A San Diego Solar Takeover — Episode 206 of Local Energy Rules

Date: 27 Mar 2024 | posted in: Energy, Energy Self Reliant States | 0 Facebooktwitterredditmail

Local solar offers relief from exorbitant electric rates, but San Diego may need a different utility business model to see dramatic savings.

For this episode of the Local Energy Rules Podcast, host John Farrell is joined by Dorrie Bruggemann and Bill Powers, Campaign Coordinator and Campaign Chair of the Power San Diego ballot initiative. They discuss how a publicly-owned electric utility would be more supportive of distributed solar, offer lower rates thanks to that solar, and what it will take to bring the municipalization decision to San Diego voters.

Listen to the full episode and explore more resources below — including a transcript and summary of the conversation.

Bill Powers: Those highest rates in the country that we’re paying have a big element of transmission and even distribution, but not distribution in the city, such that we can focus on solar to lower rates. And so our whole mantra is lower rates and how are we going to lower rates? We’re going to lower rates by maximizing solar and battery storage in the city. Not because it’s a feel good thing, even though it is, but because that is the most effective way for us to lower rates. So our whole mantra is Lower rates. Lower rates.
Dorrie Bruggemann: Yeah. So it’s really a win-win win because as it turns out, focusing on a very logical and sensible clean solution to our energy needs, which is local rooftop solar, is also the more affordable way of powering our city for our rate payers.
John Farrell: Why rent the grid when you can buy? That’s the appeal of Power San Diego ballot initiative campaign, asking residents to join them in addressing some of the highest electric rates in the country. In this episode, recorded in March, 2024, Bill Powers and Dorrie Bruggemann, campaign chair and campaign coordinator with Power San Diego ballot initiative, discuss the growing popularity of the campaign to change ownership of the electric grid in San Diego. I’m John Farrell, director of the Energy Democracy Initiative at the Institute for Local Self-Reliance. And this is Local Energy Rules, a podcast about monopoly power, energy democracy, and how communities can take charge to transform the energy system. Dorrie and Bill, welcome to Local Energy Rules.
Bill Powers: Thank you, John.
Dorrie Bruggemann: Thank you. Glad to be here.
John Farrell: Well starting with you Dorrie. One thing I love to ask my guests is how did they get to what it is that they’re doing now – that is, the exciting thing that we’re talking about on the podcast. So Dorrie, could you talk a little bit about what motivated you to join in on this campaign Power San Diego? Or do you have a background in clean energy or climate work or politics? What is it that got you here?
Dorrie Bruggemann: I would say the main thing that got me here at this moment in time was definitely some serendipity. I have experience in campaigning. I’ve worked on a couple campaign cycles as a field organizer, as a coordinator. But prior to this role, I had actually been working for a couple of years in tech for a tech company, and I had that position because I needed some stability in my life. After working in the 2020 campaign cycle, I got a little burnt out. I got a job that was stable, but I always knew that that was something that was going to be temporary. I knew that I wanted to find a job full-time in advocacy once I got my feet underneath me a little bit. So as 2024 loomed closer, I started looking at campaign jobs more and more. I knew I wanted to be engaged to some degree with a campaign, with something that was important to me. And environmentalism is a cause that is near and dear to my heart.

A lot of my free time here, since I’ve been living in San Diego, I’ve spent volunteering more in the urban planning, transportation sector of advocacy. But I was very lucky that I was told about this campaign and I was not a public power advocate. I didn’t know a lot about the energy space and about public power, but I was educated by people who I trusted and people who I respected with their environmental work. And I saw this opportunity and I wanted to jump in. It seems like a great cause and I’ve been very lucky to have learned a lot about public power since then. So it’s definitely a cause that I now care a lot about myself as well.

John Farrell: That’s great. I love the idea that you slew the political dragons in 2020 and were like, you know what? I want a bigger challenge. Let’s take on a monopoly utility this time.
Dorrie Bruggemann: Yep.
John Farrell: Maybe you wouldn’t describe it that way, but that’s the way I picture it.

Bill, tell me a little bit about how you got here to be working on this public power campaign.

