Update: Last Call for the Franchise Agreements

By Heather Hofshi, leader of SanDiego350’s Franchise Committee

By now many of you have heard that Mayor Gloria’s flawed franchise agreements with SDG&E have passed the first round of voting at the City Council. The second and final vote is slated for Tuesday, June 8th, and we urge everyone to turn out and let the mayor and council know that San Diego deserves better. 

So how did we get here? And where are we going next? 

The last energy franchise agreements, which give a utility company the right to use city streets and other property for their infrastructure, and give it a monopoly on providing gas and electricity, were signed in 1970 and expired in 2020. Mayor Faulconer had issued an ITB, an invitation for any qualified energy company to bid, for the new franchise agreements. When the bidding process ran up against the elections last year, then-Council President Gomez put off opening the bids until the new council could be sworn in.

The only bid was from San Diego Gas & Electric, subsidiary of fossil fuel giant Sempra Energy. As our franchisee for the last century, SDG&E has consistently fought any attempts to transition to renewable energy and deal with climate change, charged the highest rates in the state, and repeatedly broken faith with the city in pursuit of their profits. 

The bid was immediately deemed non-responsive by the new mayor, due to the massive changes the corporation demanded. Mayor Gloria instead initiated his own process, which included an early public feedback effort. Many members of SanDiego350, our allies, and the community showed up and consistently demanded:

  • A short term, preferably five years
  • Lower rates for ratepayers and families, especially in communities of concern
  • A strong Right to Purchase clause or “off-ramp”
  • Stronger accountability measures, including penalties
  • Strong commitments to partnering with the City to achieve 100% renewable energy
  • A Climate Equity Fund to invest in communities of concern
  • A serious commitment from the City to explore public power

The terms of Gloria’s new ITB, unfortunately, did not reflect the views of the community. And SDG&E submitted, not a contract with clear terms, but a memo pledging to work with the mayor’s office to negotiate one. Off into the backroom they went. They emerged with a deal broadly similar to Faulconer’s, despite Gloria’s insistence that it was vastly superior.

Of course, as in any business deal, the devil’s in the details, and these devils were particularly wicked:

  • A twenty year deal: ten years with an automatic ten-year extension, complete with a requirement that the City repay millions of dollars if it voted against the extension
  • A supermajority required to vote down the extension
  • No commitment to abide by the city’s Climate Action Plan
  • A payment structure that allows SDG&E to stretch the payments for their ten-year bid over twenty years– and if we leave, they never have to pay the full amount
  • No resolution to the ongoing litigation between the City and SDG&E
  • No payments into the City’s Climate Equity Fund until 2037
  • Climate Equity Fund payments of a mere $20 million over four years, a pittance compared to what SDG&E makes off of city residents

It came to the City Council for the first vote on May 25th. Unfortunately, despite nearly every councilmember and the mayor admitting in their comments that the deal was not a good one for San Diego, it did pass the first vote. Councilmember Elo-Rivera (D9), who had previously cast himself as a champion for both disadvantaged communities and the environment, broke with the other progressive councilmembers to vote in favor of the deal. However, we were excited and grateful to see Councilmembers LaCava, Montgomery Steppe, and Moreno stand up for their constituents and vote no.

Thanks to sustained efforts by our amazing volunteers and everyone who wrote or called in to the council meeting, we were able to move a few Councilmembers to demand some amendments:

  • Climate Equity Fund payments moved up to the first years of the agreements
  • A public power feasibility study in 2022
  • A fund to hold the necessary penalty fees aside in case the City opts to leave
  • A solar access fund, overseen by the City’s Environment Committee, revised to ‘at least’ (instead of ‘up to’) $10M

None of these provisions will happen by themselves. It will be up to us to help keep SDG&E and the City Council accountable for the promises they’ve made. Contact me (Heather) to get involved.

So what’s next? The final vote for this bad deal is slated for June 8th, 2021. Right now is our chance to stand up and let the council, the mayor, and this dirty fossil fuel corporation know exactly where we stand! 

  • If you live in Districts 1, 4, or 8, contact your councilmember and thank them for doing the right thing for San Diegans, and urge them to stand strong
  • If you live in Districts 5, 7, or 9, call and remind your councilmember of the promises they made when we voted for them– all ran on environmental and justice values that they are not living out
  • If you live anywhere in San Diego, make your voice heard! Write or call in to the council meeting, write a letter to the editor of your favorite newspaper, and spread the word on social media. 
  • Find your council district and how to contact your councilmember here.

Find our toolkit with call-in instructions and talking points here!

Thanks to everyone in our amazing community who have carried us this far. Let’s keep going and get San Diego the green future it deserves.

About Masada D

Masada Disenhouse co-founded SanDiego350 in 2011 and serves as its Executive Director. She is passionate about engaging volunteers and growing a powerful climate change movement.

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