San Diego’s City Council agreed Monday to move forward with a bold but controversial plan for energy independence.
By a 7-2 majority, the council authorized Mayor Kevin Faulconer to negotiate the creation of a public agency that would buy electrical power for city residents.
The agency could eventually include many other local cities and the county’s unincorporated communities.
The program is called “Community Choice Energy,” or “Community Choice Aggregation.” It is modeled on similar public agencies that have displaced their local, investor-owned utility in favor of a public-purchase model.
Advocates say Community Choice will generate savings of between 3 and 5 percent on electricity purchases, compared to San Diego Gas & Electric.
Supporters of Community Choice also predict that San Diego will purchase more clean, renewable electricity faster than if SDG&E continues to make those purchases.
SDG&E would continue to operate the transmission grid that moves electricity to customers’ homes and businesses. The utility would also continue to provide customer service and billing.
“We are committed to maintaining a cooperative relationship with the City of San Diego, regardless of whether it chooses to form a (Community Choice Energy agency) and procure its own energy,” an SDG&E spokesperson said via email.
Councilmembers Chris Cate and Scott Sherman opposed the city council’s decision to let Faulconer begin negotiations for a government-sponsored energy purchasing agency.
Sherman said the city’s problems with its Public Utilities Agency, which overbilled thousands of ratepayers for water service, is evidence that “the city has proven it cannot… successfully manage a utility company.”
Councilman Cate said “there is a potential for billions of dollars at risk for taxpayers,” if a quasi-government agency replaces SDG&E as the buyer of electrical energy.
But Nicole Capretz said the city’s in-depth study of the issue leaves no doubt that ratepayers will realize a savings and be insulated to some extent from future increases in electricity costs.
Capretz also said a Community Choice system will allow the city to purchase 100 percent clean, renewable electricity by 2035, ten years before the state deadline for full compliance on renewable energy purchases.
"Every time we do anything that uses electricity, we can have the confidence that it's clean, and that it's helping to reduce our carbon emissions and helping to tackle this climate crisis that we're in,” Capretz told NBC 7.
The mayor’s office said the creation of a Community Choice system is a years-long process. After forming a Joint Powers Association to purchase the electricity and appointing a board of directors, that board would then hire a leadership team and seek approval for an agency from the state Public Utilities Commission. The mayor’s office set a tentative goal of 2021 for purchasing its first supply of electricity.