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Labor Fights Over the City's New Energy Agency Are Just Getting Started

Labor unions are looking to make sure their members are guaranteed work on what could be a boom in new energy projects funded by the city and other local governments. But the city attorney said the City Council can’t mandate union work, at least not yet.

CCA
Community choice aggregation supporters rally in downtown San Diego. / Photo by Adriana Heldiz

The city attorney’s office shot down a request by organized labor to require all new energy-related construction by the city to come with project labor agreements, which are union-friendly construction deals.

That’s a big deal now that Mayor Kevin Faulconer is creating an agency that would attempt to provide greener and cheaper power than San Diego Gas & Electric.

The City Council will take its first major vote on the plan Monday.

Labor unions are looking to make sure their members are guaranteed work on what could be a boom in new energy projects funded by the city and other local governments that may also join the agency.

But the city attorney said the City Council can’t mandate union work, at least not yet.

That’s for a variety of reasons. The biggest is it’s just too soon. The agency, known as a “community choice aggregator,” or CCA, doesn’t even exist yet.

San Diego is also negotiating with other cities and the county to create a new regional agency.

Politicians in San Diego’s suburbs and the Republican-majority San Diego County Board of Supervisors may be turned away from joining such an agency that requires all of its work to be done by organized labor.

“For example,” Deputy City Attorney Fritz Ortlieb wrote, “some potential [agency] members may have their own municipal restrictions on the use of [union agreements], and a [regional agency] may only exercise powers that all its members have in common.”

The agency won’t be formally created until perhaps this fall and it won’t actually start selling power until 2021, according to the city’s timeline.

Though the city attorney’s opinion leans on legal reasoning, it also spares the mayor from having to come out publicly one way or another on the unions’ demands. Instead, he can just point to the city attorney’s finding that what they want isn’t legal.

That could help him with fellow Republicans, like Councilman Scott Sherman, who have seemed open to the idea of forming a government-run utility but are opposed to any sort of giveaway to unions.

Faulconer is already fairly far out on a progressive limb since he came out in support of a community choice agency last fall.

Numerous local governments across the state have or are planning to go the same route, largely to meet climate goals that environmentalists say the state’s three monopoly power companies are not interested enough in meeting quickly or inexpensively.

At first, these “choice” agencies were meant to compete with the local utilities. In the near future though, it’s possible these agencies could become their own local monopolies. A group of community choice agencies in Northern California has urged Pacific Gas & Electric to leave the energy market and focus simply on maintaining its equipment so company-caused wildfires stop contributing to destruction and death. SDG&E wants to exit the energy market and instead focus on profiting from the power lines it would still own and can charge customers to use even if they are getting power from the city.

That means electric workers’ jobs will become increasingly dependent on governments.

There’s long been tension between environmentalists and labor unions, particularly in the energy sector. For instance, unions for electrical workers and coal miners both fought clean air regulations proposed by the Obama administration.

Within California, a local chapter of the International Brotherhood of Electrical Workers

in the San Francisco Bay Area has been particularly hostile to the community choice agencies, largely because PG&E, despite all its other faults and the scorn heaped on it by progressives, has long been a dependable source of union jobs.

Other electrical workers unions have embraced community choice, under the right conditions. Among them are electrical workers in Los Angeles County who decided to ride the wave of change in the electrical industry rather than get left behind – as long as that wave floated good-paying local jobs done by union workers.

In San Diego, there are two IBEW locals – Local 569 and Local 465. SDG&E employees are Local 465’s membership base. Local 569 represents over 3,000 other electricians.

IBEW Local 569 has long talked about wanting to ensure new city-backed energy projects are local and well-paid.

Last month, during a meeting of the City Council’s environment committee, the union made clear it expects the city to provide union-scale wages, labor deals for each construction project and the opportunity to unionize the government employees who work for the newly created agency.

It released a demand letter that was also signed by major San Diego environmental groups. The two clearly share some of the same goals, like local energy generation. But there’s not a total overlap between environmentalists, whose No. 1 goal is eliminating greenhouse gas emissions, and unions, whose No. 1 goal is good jobs for their members.

That tension isn’t unique to CCAs by any means. Sempra Energy, SDG&E’s parent company, built a giant green energy project – a wind farm – in Mexico, where it could avoid union labor costs.

Union officials also don’t want a repeat of the resistance they said they received from SDG&E when they tried to unionize call center employees recently.

“We strongly urge the City Council to include labor provisions to ensure any CCA in San Diego delivers on creating and protecting good, middle-class careers for working families as it prioritizes the development of local clean energy resources,” Gretchen Newsom, IBEW 569’s political director, said in a statement.

She pointed out the city attorney’s letter doesn’t prevent City Council from urging that jobs be done by union workers, it just says it’s “premature” to mandate labor deals.

Nicole Capretz, the head of the local nonprofit Climate Action Campaign who has helped shepherd the CCA into political viability, said there’s still time to get local labor guarantees.

“This is the only the first bite of the apple – I don’t feel like anybody thinks this is the end of the road,” she said.

Stepping back, it’s a bit remarkable that the current question isn’t whether progressives will get a big victory from the Republican mayor but rather how much of a victory they will get.

At the environment committee a month ago, there were a few interesting moments that showed there may be a few internal squabbles among Democrats over how far to reach.

The joint environmentalist-union demand letter asked for over a dozen different things from the new CCA. Most of those, with the exception of the assurances for the unions, are already in the mayor’s plan. So those demands make the letter a bit like walking into a bank with a gun and asking to make a withdrawal from your own checking account.

The rest of the wants are, as the city attorney concluded, a bit premature – not only legally but perhaps also politically. It seems almost certain Faulconer will be replaced by a Democrat and that the County Board of Supervisors – one of the biggest centers of Republican power left in the region – is going to turn bluer if not blue in coming years. So, unions may eventually get what they want, if their progressive allies stick with them.

When it came time for the environment committee to advance the CCA plan to the whole City Council, there was an interesting scramble. Democratic Councilwoman Vivian Moreno, who was elected despite union opposition, jumped on the microphone and asked to move the energy agency plan to the full Council without a recommendation and without taking a position on the unions’ requests.

Democratic Councilwoman Barbara Bry, a candidate for mayor in 2020 who could use union support, tried for a second to ensure that the committee endorsed the unions’ requests, but for procedural reasons it was simply too late.

Disclosure: Mitch Mitchell, SDG&E’s vice president for government affairs, sits on Voice of San Diego’s board of directors.

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