Bill Powers: Well, going back 25 years, we had a major energy crisis here in California in 2000, 2001. And frankly at the time or just before that, I thought the So-called public utilities were like the fire department, the investor-owned utilities. And that was a wake-up call for me and I was working for myself. I’m a professional engineer, Powers Systems, working independent consultant and realized that I’m probably one of the few people who has enough freedom of movement to engage in this as an activist and working with nonprofits who often are right on the money with common sense and understanding what’s happening, but don’t have the resumes to be effective before the utilities commission or in a courtroom, that type of thing. And I saw that as added value I could provide to the process working with nonprofits in communities.

And fast forward, I think you and I met 10 or 12 years ago in California when it was a community choice aggregation conference in San Francisco. You had that wonderful opening slide of a hammer and sickle on a eastern European sedan to give a visual to all of us of what an investor-owned utility was all about, private monopoly. And so that one of the best images I’ve ever seen, John, so congratulations. But we were fighting for community choice aggregation, I know we’ll talk about it a little bit in this podcast, as maybe the holy grail. Maybe if we can get supply, then we can say we want rooftop or we want all these things that we think we should do and we’ll talk more about that. But community choice aggregation really hasn’t lived up to its promise out here in California. So I’ve been constantly engaged in pushing back not only on our local utility, San Diego Gas and Electric, other California investor-owned utilities, other investor-owned utilities in their holding companies around the country.

And yes, I agree with you a hundred percent. It’s basically the same story everywhere. And the same co-opted entities that are ostensibly regulating and looking out for the public are not doing it effectively. And so fast forward to last summer, it’s called exhausting your administrative remedies. I’ve done everything I can think of to try and change the bow of the boat with how the investor-owned utility is handling its infrastructure projects, rooftop solar. And I don’t think I’ve moved the bow of the boat much in all of those interventions. And so we have been talking for years out here about we have the fundamental right to provide utility services to our residents. We do have a public utility for water and wastewater. We don’t for electric, we don’t for gas, but we have a model here in town.

We also essentially, this relationship with our investor-owned utility San Diego Gas and Electric, not that different between you and your plumber, it’s a contractor. It’s just in a very elaborate contracting relationship, but it’s a contractor. And also in our city charter, we have the right to terminate that relationship at any time if we see it to be in the welfare of the residents to do so. And so at least last summer, paying the highest rates in the country, our utility has been relentlessly attacking rooftop solar for potential new owners. And it is now relentlessly attacking existing owners of rooftop solar with proposal for graduated fixed fees that would selectively hit existing rooftop solar owners. And so last summer it was, you know what? This is the right time. Our community is fed up with the utility. The utility is working in full daylight on all of these efforts to undercut everything we care about here. And this is a unifying issue for our community. Democrats, independents, Republicans, and we get a big election coming up, so we’re going to have everybody out. So over lunch at a restaurant, several of us who have been energy activists for a long time said, let’s just do it. Let’s just go for it. And that’s how it started. And that was Midsummer last summer and it’s picked up momentum from there.

