Energy Democracy – Public Comment Guide – August 6th, 2020 City Council Meeting

City Council meeting
Thursday, August 6 @ 1 pm
Agenda
Viewing/dial-in instructions below

Public Comment Instructions

  • View: To watch the meetings, go to this link and click “Watch CityTV Live Feed” on the right hand side of the page
  • Dial-in: Public comment instructions (from the city)
    • 1. Wait for the Clerk to introduce the item you wish to speak on and open the Public Comment line, then call in by following the steps below.
    • 2. DIAL 619-541-6310 and enter the Access Code: 877861 then press ‘#’. 
    • 3. You will then hear “you are now being placed into the conference. You are now muted.’
      • You will be able to hear the proceedings through the phone line and WAIT for your turn to speak. 
    • 4. You will hear a system prompt stating “Your phone has been unmuted” THIS IS YOUR OPPORTUNITY TO PROVIDE YOUR PUBLIC COMMENT (This is not a question-and-answer period, this is your time to provide a statement.) 
    • 5. When prompted by the Clerk, please state your name for the record and what item your comment is for. 
    • 6. You will have the allotted time given by the Chair to provide your comments. Once your time has ended, you will be moved out of the queue and the call will be ended. 
    • 7. Participants who wish to speak on other items on the Agenda or for other comment periods please call back when the Clerk introduces those items or comment periods to be placed back in the queue. Please monitor the meeting via City TV OR ONLINE and not through the phoneline.
  • Written Comment: Prior written public comment instructions
    • If you’re not able to call in to either meeting, you can submit a written comment prior to the meeting
      • Here’s the form to fill out
    • You will need to specify whether you’re commenting on a non-agenda item or an agenda item
      • If it’s the latter, you’ll need to supply the agenda item number

Talking point suggestions

  • Prepare and practice your comments so they’re no more than 60 seconds long
  • Feel free to get personal – why does this matter to you?

General suggestions

  • [Start here] Hi my name is [name] and I am calling to urge the Council to vote no on the draft Invitation to Bid (ITB) for the City’s electric and gas franchises that is being presented to you today
    • Mention what city council district you’re in
  • The process that has led to the draft ITB has been rushed and unresponsive to public input, and its proposed parameters are far too lax
  • This is a pivotal moment for San Diego’s energy future, and we cannot afford a corporate giveaway to an investor-owned utility
  • Please vote no on this ITB and demand a better deal for San Diego
  • [Pick one of the two tactics below]
    • [Municipalization] Public ownership means San Diego keeps the money that would otherwise go to a utility and its shareholders
      • As has been made especially clear by COVID-19, the City needs revenue to fund vital services
      • By signing another franchise agreement, the City is forfeiting ratepayer dollars and allowing them to be the profit of an investor-owned utility
      • If the City created a municipal utility, the proceeds from ratepayers would accrue to the City itself
      • These funds could then be used to properly maintain energy infrastructure, keep rates affordable, fund local economic development, support the initiatives of the climate action plan, and boost public services 
    • Public ownership means lower energy rates that benefit all of us, but especially working-class families
      • San Diegans pay some of the highest rates for electricity in the state and the nation
      • If the average San Diegan household paid rates similar to those charged by the Sacramento Municipal Utility District or Los Angeles Department of Water and Power, they would save hundreds of dollars per year on their electricity bill
      • SDG&E’s high rates hit the most economically precarious people in our community the hardest, making it more difficult to afford other necessities
      • On the basis of lower energy costs alone, San Diego has a duty to ratepayers to pursue municipalization
    • Public ownership means faster adoption of renewable energy
      • Investor-owned utilities have a duty to their shareholders to maximize profits
      • This means that they will only increase their provision of renewable energy beyond legal requirements to the extent that it is profitable to them
      • This is why SDG&E has fought rooftop solar and the creation of CCAs
      • The people of San Diego care about climate change and want to do their part to transition to renewables, but SDG&E has attempted to block them from doing so because it would reduce their profits
      • With a public utility, the people of San Diego would have greater control of the transition to renewable energy
    • Public ownership means operating the vital public utility of energy for the public benefit, not to enrich investors
      • Investor-owned utilities have a duty to their shareholders to maximize profits
      • They seek to generate as much profit as possible, given the constraints of California Public Utilities Commission regulations and the terms of their franchise agreements with various municipalities
      • And as SDG&E has shown, it’s not afraid to violate the terms of its franchise agreement if it thinks it can get away with it
      • This is why SDG&E has been a bad partner for the City – like all investor-owned utilities, it operates in the interest of investors by design
      • Let’s reject that ownership model and instead design a public utility that operates in the public interest
    • [Stronger franchise agreement] A 20-year term is far too long of a monopoly to grant given the rapidly changing energy environment; we need a 5-year agreement
    • The agreement must explicitly guarantee SDG&E’s workers the ability to become employed at the new utility with wages and benefits that meet or exceed those they currently enjoy
    • The agreement must establish an Equity Fund that directs investments into communities of concern identified in San Diego’s Climate Equity Fund index; at least half of the Minimum Bid must be directed into this fund
    • Given SDG&E’s disregard for the terms of the current franchise, the next agreement needs much stronger mechanisms for accountability that directly impact the utility’s shareholders
    • The agreement should require local investments in renewable energy that benefit all of San Diego
    • We don’t need to settle for a bad deal – City Council can extend the existing agreement with no interruption of our current service until due diligence and democratic deliberation has occurred.

