Why Faulconer’s Power Play Is Such a Big Deal
In deciding to form a government agency to compete with SDG&E, Mayor Kevin Faulconer broke ranks from a major corporate political player and one of the region’s largest employers.
San Diego plans to form its own electric utility to provide green power across the city, a major step that makes the city a leader in the fight against climate change, Mayor Kevin Faulconer announced Thursday.
The city believes it can provide cleaner and cheaper electricity than the region’s long-time energy monopoly, San Diego Gas & Electric.
Just a few years ago, it was unthinkable for most American cities to abandon electricity that came largely from burning natural gas or coal. Now, the city expects almost all of its energy to come from the sun and wind within the next two decades.
City officials also hope that other San Diego cities, including Chula Vista, La Mesa and Carlsbad, will join with it, meaning the vast majority of people living here may soon have clean power. Solana Beach already decided to form a similar government-run power-buying agency.
“I want San Diego to lead this region into a cleaner future,” the mayor said in a statement announcing his decision. “This gives consumers a real choice, lowers energy costs for all San Diegans, and keeps our city on the cutting edge of environmental protection.”
By 2035, the city would sell what it considers to be 100 percent renewable energy. The city still plans to rely on natural gas as a backup power source when the sun isn’t shining and wind isn’t blowing.
A group of international scientists recently warned that if governments do not adopt policies to dramatically reduce fossil fuel consumption now, global warming will begin to spiral out of control, contributing to more fires, flooding, destruction and human migration than it already has.
The mayor’s decision came perhaps with that in mind but also following months of frustration with SDG&E. The company – the region’s energy monopoly since it was founded in 1881 to sell gas – was unable to match the mayor and the City Council’s vision of a clean energy future. In deciding to form a government agency to compete with SDG&E, Faulconer broke ranks from a major corporate political player and one of the region’s largest employers.
That said, SDG&E isn’t going anywhere. If the city successfully creates its own power agency, SDG&E will continue to run the delivery system and continue to profit from delivering power, though it will no longer choose where that power comes from and what kind of power it is.
Some, including the San Diego Regional Chamber of Commerce, led by former Mayor Jerry Sanders, worry Faulconer has gone astray. In a statement released through a group skeptical of the city’s efforts, Sanders warned that the mayor is unnecessarily exposing city taxpayers to financial risks.
Praise for Faulconer’s decision in the face of Sempra’s lobbying overshadowed that, though.
“Against all odds and despite millions spent against our campaign by a multi-billion dollar corporation, we prevailed. We were relentless, persistent, and tireless,” the San Diego-based Climate Action Campaign said in an elated email blast to its supporters.
The group is led by Nicole Capretz, a former city staffer who shepherded through the city’s Climate Action Plan and has been laying the groundwork for the city to take on SDG&E ever since.
Capretz, a passionate and tenacious political brawler, said in a text message that the effort has aged her 20 years, but the mayor’s announcement was a huge moment and she’s thrilled.
Across the globe, hundreds of other cities are taking action to use carbon-free power. That’s power generated from sun, wind, water, the internal heat of the earth or a nuclear reactor. Power, in other words, that does not involve burning natural gas, coal or oil.
In the United States, several dozen cities, including a bipartisan group of mayors, have also set goals of having only 100 percent green energy within the next two decades. Some cities, like Aspen, Colorado, and Kodiak Island, Alaska, have already hit these targets.
But many of those cities are either smaller than San Diego or were founded near major rivers, which gave them easy and early access to hydroelectricity, a carbon-free leg up.
If Faulconer’s plan is successful, San Diego will be notable for moving away from fossil fuels. A decade ago, two-thirds of SDG&E’s power came from gas and coal. Now, the company buys no coal and about 45 percent of its power is renewable.
New state laws prompted that change, but SDG&E also bought more green energy than it had to. Despite that leap, the company’s move away from gas seems to have stalled out.
SDG&E owns and has long-term deals for a whole bunch of gas-fired power. It owns four gas power plants and is planning to spend $280 million to buy a fifth.
That said, Sempra and its allies have urged the city to just let SDG&E do its thing and move away from gas at its own pace. The company put out a vague plan to achieve the city’s climate goals, which the city eventually rejected.
Plus, the state has its own plans that SDG&E and the state’s other utilities have to follow: By 2045, the state wants all power to come from renewable sources.
“This historic legislation will achieve most, if not all, of the emission reductions targeted under the renewable energy goals of the city of San Diego’s Climate Action Plan,” Sanders said.
Faulconer’s administration disagreed. It felt the state’s goal is not only non-binding but too slow for the city, which since 2015 has had a binding goal of having 100 percent renewable energy by 2035.
That said, the city will still use some amount of gas-fired power for the foreseeable future, in part because of state regulations that require utilities to have reliable energy on standby for when the sun doesn’t shine and the wind isn’t blowing. The city, though, hopes that battery storage technology will become cheaper, allowing it to stop using natural gas backups entirely.
The city is also working with the San Diego County Water Authority to create a hydroelectric facility in East County that would act as a giant water battery to store solar energy for use at night.
Faulconer clearly believes Thursday’s decision will be fundamental for his legacy as mayor.
While Faulconer approved the Climate Action Plan that put him on this course three years ago, other events have overshadowed that. They include criticism of how aggressively his administration has moved to enact the Climate Action Plan but also other political matters like the convention center expansion debacle and, worse, the Hepatitis A outbreak that spread through downtown homeless encampments under his watch and killed 20 people.
While his decision to split from SDG&E had become one of the city’s worst-kept secrets in recent weeks, his administration declined to talk about the decision for days and went silent about his plans. Then, news of the decision appeared Thursday morning in The New York Times – a sign of how significant the move is nationally.
Indeed, Faulconer may have cemented a place for himself in city history and even the global climate change conversation as an environmental leader, a rare distinction these days for a Republican.
President Donald Trump’s administration, for instance, has gone the other way and proposed or enacted policies that will increase greenhouse gas emissions – by talking about increasing subsidies to the ailing coal industry and rolling back plans to make cars burn less gasoline.
But the mayor’s energy plan comes with a few ifs and buts – escape hatches that mean this mayor or a future mayor and City Council could reverse course, if they wanted. The city says its main two goals, beyond providing green energy, are to be cheaper than SDG&E and to be financially stable. If either of those things become doubtful, the city could pull back, something that local governments in the Inland Empire did in August on a similar effort.
For more on how the CCA effort will work and what’s next, check out this FAQ.
Disclosure: Mitch Mitchell, SDG&E’s vice president for government affairs, sits on Voice of San Diego’s board of directors.