John Farrell: You have a great short video that I saw on the campaign’s website, We Are Power San Diego, that outlines one major reason that you’ve been interested in public power high electric bills. You’ve kind of alluded to the issue around rooftop solar. Are there other reasons that you feel like have really motivated you or motivate people who hear about the campaign who are like, yeah, this is why I think this is a great idea?
Dorrie Bruggemann: So I think that high rates is really what we’ve been putting forward with this campaign because it’s such a nonpartisan issue. It’s something that really every person on every end of the spectrum can relate to, especially here in San Diego, which is one of the highest cost of living cities in the country. I would say a lot of people who care about the environment who are environmental activists, including myself, are the ones who really get excited about this campaign, really want to support this campaign on that level. So I think that that’s definitely a big thing that pushes people forward. But I like to tell people that there’s really no angle that you cannot wrap somebody into this campaign and show them why public power applies to them, whether it’s economic justice, whether it’s, I even like to say even if you’re a hardcore capitalist, it’s about anti-monopoly. There are a lot of reasons why public power is important in our region and why doing something about the SDG&E monopoly is important. So those would be the ones that I would highlight.
Bill Powers: Yeah, we actually assumed that our innate constituency would be existing rooftop solar owners, about 20% of the residential customers in San Diego have rooftop solar and we have a very high level of rooftop solar penetration. And to our chagrin, what we found is that this constituency that we intended to protect figured they were already protected. I got rooftop, I’m good. Good luck with your public power effort. No, no, no, you don’t understand. You’re about to get hit with this fixed charge that is specifically targeting you and you should care about this. But we have to talk to rooftop solar owners to let them know that no, you are not for now and forever forward free of the utility and the shenanigans that the utility can play.
Dorrie Bruggemann: And I would also add that there’s also just a general justice and accountability and transparency angle to public power. The fact that we have these for-profit monopolies that have really infiltrated our government, our systems, they have a lot of money in the community, in various, various avenues. They’ve been very strategic with how they’ve allocated their power and built connections. So if you’re somebody who wants the government to be free of corporate interests, there’s a lot to say about public power and what it means to shift the balance in society towards public ownership and more power to the people and more transparency in our leaders.
John Farrell: Can you talk a little bit about how on the costs, on the solar, on the corporate power, how does public power help solve these problems? Just to be really clear.
Bill Powers: Well, in our particular case, what public power and what we’re specifically addressing in this ballot initiative is we want to take the electric distribution grid in the city public. Transmission, interconnection with our distribution grid will stay with the investor-owned utility SDG&E. But what that would do is it would make us basically an island nation and we would have a toll booth with those transmission and distribution substations, meaning whatever we generate on this side of those toll booths is our business. Everything we bring in over those transmission lines, we have to pay the toll, which is the transmission fees and numerous other fees that our California Public Utilities Commission puts on that power. We would not have to pay those anymore if we are a local public utility. So what does that mean here? We pay the highest transmission charges in the country, San Diego Gas and Electric specifically, those charges are actually greater than a one-off commercial rooftop solar array on a Walmart or on a Costco.

And so though it sounds counterintuitive and our focus is our focus is primarily on commercial rooftop and parking lot or ground mounted solar in the city, not unlike those community solar arrays that you talk so much about in Minnesota, that kind of scale and as well as supporting residential rooftop, but those highest rates in the country that we’re paying have a big element of transmission and even distribution, but not distribution in the city, such that we can focus on solar to lower rates. And so our whole mantra is lower rates and how are we going to lower rates? We’re going to lower rates by maximizing solar and battery storage in the city, not because it’s a feel-good thing even though it is, but because that is the most effective way for us to lower rates. So our whole mantra is lower rates, lower rates.

Dorrie Bruggemann: So it’s really a win-win win because as it turns out, focusing on a very logical and sensible clean solution to our energy needs, which is local rooftop solar, is also the more affordable way of powering our city for our rate payers. In order to focus on this, we have to have public power because we need to have a utility that prioritizes sensible, logical solutions and doesn’t prioritize instead their profits and their shareholder values. So in doing so, switching to public power, we’re getting the lower rates, we’re investing in local clean energy and we’re reducing the influence of a massive for-profit monopoly that has control over our city.
John Farrell: Maybe just to drive the point home, I know I talk about this a lot in my writing and whatnot, can you just briefly talk about why it is that San Diego Gas and Electric doesn’t want to do this? So you’ve already made the point that this process or this focus on local solar would save a lot of money on this toll booth that you’re otherwise having to pay to bring electricity into the community. Why wouldn’t they want to do this if it’s a win-win?
Bill Powers: As an entity that for a Century plus has gotten its revenue and its profit from building infrastructure, the problem, the conundrum for San Diego Gas and Electric and all the investor-owned utilities is if customers start empowering themselves and taking care of themselves, even if it’s diesel generators, we’re talking about rooftop solar, but anything that reduces the dependence of the customer on the utility reduces the potential for the utility to expand and grow its revenue base through its own infrastructure. And so there have been efforts around the country, the performance base rate making, hey, is there a way now that all the customers can generate their own power? Is there a way we can adapt this model so that the investor-owned utility had some incentive to support this common sense loved by customers approach?

