San Diego has ambitious plans to fight climate change. The plan depends on getting all electricity from renewable resources.
That could set up a showdown between the city and Sempra Energy, the parent company of San Diego Gas & Electric. SDG&E gets most of its electricity by burning natural gas.
Unless the company stops selling gas-fired power within city limits, the city could begin buying power for its 1.4 million residents from someone else. In doing so, the city would become a community choice aggregator, or CCA.
That dumb, confusing name masks a simple concept and a big debate: The city government and a Fortune 500 company are on a collision course. The cost, reliability and environmental consequences of everyone’s electricity is on the line.
Here’s an FAQ to get you caught up.
Why does the city care about electricity anyway?
State and local governments are trying to fight climate change, even if the federal government won’t. Since fossil fuel-fired electricity is a major source of greenhouse gases, these governments all seek to curb the use of coal and gas.
We Stand Up for You. Will You Stand Up for Us?
A good start, but the real answer is deregulation of the lines coming into our house, giving the current "government protected monopolies" some competition.
Yes, that was a bad experience with electricity in 1999-2000. I could list all the other things we take for granted that were also bad experiences in 2000 as well, but I think any smart person can do that for themselves.
Meanwhile, everyone reading this pays far, far less today for phone service for one simple reason - AT&T was deregulated years ago, which meant they then had to actually compete - for both price and quality.
I'm sure several in this comment stream are old enough to remember when you had to be concerned about simply calling a nearby community - one that was out of your "local calling area" because you'd run up per-minute charges. Not to mention $1/minute long distance - which was probably an inflation-adjusted $2-3/minute in 2017 dollars...
That is the exact same issue we have with electricity (and gas, and internet service) right now.
Only one who doesn't understand how electricity works - or how the billing systems work - would not understand how trivial it is today, in the era of smart meters, to have a system where we can all buy electricity from different suppliers, depending on who provides us with the best pricing and reliability.
If the idea of putting local government-controlled CCA's into competition with SDG&E is good, the idea of simply de-regulating it so that ANYone who wants to compete could do so - of course paying SDG&E a reasonable access fee for the installation and maintenance of the lines, as happens with phone lines.
In Texas - the "most deregulated" state for electricity in the union, the same kilowatt that WE pay upwards of 30 cents for costs UNDER 7 cents in Houston - and the inhabitants there have a choice of many power companies to buy from.
Have you heard of "rolling blackout" problems in Houston? No? Because IT'S NOW 2017, not 1999.
Look at your electric bill. Cut it by 75%. Imagine what you'd do with that money!
Debra Reed (CEO of Sempra) is the second highest paid executive in SoCal. A devoted Public Servant indeed, making TENS OF MILLIONS of dollars a year off all the seniors, single mom's, and people scraping to send their kids to college - so she can afford the private jets and vacation homes.
As with the entire executive group of Sempra (who pays out almost a BILLION DOLLARS A YEAR in stock dividends to shareholders...)
Yup. That's what I want to spend MY money on, because I'd feel guilty if she had to sell a jet or something. Much prefer my unemployed neighbor choose whether to buy groceries or pay the power bill this month (even with the CARE program...)
Deregulate the power lines. It's the only answer.
"too much money and too much corruption" truer words were never spoken! Although Brian Bilbray had the right idea he wasn't prepared for the corrupt rate fixing that the open market would produce. And Jay we ARE still paying for it where is the State when we need them?
I think this time we need regulations in place before we invest in the CCa's becasue we do have a GREAT need to change/clean up the way energy is produced! Believe me my husband worked ofr SDGE for 15 years and there were several accidental ( worker error) electrocutions that the Company shirked all responsibility and paid very low wrongful death claims-
As a matter of fact when my son was born 1971 the delivery and additional days in the hospital were all NOT covered- infact my son wasn't covered for 30 days- this is all with a union representing the lineman at SDGE.
