Environment Report: Mayor Gloria Wants to Empty Public Power Piggy Bank

Mayor Todd Gloria clawed back money that San Diego Gas & Electric shareholders pay the city to do climate projects and pursue a public takeover of San Diego’s energy grid in his most recent proposed budget. 

This is the third time I’ve recorded Gloria sacrificing climate change-related policies in the wake of a city budget deficit, like not funding a building decarbonization position and eliminating climate money for underserved areas. It’s starting to look like Gloria is playing both Charlie Brown and Lucy van Pelt in that classic Peanuts football scene: Every time the mayor gears up to kick off a climate policy, his own budget swipes the ball away.  

But of all those examples, this one has large political implications.  

Let’s return to the spring of 2021. Gloria inherited negotiations with SDG&E over a new contract to be San Diego’s sole energy grid operator from former Mayor Kevin Faulconer. 

No other companies bid on the contract, so the city didn’t have anyone else with which to negotiate.  

Over the course of the negotiations, a movement for a public takeover of the grid from this private company took root. At least four council members signaled they might vote against the contract, threatening the two-thirds majority SDG&E needed to win.   

Now-Council President Sean Elo-Rivera was one of them. He argued the city shouldn’t ink a contract with a company that it was suing. He joined council members Joe LaCava, Marni Von Wilpert and former Councilmember Monica Montgomery Steppe calling for a five-year contract, instead of the 20-year one Gloria proposed. At the final vote, Elo-Rivera surprised many of his supporters by agreeing to another 20 years with SDG&E.  

Three days later, Elo-Rivera rejoined his franchise-resistant colleagues in a commitment to explore “alternatives to investor-owned utilities” aka public or government-run energy. They set up an Energy Independence Fund and promised to siphon at least $1.2 million of the $80 million shareholders paid to win the contract. It was supposed to act like a savings account so the city wouldn’t be caught resourceless in 2030 when the City Council has a chance to revisit the contract’s terms.  

If the city does cancel the contract, it has to refund some of the $80 million SDG&E shareholders put down to win the contract. The fund would be there to support that cost. In the meantime, some of it would be used to pay for public power studies.  

Except, Gloria’s proposed budget empties that savings account into the city’s general pot of unrestricted cash, called the general fund. There is just under $6 million in there now, according to the city’s Independent Budget Analysts. The City Council’s budget review committee will take up Gloria’s proposed budget this week.  

Gloria spokesperson, Rachel Laing, said the city’s facing hard decisions with budget constraints. 

“We looked to unused balances in special funds across the organization to help prevent steep reductions to core services, such as brownouts to fire stations, slashing library and recreation center hours, and  reducing neighborhood police patrols,” Laing wrote in an email. “The use of unused balances enables the City to preserve valued existing services and programs rather than cutting what people already are relying on.” 

Even so, Elo-Rivera told me Monday “it’s critical” that money be restored.  

“I was extremely frustrated with the lack of work and prep the city had done in the lead up to the last franchise negotiations,” Elo-Rivera said. “My commitment was that we wouldn’t allow that to happen again.” 

The city spent $1 million of that fund so far on a public power study, which concluded public power would eventually be cheaper than private. The city was supposed to do a second study (the city’s fourth on the matter) but if Gloria’s budget cut prevails, there wouldn’t be money to do that.  

Bill Powers (one of the leaders of a group called Power San Diego that’s trying to get public power on the November ballot) argued that the city’s studied public power enough and knows that it would work.  

“That money would be better spent in the general fund,” he said.  

Powers pointed to the state and city’s constitutions that say municipalities can create public utilities.  

“It’s legislatively very easy but politically, very difficult,” Power said.  

Responsible Energy San Diego, set up by SDG&E executives to fight public power, declined to comment.

In Other News 

• Mayor Todd Gloria’s director of sustainability and mobility (which executes climate-related policies) took a new job at the city of Solana Beach. Alyssa Muto starts her new job as city manager there next week. Heather Werner currently serves as the interim director. 
• ICYMI Lisa Halverstadt and I wrote about how leaked pollution from a shuttered chemical plant next to Gloria’s proposed mega-homeless shelter site caught the eye of state regulators, who told us they’ll be asking the city to dig deeper before building. (Voice of San Diego) 
• Imperial County sees more ‘dark money’ swirling around local elections. Those local boards and commissions manage large water contracts that are key to San Diego’s water security. (Desert Sun) 
• Hurtin’ for space, some in the Hillcrest neighborhood want to build a new park over state Route 163. (KPBS) 
• San Diegans are facing a massive water rate hike over the next two years. Same problem: Less water demand and growing maintenance and purchase costs. But the rainy winters mean less water sales, and less money for the San Diego County Water Authority to pay off debt. (Union-Tribune) 
• The city of San Diego might scale back its huge wastewater-to-drinking water project called Pure Water. (Union-Tribune) 
• A massive fire at the end of the Oceanside Pier took more than a day to control. (NBC 7) 
• SANDAG (the agency responsible for major decisions about regional transportation) named a new CEO, Mario Orso, former chief deputy of the local CalTrans district. He inherits a troubled agency marred by federal inquiry into management practices and poor oversight of its toll-collecting contracts. (Union-Tribune) 
• I guess there’s a free airport shuttle you can take from Old Town Transit Center. Ridership rose a whopping 73 percent between 2022 and 2023, according to the Union-Tribune.  
• Tammy Murga’s did some awesome reporting on how Coronado lifeguards deal with sewage contamination from the Tijuana River that reaches the city’s beaches. (Union-Tribune) 
• And inewsource’s Philip Salata wrote about the first lawsuit to drop against the massive lithium extraction project near the Salton Sea.