And I think for the investor-owned utilities and holding companies, investors just like this bird in the hand is worth 10 in the bush. I mean, this is such a gravy train that we will never see a gravy train like this again, and we will defend it to the maximum extent in the right. This is an over the top gravy train, and I would expect this will be like the dinosaurs. There won’t be a negotiation where we sit around and intelligently talk about performance-based rate making and make that shift. This will be communities getting fed up that have the fundamental right to take this service back to the community as a public community-based operation. And they just do it.

Dorrie Bruggemann: To put it in the most simple words possible, local rooftop solar customers investing in their own rooftop solar, it doesn’t make SDG&E any money. It doesn’t make the for-profit utilities money. So they don’t like it and they fight it.
John Farrell: I think that’s very clear. Let me talk about something else. A big issue, and you kind of alluded to this before, Dorrie, about some of the motivation that folks would have to care about public power. One of the big motivations we have in our clean energy transition is trying to address some of the disproportionate health and financial risks to indigenous communities, communities of color, folks who have often borne the heaviest penalty from the fossil fuel economy, having to live near gas pipelines and transfer stations and power plants. Are there members of these communities involved in the campaign? Is there some intentionality in this public power campaign thinking about how do we address the needs of those communities?
Dorrie Bruggemann: So there are some folks involved with the campaign who belong to frontline communities, and for me coming into this campaign, it definitely has been a goal of mine to continue to do more in that regard. I say we have some folks involved and we do. I’d like to have more. And signature collection for this ballot initiative, it does represent an opportunity to reach out to more communities to extend a hand and provide some of that education on what is public power and what are we trying to do and bring those people in. So that is something that we certainly have on our minds in this campaign are working towards doing more and more. And I’d really like to see here in San Diego that coalition continue to grow and to build so that we can be elevating the voices of frontline communities.
Bill Powers: As the primary author of the ballot initiative language, one tool that I have really been attracted to for years that the utilities have paid lip service to for years is on bill financing and on bill financing tied to the meter, not to the individual, which is what’s being pioneered out in Hawaii as a tool to get rooftop solar and battery storage on the homes of renters, the homes of people with poor credit, the homes of people that could really not aspire to own and operate systems like this ever is to build a tariff base so that you can legitimately say it’s equitable, that if you want it, there’s a way for you to get it in a way that works for you economically. So that’s actually something that we baked into the mission statement of the public utility.
Dorrie Bruggemann: Yeah, and one thing about also our campaign is that there has been activism in San Diego for a while on this issue. There is, as you mentioned John, and our communications with the franchise renewal and the franchise fights, there has been an ebb and flow of coalitions and groups that have come together and fought in certain key moments. I think the key here is just continuing to recognize that every time we are doing that coalition building work that we’re keeping a very keen eye for, are we representing all of the communities that are here in San Diego? And making sure that that’s always something that we’re thinking about doing more of every time we’re doing any form of organizing.
Bill Powers: Another comment on this is long before this ballot initiative launched, we were having meetings with the local credit unions about, hey, you’ve got these, we have some interesting programs for financing green upgrades in California, and the most active player are credit unions and the most active player is my credit union. And the office of my credit union is 30 feet from this window here. I mean, it’s my neighbor in this office area. And so I’ve had meetings with them saying, look, you invest almost exclusively in home loans and auto loans, but you also have this lead in this nascent program for funding green energy conversions for primarily lower and middle income folks, but it’s based on credit score, kind of a traditional credit review, but they’ve got billions and billions of dollars that they’re turning over every year collectively the credit unions in this city. And that’s the kind of economic clout that could do major conversions in neighborhoods that historically have had relatively little involvement in clean energy. And so we’ve had those discussions. They’re like, you set up the program we’re in.
John Farrell: That’s great. I’m so glad you mentioned the on-bill financing. I just interviewed Matt Flaherty from Clean Energy Works. The term of art they’re using now is inclusive utility investments, but it was noteworthy that most of the leading utilities that have done that are cooperatives and other member owned institutions and not investor-owned utilities. But I’m really excited to hear that you’re thinking about that as part of this, because in that interview he talks about just how transformational it can be to reaching some of those folks who are otherwise not covered.