But in this case we all live on this earth and we need to take care of the earth- as well as our children right David?
CCA's scare the crap out of me. I remember all too well the fiasco of introducing competition 1999 ... the blackouts and such, we are STILL paying for that mess today. The best thing cities can do is take over the entire utility within their borders like LA's DWP .. or fully and completely regulate local utilities, we get so screwed by SEMPRA and there is basically nothing we can do about it, too much money, too much corruption.
@Jay Berman And, because it was done wrong, once, we give up completely? Ever see one of those old film reels of all the times airplanes collapsed rather than fly - before the Wright Brothers? Good thing the Wright's didn't watch them...
Seriously - deregulation of the lines coming into our house (not just electrical, but gas and cable) is the only way to decrease cost and increase quality, if done right.
Look at your phone bill sometime. I don't know if you're old enough to remember when you had to be concerned about running up extra charges simply calling people "outside your local calling area" (calling, say, San Diego from Oceanside, for instance) or paying $1/minute for long distance, but that doesn't exist any more.
Why? Because the lines were de-regulated, AT&T was compensated properly for their installation and maintenance cost, and competition did the rest.
Obviously the answer.
Terrible idea. Puts cities at risk of bankruptcy , adds another layer of bureaucracy and pays millions to administrators who will do what SDGE already does. SDGE still does all the work of delivering energy, delivering & collecting bills , CCA just acts as a financial broker ...remember ENRON? If this was really a good idea they would put it to a vote instead of forcing people to join against their will.
This is such a bad idea its scary its even being considered.
This city is incapable of managing street lights at this juncture .
Buying and selling power is a fast paced and complex business. We are being asked to trust a city government that can't even keep the roads paved, pay for the pensions it promised, and agreed to a ticket guarantee for the Chargers???? I was born at night, but it wasn't last night. No Thank you.
There's one other big reason Sempra doesn't like this. SDG&E makes money by building things (energy generating structures, delivery lines, etc.) It gets a guaranteed rate of return on construction and maintenance thereof. This is one reason SDG&E loves to build new plants and why their assertions that those plants are needed must be evaluated in context of their inherent conflict of interest in saying so. All SDG&E has to do is convince the Public Utility Commission that the plant, for example, is needed, and SDG&E can then build it and bill ratepayers with a guaranteed profit built in. As we have seen, the PUC is not always on the side of ratepayers. Community choice would potentially end any further need for SDG&E to build new plants or other infrastructure, and thus create new revenue sources. They would be guaranteed a profit on delivering electricity and on what they've already built, but future growth would essentially be curtailed. Fortune 500 companies hate the concept of a o growth model that only provides income (even guaranteed income) at a fixed level. That's the big reason, in my view, that Sempra is fighting this.
This will most likely lead to an electricity crisis like the deregulation of 1999 - 2000 .. you can't defeat the physics of electricity by any laws .. there is no technology today that can replace conventional baseload generation.
@Jay Berman As I've describe above, wrong. The world of 2017 is far, far different from 1999, as anyone can see by simply looking at their phone.
Determining who is paying what company for which kilowatts is completely trivial in an era of smart meters.
Is there any plan to allow individual neighborhoods to setup their own microgrids? Then if an Arizona electrical worker knocks out power to southern California again, neighborhoods with solar panels and grid-tie batteries could quickly turn their own power back on instead of waiting hours for SDG&E to do it.
"...Around this argument is an air of concern that the city might not know what it is doing."
That summarizes my concern. When I look back at some of the fiascos in recent memory and consider the city cannot seem to get on top of such seemingly straightforward problems as filling potholes and getting it's police staffing anywhere near it's authorized level, you really have to wonder.
A "Climate Action Plan" which sets a target of 100% of electricity coming from renewables 18 years from now is harmless political posturing by people who will be long gone when the goal is supposed to be met, but now it appears we need to take steps pretty soon to start implementing this scheme. Uh oh!