For the last 50 years, the City of San Diego has had a franchise agreement with San Diego Gas & Electric. If you’re like me, you probably didn’t know much about the terms of that agreement. Fifty years ago, we didn’t have a Climate Action Plan and we weren’t nearly as concerned about greenhouse gas emissions as we are today.

That’s no longer the case. The new franchise agreement has been a hot topic for the last year. Over 100 people spoke for and against it at two recent City Council meetings.

On June 8, the San Diego City Council approved the new agreement allowing SDG&E to provide electric and gas service to the 1.3 million residents of the city for up to twenty more years.

How will this new franchise agreement impact the city’s goal of 100% renewable energy city-wide by 2035?   Let’s take a look at those elements in the agreement with implications for San Diego’s Climate Action Plan.

  • Pledge – SDG&E has pledged “good faith efforts” in helping the City of San Diego achieve its Climate Action Plan goals. Plus, SDG&E has made its own pledge to achieve net-zero greenhouse emissions by 2045. However, many are skeptical of these pledges since SDG&E’s parent company, Sempra Energy recently rejected a proposal to issue a report on how their assets and lobbying activities align with the international Paris treaty on climate change.
  • Climate Equity Fund – SDG&E shareholders will contribute $20 million to help advance the city’s climate equity goals, which include a recently-created Climate Equity Fund that will build parks, plant trees, and improve public transit in lower-income areas. SDGE is required to pay $2 million to this fund in each of the first five years of the deal.
  • Environmental Growth Fund – SDG&E will pay $10 million for various programs aimed at increasing access to solar power and rebates for residents living in historically underserved communities.
  • Community Choice Aggregation – The new agreement will not interfere with San Diego Community Power (SDCP), a community choice aggregator (CCA). SDCP will procure clean renewable energy for customers in San Diego, Chula Vista, Encinitas, and La Mesa.
  • Wildfire prevention – SDG&E has invested $3 billion in safety measures to prevent catastrophic wildfires. As part of this agreement, SDG&E will help the city prepare for our perpetual wildfire season and share valuable weather data with the city. In addition, SDG&E will prioritize undergrounding of power lines in wildfire-prone zones.
  • Municipalization – Many environmentalists are urging San Diego to form a city-owned utility and chart its own clean energy path. If the City of San Diego wants to pursue municipalization, it can nullify the franchise agreement after the initial ten years.

Serious concerns were raised by certain climate policy advocacy groups and other environmental organizations regarding some of SDG&E’s past actions in the areas discussed above, and the split vote by the City Council appears to reflect some unresolved concerns regarding SDG & E’s track record.

It remains to be seen if SDG&E will become a true partner in helping San Diego achieve its climate action goals.  To ensure that commitment, an independent audit will be conducted every two years. Unlike past agreements, this franchise agreement will now be front and center in the years ahead.

Article by STAY COOL Advisor Laura Schumacher.