We are going to take a short break. When we come back, I ask my guests how public power addresses problems that community choice energy cannot, we talk about the key moment recently when a 50 year franchise agreement was dramatically shortened, and the nature of their campaign’s opposition. You’re listening to a Local Energy Rules podcast with Bill Powers and Dorrie Bruggemann with the Power San Diego ballot initiative campaign.

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John Farrell: You mentioned a little bit the community Choice Energy as part of the history of this work, and I remember, I think I interviewed someone who was part of the community choice effort in San Diego maybe 10 years ago who may still be involved in the work that you’re doing now about the effort. Can you talk a little bit about why that isn’t enough? I think you kind of alluded to that before about this transmission toll booth and maybe that’s it, but the idea behind community choice was of course cities could choose where the electrons came from, but they wouldn’t have to buy the poles and wires, which is usually what’s involved in municipalization and frankly is one of the most contentious points of it, where the utility will do a little Austin Powers or Dr. Evil thing with their finger and say, that grid will cost you $10 billion. And then the city will litigate back and say, actually it’s only a billion dollars or half a million dollars. And then of course there’s also the whole mythology of you have to buy the grid, but it’s like, yeah, but I’m also buying the customers who are going to be shopping for me. I dunno, the whole thing bothers me the way that we have the conversation about the cost of the grid.

So now that I’ve taken a nice detour, bring me back home. Why public power instead of just community choice? What is so important about having ownership of the grid system in the context of the goals around reducing energy bills and the other things that are motivating the campaign?

Bill Powers: Touching for a moment on community choice energy or aggregation. The concept has merit fundamentally, but the power in energy politics of this state, which is what I know best rests squarely with the utilities and their holding companies and even our editorial board at the paper of record here, San Diego Union Tribune, identifies the California Public Utilities Commission as the captured regulator captured by the investor-owned utilities. And the utilities, community choice energy, they have expertly ratcheted down its range of motion so that it’s essentially now just become, and this is my personal view, that community choice energy by and large across the state, they see their role as very limited to just looking to get big remote solar and wind capacity at a couple of dollars a megawatt hour less than what the investor-owned utility would have gotten for the same project so that they can come in and say, hey, the generation side of your bill, which is small, is going to be 1 or 2% less in cost than if it were the utility. And it’s still only a small part. So fractions of 1% savings by going with community choice energy over the utility.

And a lot of people say, well, really, I mean that’s all we’re getting out of all this drama about having this entity. And I’ll put that partly on the ability of the utilities to control the game and impose conditions on those community choice aggregators that make it very hard for them to do anything but status quo type work. But it’s also I think CCA myopic understanding of what their mission is, and if you just look at it as our mission is just to provide power supply at some incrementally lower rate than the utilities are providing. Okay, well what about the fact that if you’re buying New Mexico wind power and you’re a coastal Southern California CCA, or if you’re buying solar power in Arizona, how’s it going to get here If you sign a thousand megawatts of contracts, how does it get here? Somebody’s got to build a transmission line. Right. Do you think that may play into why the utility seemed quite comfortable with your role at this point? If all you’re doing is what they would’ve done anyway to facilitate multi-billion dollar transmission expansion, you’re welcome at the table.

And so I’ve also had conversations with them saying, since I was one of the promoters of this 10 years ago, what was our concept? We were clear about it that we would concentrate on massive build out of solar in the city. It doesn’t have to be rooftop, on residences or only that, but you can aggregate 10, a hundred, 500 kw or megawatt rooftops into huge projects just as big as those desert projects. And maybe they cost a penny more collectively than the desert project. That’s okay. That’s what we want. It’s not so much you knocking a percent or two off the power supply bill. It’s about implementing a vision that takes us in a different direction and that has not happened.

