Morning Report: Warren Buffet Might Break SDG&E’s Decades-Old Monopoly

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Morning Report: Warren Buffet Might Break SDG&E’s Decades-Old Monopoly

Power lines rise above homes in the Talmadge neighborhood. / Photo by Sam Hodgson

San Diegans pay for their private utility to rent public land and build stuff to provide energy. It’s a backward deal written into a 50-year-old agreement called the franchise fee. 

In 1970, the city had only one suitor maintaining the expansive system of electric poles, wires and natural gas lines. That’s San Diego Gas and Electric. 

But the lifetime of that deal is coming to a close. Come 2021, both parties have another chance to restate their vows to each other

Except, this time around, San Diego has some flash new suitors courting it. The energy arm of Warren Buffet’s Berkshire Hathaway, a behemoth multinational corporation, and a trimmer, indigenous-supported company called Indian Energy LLC, both proverbially sent counter proposals. 

Environmentalists and city officials see the newfound competition as an opportunity to renegotiate their proverbial prenuptials. Both want a shorter term and for company shareholders to pay more than they have in the past. Some want public commitments to renewable energy. 

San Diego won’t put a proposed deal on the table likely until July. 

Correction: A quote from Erik Caldwell that appeared in this story, “It’s the only amount of money that came out of shareholders’ pockets,” referred to SDG&E’s one-time $50,000 payment in 1970. Due to an editing error, the original placement of the quote suggested it referred to the yearly cost of the franchise fee.

San Diego Unified Will Have Physical School … But Only Half of Year Guaranteed

San Diego Unified trustees approved a new back-to-school plan at a special meeting on Tuesday. The district had been keeping its plans close to the vest and many parents complained officials weren’t engaging parents in the process

The new plan gives families two options: Students will be allowed to come back to school for five days a week, or they will be able to do full-time distance learning with limited opportunities to come to campus. 

The plan has one really big catch: For now, officials say they only have enough money to do physical schooling for the first half of the academic year. If the federal government doesn’t kick in more money, officials say they will have to revert back to distance learning. That’s because the increased cost of operating schools with social distancing will be too much to bear, they say. 

Speaking of social distancing, details were vague on what school might actually look like next year. Will students be required to wear a mask? That question wasn’t really answered. “There’s variability depending on how we implement that,” Superintendent Cindy Marten said. 

She seemed to be saying that whether students are required to wear a mask will depend on the individual setting and the activity students are taking part in. 

Another provision in the plan will allow teachers to stay home if they don’t feel safe coming back to school. Those teachers will focus on delivering online learning. 

Convention Center Expects Big Crowds in December

The San Diego Convention Center’s budget for next year anticipates cutting its workforce nearly in half, our Ashly McGlone reports.

That’s even after the Convention Center received a loan from the federal government’s paycheck protection program, passed in response to the COVID-19 pandemic, and assuming the building can begin hosting large conventions, with 50 percent attendance, beginning in December. It expects business to ramp up to pre-COVID-19 levels by next July.

The Convention Center had initially proposed a $40 million budget for the year beginning in July, when it assumed events would resume in August. It’s now plugging operating deficits for this and next year with the $4.3 million the Convention Center received from the federal government, and $9 million from the city, which is using the building as a temporary homeless shelter during the pandemic.

San Diego Adopts Housing Need for Next Decade

San Diego is on the hook to provide developers an opportunity to build 108,000 new homes before the end of the decade, with nearly 45,000 of those homes reserved for low-income residents, after the City Council adopted a state-mandated housing plan Tuesday.

Those state-mandated plans come from a failed and notoriously toothless policy: San Diego doesn’t have to do anything to compel developers to build those homes, and it won’t face any direct punishments if they don’t. The city just needs to show that its zoning and land-use regulations theoretically allowed developers to build the homes, and the city’s already square with that requirement. A city analysis showed developers can already build nearly 175,000 homes under current restrictions, including 72,000 for low-income residents.

The City Council did take another step in adopting the plan, though. The city will now also detail the housing needs, by income level, within each community plan area.

The San Diego Association of Governments decided how many homes the region needed to build under the state program, and dispersed that total among cities in the county. The city of San Diego embraced the agency’s decision to opt for a higher housing need, while many smaller and more rural cities objected to the agency’s procedure and pushed to be allowed to make way for fewer homes.

In Other News

The Morning Report was written by MacKenzie Elmer, Will Huntsberry and Andrew Keatts, and edited by Sara Libby.

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