ORIGINAL REPORTING: Buffett’s Berkshire Hathaway Interested In San Diego
Warren Buffett Bids to Replace SDG&E
Herman K. Trabish, July 21, 2020 (cacurrent)
Editor’s note: The terms required of the bidders were announced…
San Diego will take formal bids for alternatives to San Diego Gas & Electric as its power supplier because of the upcoming expiration of the utility’s franchise agreement with the city. Billionaire Warren Buffet will bid into the city’s solicitation.
SDG&E’s 50-year franchise agreement, which allows use of San Diego’s rights-of-way for delivery of electricity and natural gas, expires Jan. 1, 2021. The city’s charter requires the franchise to come from a competitive solicitation open to all bidders, including SDG&E.
SDG&E, the Buffett-owned Berkshire Hathaway Energy, and Indian Energy, a small Orange County-based alternative energy solutions provider, responded to the city’s initial request for expressions of interest. With the highest electricity rates in California, many customers are dissatisfied with the utility.
“We definitely have challenges with SDG&E, and we want to leverage the franchise discussions to find a partner that will help San Diego reach its renewables and climate goals and build a modern grid,” City of San Diego Chief Operating Officer Erik Caldwell told Current.
San Diego’s Climate Action Plan calls for 100% renewables by 2035. It is supported by the alternative generation supplier San Diego Community Power that will launch in 2021. It will emphasize local distributed renewables. “We also want more accountability, through third party audits and a clear dispute resolution process. SDG&E hasn’t provided that,” Caldwell added. He stressed that the city wants “fair compensation for the largest franchise opportunity in the state.”
The City Council’s Environment Committee agreed on a 3-to-1 vote July 16 to endorse JVJ Pacific Consulting’s proposal that bidding start at $54 million for the right of ways to deliver electricity and $8 million to deliver natural gas. The next step is approval of the formal solicitation for bids, which requires a 2/3rds vote of the full City Council. The next franchise holder could earn an estimated $6.4 billion over 20 years. However, a key question is the length of new franchise agreement, JVJ’s Howard Golub told the committee… click here for more