join the Conversation

11 Comments

  1. In my view, the real story is this: If you look at the chart, SDG&E may be a purported $1 cheaper, which is nothing, but SDG&E is doing that with 31% renewable power versus SDCP at 50%. Would you give a dollar for the planet? I would. But then check the 100% renewable option people can pay more for. SDG&E is charging people $195, where SDCP is charging $119. Wow! That’s more than a 60% markup. Seems like SDG&E is totally soaking people trying to do the right thing for our climate.

    1. I fully support your choice to pay extra.
      What I can’t support is the ability of these fraudulent little fiefdoms to FORCE everyone to join.

    2. Puget Sound Power rates in the greater Seattle are just $0.12/kWh for 100% renawable. San Diego’s 100% renewable rate of 0.60/kWh are way out of wack compared to the rest of the country. Somethis is very wrong with our Wind & Solar power generation, transmission, and distribution cost structure. Other electric utilities charge $0.09/kWh with 30-33% renewable power.

  2. “The boards of San Diego’s public power companies strategized how to explain that their price is temporarily higher than SDG&E’s in the upcoming rate comparison mailer. ”

    The NERVE of someone competing to lower the price we pay for energy! How DARE they!

    Imagine if we had true competition in providing our electricity. Imagine if we followed the AT&T deregulation model and allowed companies to pay a fee to use the power lines into people’s homes and then compete to provide the most cost-effective product.

    Why, that would NEVER work. I mean, all the AT&T deregulation did was end up creating nearly-free phone service, a cellular network, and more phone choices than you can imagine.

    Oh, for the days when we had to pay per minute to call the city next door, start all long distance calls with “remember, this is LONG DISTANCE so we can’t chat long”, and only had two choices of handsets – regular and “princess.”

    Much better than we have now.

    Deregulate electricity. Let’s see some TRUE competition, not just this fake competition between two government protected monopolies…

  3. Pay no attention to the man behind the curtain. Another series of empty or broken promises by the CCA cartel. If SDGE is too cheap , I say you give them a taste of their own medicine and drop your prices even more.

  4. Worth noting that SDG&E and the California Public Utilities Commission are both being audited currently – to investigate SDG&E’s outrageous electricity rates (the highest in the entire nation and rising rapidly). Seems like the state auditor should be asked to look into this question as well – is SDG&E fudging their numbers to artificially lower their prices right now in a deceptive way given their upcoming spikes in energy prices?

  5. If SDG&E can lower their rates now, it shows they’ve been overcharging. We should all be due refunds.

  6. So when is the CAA coming by to trim the trees, and underground our lines, and pressure wash the transformers/infrastructure? And want to have a breakdown on where the “green energy” is actually coming from. How do I know the CAA energy is actually green? Trust this government entity? No
    Thanks!
    Jim

    1. First thing to keep in mind is that SDG&E is required to maintain all the infrastructure and gets paid handsomely to do so. It’s one reason they always want to build more stuff, which is a big factor increasing prices. As for the breakdown of green energy, I don’t think there’s a reason to trust SDG&E any more than the CCA.

  7. I compared both options before making a choice to remain with Sdg&e. Yes, the cost was only a few dollars but with SDG&E at least I know what I’m dealing. Can’t see switching to a provider run by politicians in today’s environment.

  8. SDG&E has held us captive enough. Even with the perceived competition prices being higher, sticking with SDG&E is the definition of crazy!

Leave a comment

Your email address will not be published.

This site uses Akismet to reduce spam. Learn how your comment data is processed.