Our Power, Our Choice

Report Casts Serious Doubt SDG&E's Green Power Plan

Excerpted from the Voice of San Diego, March 29, 2018; by Ry Rivard

A San Diego city-funded review by an outside consultant found SDG&E’s offer to provide city customers with 100 percent green power “gives little or no information about the approach, costs or risks,” and may threaten the city’s ambitious Climate Action Plan to fight climate change.

Last fall, San Diego Gas & Electric said it could provide city customers with 100 percent green power in coming years. At first glance, the offer was remarkable for a company with “gas” in its name. But the company’s plan isn’t much of a plan, according to a new review of SDG&E’s proposal paid for by the city. The review found that SDG&E’s offer “raises more questions than it answers,” “gives little or no information about the approach, costs, or risks,” and may well threaten the city’s Climate Action Plan committed to 100% clean energy by 2035.

Right now, the power company is scrambling to maintain its monopoly. The 2015 Climate Action Plan says all electricity sold within city limits must come from renewable sources within two decades. Some city officials think the city could meet its goal and also provide cheaper power than SDG&E if it creates its own Community Choice Energy agency to buy and sell green energy. Mayor Kevin Faulconer’s administration has completed the CCE technical study, but has given SDG&E a chance to hold on to its monopoly, if the 140-year-old company changes how it does business

SDG&E said it could change. In October, it offered to team up with the city to buy green energy. The company would continue buying and selling power, but the city could have more control over what kind of power that was. The company’s offer was 130 pages long, but lacked many details. Some of SDG&E’s critics laughed at the proposal in private and worried it was just a delay tactic. For one thing, a unique partnership between a shareholder-owned power company and the city would require special approval by the California Public Utilities Commission – an unpredictable bureaucracy that works at its own pace.

The city hired a consultant, Oakland-based MRW & Associates, to pore over SDG&E’s offer. The just-released review is not flattering to the power company. MRW said SDG&E failed to offer details and certainty. That’s a problem, because if something goes wrong along the way, the city may be unable to meet its climate goals.

In a statement, SDG&E said the MRW review left out critical facts and context and offered to meet with the consultant and the city to talk more, plus it plans to respond to questions MRW said were unanswered.

While SDG&E is currently the greenest major electricity provider in California – about 43 percent of its power is renewable – it has historically been unable or unwilling to abandon natural gas, which it burns to create about another 42 percent of its power. So, saying it could try to get rid of gas was a big step in its own right. (This doesn’t count gas that is used in ovens and water heaters, just gas that is burned to make electricity.)

In its offer to the city, SDG&E seems to be waiting on the city to tell it what to do – what the company calls flexibility. But it’s possible this strategy is rubbing some city officials the wrong way, because they have repeatedly made clear what their goal is: to provide green energy across the city by 2035 – a goal the mayor has mentioned in each of his last four State of the City speeches. If city officials agree with MRW that SDG&E isn’t offering a clear and concrete way to make that happen, it’s possible they will conclude SDG&E is not a sincere partner.

The city simultaneously released a separate but related review by MRW. That review looked at the CCE technical study that the city released last year. The technical study concluded the city could provide greener, cheaper power by forming its own power-buying agency to compete with SDG&E.

MRW found a few problems with the earlier study. For one, it relied on a “crude” way of predicting SDG&E’s future rates. SDG&E’s allies made the same point last year to argue that the city might be unable to truly provide cheaper power than the company. Ironically, MRW found the very same in SDG&E’s own proposal, because the power company did not provide the city with ANY rate forecasts.