Dorrie Bruggemann: Yeah. One thing that we like to say when we’re talking about the difference between community choice energy and public power, obviously as you said John, it’s the ownership part of the equation is really the significant difference there. And I empathize and relate to what you’re saying that people, they worry a lot about that price tag with getting to the point of public ownership. So one analogy that we use a lot in the campaign is community choice energy here in San Diego, we’re effectively having to pay rents on our grid. We have to pay the owner for the rights to use the poles and the wires. And we all know, especially maybe some of the younger folks here that paying rent, paying rent is real drag and it really, really brings down your pocket books. So in contrast, ownership, paying a mortgage, is it something that still costs some money? Yes. But it’s something that allows you to invest in the community to invest in what we need here in San Diego versus paying rent to really an owner who’s just here to make money off of us. So that’s what I try to say to maybe change how people are thinking about that, but it’s a work in progress.
John Farrell: One of the things I thought was interesting in looking at some of the history of the campaign in San Diego around clean energy and affordability and public power, it looked like there was sort of a key moment about two years ago when the city was voting on the renewal of its franchise agreement with the electric utility, San Diego Gas and Electric. Could you talk about, maybe give people a little preview of what does this franchise contract mean? What does it do? We have some information on our website, but I think in your own words, what does that contract mean? Can you talk about what happened with that vote and how it impacts the public power campaign? And then also I know that there was a fee attached to that and some revenue as part of that conversation. If you could delve into that once you’ve explained the basic concept there and how it might’ve interfaced with the public power effort.
Bill Powers: Sure. This is about a three hour comment. John, do you have that time? I’ll shorten it.
John Farrell: It’s okay. We will ask people at this point, please, on your podcast listening device, turn the speed up to three times. We’ll all sound like chipmunks, but we’ll get through it.
Bill Powers: So our gas and electricity provider since the 1880s has been San Diego Gas and Electric. And so basically the 11th commandment was San Diego shall have San Diego Gas and Electric as its gas and electricity provider forever. And so the city signed a 50 year franchise agreement for gas and electricity with SDG&E in 1920. They again, in 1970, signed a 50 year agreement. Though you may recall, 1970 was a tumultuous year in the United States and there was a dog fight in this city in 1970 over the renewal of that franchise agreement. And the consultant to the city said, hey, but for very high interest rates at this time, you should go public power. That was 1970. So as we approached the 2020 year, those of us in energy in politics to the city said, we got to prepare for this. I mean, we should make sure that we have some kind of off ramp to public power. This is not working.

So I was part of a nonprofit effort to do a public power study. We contacted Boulder, Colorado, got a good consultant out in North Carolina, did a good study on public power. It said it’s a winner, especially distribution grid only. Great. We shopped that around to the city council, let everybody know, and just kind of built some anticipation as this became more of a political issue in the city. The city also commissioned a public power study. The consultant in that case said, look, public power is a winner for this city. And they gave us pricing on the grid, the assets, and said, you write the franchise agreement terms you want for electric, and if the bidders do not agree to exactly what you want, you go straight to public power. Interest rates are dirt cheap. This is the time to do it.

So that’s what we got from the consultant to the city. Then we had a change in administrations and we went from an R to a D, but it actually, as you know, doesn’t necessarily change anything. All depends on who was closest to whom. And so it actually got less favorable with that change for public power. And the new administration signed a very favorable agreement to San Diego Gas and Electric. However, there was a dog fight on the city council. We kind of had the votes briefly to stall that franchise and get a good public power off ramp, which is, let’s put some rigorous but doable requirements in the franchise agreement for clean energy, local rooftop power serving the underserved. We know this utility is going to trip over it. Sooner or later, they’re going to trip over a requirement. And let’s just say you trip over any requirement, we go straight to public power. That’s what the consultant was advising.

But that didn’t happen. I mean, SDG&E got basically a free pass. In fact, that’s one of the reasons why we have some strength going now on ballot initiatives. That happened very recently. That was only two to three years ago in that span. That was a marquee issue in this city in 2021. That was a big deal. Everybody remembers. And so we have somewhat educated populace about SDG&E basically getting its cake and getting to eat it too. And so there was a lot of public dissatisfaction with how that came down.

