Council President Gomez Pushes Decision on Electric and Gas Franchise to the Next City Council

by on November 10, 2020 · 1 comment

in Energy, San Diego

San Diego City Councilmember Georgette Gomez – fresh off her defeat to Sara Jacobs for the 53rd Congressional District – is still Council President and on Monday, Gomez sent out a memo about the city’s electric and gas franchise that pleased many.

She announced that she will not place the franchise agreement on the council docket, which, significantly means the current council will not have a final decision on any agreement. The incoming council – with five new members – will rightly make the decision on the lucrative deal. The San Diego Union-Tribune quoted Gomez:

“Granting these franchises is a momentous decision for the City Council that should not be rushed, especially when a new Council and a new Mayor are about to be inaugurated. Unfortunately, the ambitious timeline and process initially presented to the Council and the public was not followed and, at this juncture, this is the most appropriate path forward.”

Gómez also requested Mayor Kevin Faulconer to write up a one-year extension to the existing agreement , held by San Diego Gas & Electric and which ends in two months. SDG&E has had the monopoly for a century. The five new council members will be sworn into office December 10 – along with Mayor-elect Todd Gloria.

Barbara Bry, who just conceded to Gloria, had earlier agreed with Gomez in wanting the decision to be made by the new council and having a one-year extension with SDG&E. “I think there’s a lot of homework that needs to be done before we move forward with these invitations,” Bry said in September.

Gomez’s announcement was expected to be welcomed by several environmental and political groups that have been critical of Faulconer’s terms established for the bidding process. Some believed the $80 million upfront fees required by Faulconer’s terms was way too low in comparison of the dough that would flow to the bidding winner over the 20-year agreement. Others have felt the bidding process was designed in favor of SDG&E, which itself has built up a bevy of citizen critics over the decades.

Craig Rose of the Citizens Franchise Alliance said, “The end of this 50-year deal should be our chance for a change.”

And Matthew Vasilakas, co-director of policy for the Climate Action Campaign, said:

“We have a lame-duck mayor, five council members going out. There’s no reason for us to rush on this, a generational decision, and have it be made by previous leadership.”

There has also been a call for the city to dump the bidding process and form its own municipally-run utility to oversee San Diego’s electric and gas system. This is what Los Angeles does with its Department of Water and Power, and what Sacramento does with its Municipal Utility District. Faulconer’s plan does calls for the city to look into that option if no qualifying bids are received.

At least two other companies had been interested in the franchise. Berkshire Hathaway Energy, a subsidiary of billionaire Warren Buffett’s Berkshire Hathaway Inc. and Indian Energy, based in Orange County, both had expressed interest.

On Oct. 23, the San Diego City Clerk’s office announced the city had received at least one bid that met the minimum qualifications, and SDG&E confirmed it, but there was silence about any other bids.

There was pushback from Faulconer’s office on the Gomez announcement.  “It is unclear why the Council President refused to schedule a vote of such importance when the current agreement has been a year in the making with both community and Council input,” said Aimee Faucett, interim chief operating officer, in an email to the U-T.

“It is irresponsible to San Diegans to disregard a potential agreement that enjoyed interest from the energy industry with over a billion dollars in revenue for San Diego’s climate and equity goals on the line. It is the obligation of the City Council to conclude the process by opening the bid(s) before we consider other alternatives.”

It appears Faulconer won’t get one of the last notches on his legacy belt because of Gomez’s decision to wait for the new council – a month away. But perhaps the citizens can reach a better deal or arrangement on this very important franchise. Power to the people!

 

 

{ 1 comment… read it below or add one }

Avatar Nanci Kelly November 14, 2020 at 8:21 pm

Frank, Thank you so much for covering this very important issue – one that will impact the environmental and economic well-being of San Diegans for two decades – the two decades that will also determine our climate future and the sustainability of the atmosphere for our children and grandchildren.

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