ORIGINAL REPORTING: San Diego's pursuit of an energy transition partner amid dissatisfaction with SDG&E
Politics disrupts San Diego's pursuit of an energy transition partner amid dissatisfaction with SDG&E; The city's franchise renewal debate is looking past the incumbent utility and Berkshire Hathaway Energy to questions about the Boulder-Xcel municipalization fight.
Herman K. Trabish, Sept. 18, 2020 (Utility Dive)
Editor’s note: The City of San Diego announced the results of this process December 17. Only one utility, SDG&E, bid. It offered $80 million. The new Mayor, Todd Gloria, has not announced a next move. Local activists are calling for a harder push toward municipalization.
Conflict among city leaders over San Diego's energy future has left potential bidders for rights to be the city's utility, including incumbent San Diego Gas and Electric (SDG&E) and Berkshire Hathaway Energy (BHE), wondering what to offer.
City Council disagreement over the services and relationship the city should get with its next provider has blocked approval of terms for new utility franchise agreements, which expire in January. Dissatisfaction with SDG&E, which charges California’s highest power rates, did not lead to agreement on an Invitation to Bid (ITB) that will define requirements for power providers seeking to take over service for the city.
Would-be bidders now await an ITB from outgoing Mayor Kevin Faulconer. As in many municipalities, it is the city charter-required duty of the mayor to oversee a franchise renewal, even without clear guidance from the council.
"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," said Erik Caldwell, the city's deputy chief operating officer. The ITB "will be designed to find a franchisee that understands where the utility industry is going and will commit to leading San Diego there."
Faulconer and most stakeholders support the city charter-required competivitive solicitation for new rights-of-way (ROWs) to deliver electricity and natural gas. Three bidders, SDG&E, BHE and Indian Energy, a small, local provider, officially expressed interest and await the mayor’s attempt to define a minimum bid and other required terms in the absence of council approval.
Two major questions threw the ITB design to the mayor. What should the city get from a franchisee for potential billion-dollar benefits? Or should San Diego choose the popular option to form a municipal utility like those in Los Angeles and Sacramento? Council members largely agreed on their dissatisfaction with SDG&E, over high rates and unsatisfactory service, but not on what should be required of the next franchisee…” click here for more