More detailed arguments for public ownership

  • The MRW and Associates report on the feasibility of municipal acquisition of gas and electric assets finds a very high likelihood of substantially lower costs with a public utility than with SDG&E
    • The report prepared by the City’s consultants makes a strong case for municipalization
    • The report finds that municipalization is economically feasible, that it is highly likely to save ratepayers money, and that interest rates make financing highly attainable
    • City Council needs a more in-depth analysis of pathways to public ownership in order to make an informed decision about whether to pursue that path or to grant another franchise
    • With municipalization, San Diego can use funds that would otherwise go to shareholders to invest in renewable energy infrastructure and keep rates low for working-class families
    • They find that ratepayers would pay less with a public utility than with SDG&E in all but a low probability, high-cost scenario for electricity and that they would pay lower rates in all scenarios for gas
    • The report says quote ”It is important to note that the High- and Low Cost scenarios are extreme: it is very unlikely that all the key variables will align either positively or negatively.”
    • It also notes that quote: “readers should view the results and conclusions of this report as draft and preliminary.”
    • Given that this preliminary assessment suggests significantly lower costs to ratepayers with a public utility, the City Council has a responsibility to its constituents to commission a thorough, final analysis before making any further decisions regarding San Diego’s energy future

Quotes from the reports favorable to municipalization

  • “Typically, community-owned utilities provide service at lower rates than investor-owned utilities.”
  • “The NewGen/Advisian/MRW team concluded that in the “Base Case” (the most probable of the various scenarios examined) the City-owned electric distribution utility is economically feasible.”
  • “They also concluded that in the “Base Case” the City-owned gas distribution utility would be economically feasible.”
  • “The electric distribution utility…would obtain control of about $121 million per year in State-mandated electric public purpose program which it could deploy for projects directly benefiting City residents and businesses.”
  • “In addition, the City would obtain control of approximately $17 million per year in natural gas public purpose program charges which it could deploy for projects directly benefiting City residents and businesses.”
  • “[F]ocusing solely on community-owned utilities, they typically provide service at lower rates than investor-owned utilities.”
  • “Typically, municipal energy enterprises:
    • Provide local control to pursue local policy objectives such as economic development or renewable energy development
    • Have rates lower than investor-owned utilities
    • Achieve high levels of customer satisfaction”

Background Resources

Documents

Information On (some of) SDG&E’s Antagonistic Behavior

  • Dispute between the City of San Diego and SDG&E over the Pure Water Project [PDF]
    • The City of San Diego has asked SDG&E to relocate infrastructure so that it can build a water recycling plant, SDG&E has refused
    • The City is currently suing SDG&E for the $36M it has had to pay the utility to move its infrastructure, despite clear language in the franchise agreement that states the cost burden should fall on SDG&E
  • City of San Diego in dispute with SDG&E over undergrounded power lines
    • Historically, undergrounding projects at SDG&E cost about $4.5 million per mile.
    • But some of the work has exceeded $10 million per mile, with other sections “potentially approaching $20 million per mile, without sufficient documentation to justify such increases.”
  • Passthrough of franchise fee to ratepayers (page 3)
    • The current agreement, for example, required SDG&E to pay the city 3 percent of the gross revenue it earned from electricity and natural gas sales to residents. Yet SDG&E was successful in the 1970s in getting the California Public Utilities Commission to let it collect the franchise fee directly from customers and pass it through to the city.
    • This sleight-of-hand has cost residents at least $1 billion to date.
  • SDG&E wants to add $10 fixed charge, nearly quadruple minimum monthly bill
    • San Diego Gas & Electric has asked the California Public Utilities Commission to allow the power company to institute a fixed charge on monthly bills. It also wants to nearly quadruple the bare-bones minimum it charges customers each month.
    • Opponents say it amounts to a one-two punch that will penalize customers who don’t use that much electricity and will especially hurt those who have installed — or are considering — rooftop solar.
  • SDG&E lobbying against CCA
    • After publicly lobbying on CCA last week before the county Board of Supervisors, officials with the SDG&E marketing arm, Sempra Services Corporation, said they’ve been meeting with lawmakers countywide on this issue since September. Those include San Diego Mayor Kevin Faulconer and several council members.
    • This lobbying caught the attention of the commission’s regulators, who said this week that SDG&E’s marketing division has never received approval to lobby on CCA. They also said they’re looking into the lobbying and that violations could be subject to fines as high as $50,000 for each offense.
  • History of Otay Mesa and Palomar power plant purchases
    • Direct CPUC intervention and pressure on SDG&E to purchase the (overly costly and unnecessary) Otay Mesa plant, conditioning its request to purchase the Palomar plant on the Otay Mesa purchase
    • Done in an effort to provide much-needed capital to an energy company struggling in the wake of the energy crisis fueled by the manipulation of deregulated energy markets by Enron, energy generators, and energy utilities
    • Utilities make money when they build power plants and transmission lines
  • SDG&E Takes Its Long-running Dispute Over Wildfire Costs to the Supreme Court
    • Witch, Guejito and Rice fires caused by improperly maintained SDG&E equipment resulted in $379M in damages that utility has tried to pass on to consumers through increased rates
    • The 4th District Appellate Court and California Supreme Court have rejected SDG&E’s request

References

  1.  2018 SDG&E average electricity rate ~$.235 kwh (per JVJ) and the average household used 5,493 kwh/yr (per USD Equinox Project) = $1,291/yr; 2018 SMUD average rate (per JVJ) ~$.135 kwh = $742/yr; 2018 LADWP average rate (per JVJ) ~$.17 kwh = $934/yr
  2.  JVJ, “Report to the City of San Diego Concerning Electric and Gas Distribution Systems” , page 5
  3.  JVJ, page 6
  4.  JVJ, page 7
  5.  JVJ, pages 6-7
  6.  JVJ, page 7
  7.  JVJ page 13
  8.  JVJ page 48