The City of San Diego today opened the responses to the Invitations to Bid for the natural gas and electric franchises. SDG&E is the only bidder.
SDG&E submitted timely and comprehensive proposals on October 23, 2020, in response to the City’s recent Invitations to Bid for both franchises, which met the City’s requirements for a 20-year term and an unprecedented, combined $80 million payment. In addition, SDG&E adjusted certain provisions of the form contracts so that any ultimate agreements would comply with federal, state and local law and best utility practices. SDG&E’s bids (available on the City’s website Link to City of San Diego Website with SDGE Bids) include the following:
- Guarantees that a highly trained and local workforce with a record of high-level service will continue to operate the complex power grid, safely delivering energy to San Diego residents and businesses.
- Supports San Diego’s clean energy vision with continued adherence to clear operational benchmarks and expected clean energy performance metrics.
- Provides the City with a significant and steady revenue source at a time when revenues are shrinking due to the pandemic-induced recession. SDG&E on average contributes approximately $65 million annually to San Diego’s general and environmental growth funds plus an additional $65 million annually to accelerate the undergrounding of overhead power lines. The electric and gas franchise fees that SDG&E remits to the City are respectively 600% and 150% more than the typical franchise fee received by most cities for similar agreements.
- Allows San Diego and SDG&E to continue implementing one-of-a-kind accelerated undergrounding program to improve safety and aesthetics throughout San Diego neighborhoods. Approximately 75% of the lines in San Diego are already undergrounded and no other city or county in California has a similar accelerated program.
- Upholds San Diego’s climate leadership by continuing to integrate clean energy technology, such as energy storage and advancing zero-emission transportation by expanding the EV charging network, and the enablement of the City’s CCA.
- Continues to strengthen SDG&E’s partnership with local nonprofit organizations to advance racial and gender equity, as well as sustainability. Historically, SDG&E’s charitable contributions have averaged approximately $6-8 million annually in the San Diego region.
San Diegans depend on SDG&E to power their daily lives, and we are proud of our strong record in providing clean, safe and reliable service over the past 140 years. We have proven we are the best positioned and most qualified to meet the City’s environmental and service expectations, and the needs of the City’s new Community Choice Aggregation (CCA) program. Our 4,400 highly trained and skilled employees stand ready to deliver a bright energy future.
The existing franchise agreements were approved in 1970 and will expire on January 17, 2021. SDG&E formally requested that the City begin the process in April of 2018. The City engaged franchise consultants in September 2019 to develop recommendations for the franchises and City staff held multiple public workshops to solicit input on the franchises in February before former Mayor Kevin Faulconer issued the Invitations to Bid.
We want to be part of a constructive path forward and urge the City of San Diego to solidify its criteria and decision, and expeditiously select a responsible party to serve San Diego’s energy needs. We look forward to working with the Mayor and Council.
SDG&E remains steadfast in its commitment to the people and communities it serves and will continue to provide uninterrupted service and support throughout this process.
More information about SDG&E’s track record of serving San Diego can be found on www.PoweringSanDiegosFuture.com.