SDG&E ‘Forgets’ to Tell Us that Key Reason for High Price of Natural Gas Is Their Owner’s Export of Huge Amounts of It

by on January 13, 2023 · 0 comments

in Energy, San Diego

By Craig Rose / Op-Ed San Diego Union-Tribune / Jan. 12, 2023

It’s easy to get lost in the explanations for the soaring natural gas prices causing enormous hardships for so many people in our region. Even before this surge, nearly 25 percent of us couldn’t pay our utility bills on time.

Most explanations for high retail natural gas prices focus on the soaring wholesale cost of the commodity caused by “market factors,” but a key factor is often omitted.

As we buy natural gas from San Diego Gas & Electric’s at retail, the utility’s parent company is helping to ship huge quantities of natural gas out the back door at wholesale. That’s a market factor.

Sempra Energy, SDG&E’s parent, has joined ventures investing billions in facilities and pipelines to export the gas that is now expensive here. The export business is so strong Sempra plans to flip a natural gas import terminal near Ensenada to a facility that will export U.S. gas from our region.

That could be a “new” market factor.

Californians need low natural gas prices today and a transition away from the fossil fuel as soon as possible to deal with the climate crisis. SDG&E and Sempra need high demand for gas today and into the future to pay off their huge investments in the fuel.

This is more than an isolated conflict of interest between us and SDG&E. It’s a pattern.

We need solar on every viable rooftop and parking lot to give us some control over energy, save us money and avoid the need for expensive and fire-causing power lines running through our backcountry.

SDG&E works to make rooftop solar adoption more difficult, claiming curbs on this key climate-saving tool are needed to protect against “cost-shifts.” What the utility doesn’t say is that rooftop solar is a competitor because investor-owned electric utilities like SDG&E generate large profits from building and operating long power lines — which rooftop systems don’t need.

The city of San Diego needs a parcel of public land to build its important recycled water project. SDG&E insists the city must pay — $100 million or more — to move the utility’s equipment from city land.

We need the lowest possible electricity rates to ease the path to electrifying everything. SDG&E charges the nearly the highest — sometimes, the highest — rates in the nation.

The list of conflicts goes on. If this was a marriage, a counselor might ask: “Have you considered a separation?”

The question would frighten SDG&E.

In its recent quarterly report, the local utility said that profits rose more than 30 percent from last year. SDG&E now extracts $3 million in profit every day from our region (including more than $1 million each day from the residents in the city of San Diego).

But separating from SDG&E and organizing a nonprofit, community-owned utility makes perfect sense for us. Critics rightly note that public utilities aren’t all perfect and they vary in success. Here’s a characteristic public utilities share: They all charge less — typically, a lot less — than SDG&E.

This was well known in 2021, when the San Diego City Council made the historic mistake of granting SDG&E a 20-year franchise to use our public land for its business. SDG&E could earn $20 billion from that agreement.

If the reality was unclear to the City Council then, it should be in sharp focus now. Our climate crisis is too deep and our crisis of affordability too serious to have a corporate utility opponent. We need a nonprofit, community-owner partner.

Fortunately, the city of San Diego can pull the plug on the franchise deal with SDG&E — at any time — to form a community-owned utility. It’s a right enshrined in the city charter and re-asserted in the otherwise unfortunate franchise agreement.

Public utilities already provide service to millions across the nation, including residents of Sacramento and Los Angeles. Beyond providing lower rates, their fundamental mission is meeting community needs, not maximizing profits and greed.

The San Diego City Council recently launched a study of forming a public utility. This will be at least the third such study. It’s time to move faster toward nonprofit, public power. And if the city accelerates its exploration and implementation plans, others in the county receiving service from SDG&E will likely follow.

Naysayers will scoff that San Diego can’t do big things. But the utility crisis teaches that if we don’t do big things, bad things will be done to us.

We’re past the point of cheap or easy solutions to our utility and climate crises. But it will be cheaper and faster to tackle these issues with a community-owned, nonprofit utility.

Craig Rose, is a former energy reporter at The San Diego Union-Tribune. He serves on the steering committee of Public Power San Diego and lives in Tierrasanta.

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