And so that’s really where we’re at. And you can see these relationships here now that we’d actually recommended to the city that the consultant that did the work in 2020 be rehired for yet another study. The third study that we’ve had in six years is mostly complete at this point. They did bring in that consultant, consultant has a good reputation, but it’s really what you do is dependent on what your client instructs you to do. There’s no reference in the new study that we’ve ever had prior public power study. We’re not looking at a distribution electric grid anymore. Now we’re looking at T&D. But what does T&D do? It involves a lot more actors and it greatly extends the review time. And so we’re in a position as a campaign to say, because now the utility is saying, well, let’s just wait. There are multiple phases to our municipalization study. Let’s circle back in 2025, we’ll have another chat. Then next phase will be done in 2040. We’ll circle back down, and I’m exaggerating when I say next phase in 2040, but you know what I mean. This is, I think, the analysis paralysis is what I call it. Is let’s throw the community a small bone. Let’s tell ’em we’re thinking about it and let’s just keep thinking about it until the cows come home.

And so what we’re saying is we’ve got plenty of studies, and unlike many communities, we pretty much know exactly what the assets cost. We know the different governmental structures we have available to us. We’ve chosen one. And just to underscore, and you can probably sense a little frustration in my voice this second phase, that first phase, which covered everything, finished in July of 2023, this next phase finishes in mid-summer 2025. What’s the primary happenings in that next phase? It’s consultations with the community. What should have happened before the first phase even started? Consultations with the community, consultations with the community choice aggregator. But the study says, we’ll just continue to take power from the community choice aggregator.

So what’s to consult? That’s what’s in the study. That’s what we’re assuming, but what are the bulk of the consultations? The consultant in the city will go out to get insights from San Diego Gas and Electric. The city will go out and get insights from the San Diego corporate electricians union, IBEW 465. Well, we’ve seen those insights at our meetings, which are hell no to any discussion of public power. And so it just gives you a sense of, insights when you’re talking about a hostile takeover, what insights do you anticipate getting from your opponent in the ring other than a knockout punch? And so just to give you the flavor of the politics, and Dorrie and I were just talking about this before the call, is that this could not have happened any other way, meaning the institutional players in the city have directly or indirectly some kind of tie with the investor-owned utility or its holding company. That makes inconvenient any significant discussion about a wholesale change out that the only way this could have gotten started is as grassroots. We’ve had enough initiative because if they’re too embedded, they’re too embedded in the political structure of the city to have been able to negotiate some kind of momentum to then get funding. And it just had to be, you know what, this is the moment and we’re not sure how we’re going to get it done, but this is the time to move.

John Farrell: I want to reference one thing really quick in this conversation about the money to buy the grid system. Dorrie, you made, I think, a really helpful top line reference to how you can talk about this with people. It’s the difference between renting and owning. One thing that’s really struck me about this from, we did a public power podcast series. I did six episodes about public power kind of campaigns that had been done, what people were trying to get out of it, what had happened with a lot of the campaigns and how they had played out. And almost every campaign did some sort of feasibility study. Almost every feasibility said, this is a good deal. You should do it. Because of course, the major difference between private ownership and public ownership is the profit margin that the private utility is taking that they’ll no longer be taking.

And so it’s like, how can you possibly do this and not save money knowing that you’re going to cut that profit margin in half or more in terms of interest rates and cost of capital? And it really comes down to this issue I discussed with Scott Hempling, who has a long history in doing utility law and regulation has been an administrative law judge in this issue. And I think he covered it in his book, but in a podcast where we talked about it, that it’s essentially the utility is taking this public asset, the distribution grid that we’ve all paid for. So we’re renters, but it’s paid off, right? Sure. They’re doing some upgrades to it. We basically own it or we would own it if it was any kind of justice in the structure of the system. And then they’re selling it to us at a premium. That’s the only possible way that we could not get a good deal here is if they’re somehow being able to profit off holding this monopoly ownership of a system that we gave them. So it’s like we gave it to them as part of their operation and now they’re going to sell it back to us at a premium, which is the only plausible way. It couldn’t be cheaper to operate the system. I don’t know. That just drives me crazy.

So I don’t know if you have anything you want to say to that, but just I keep thinking about that every time I talk with folks like you who are working on these public power campaigns, everybody gets hung up on the economics when the truth is the utility is just making a buck off something we gave them in order to sell it back to us at a price premium. It’s ludicrous.

Bill Powers: Stay angry, John.
Dorrie Bruggemann: Yeah, I mean, they get to charge us. They get to charge us three times for the same thing. They charge us, especially in the case of SDG&E, when they charge rate payers to build these massive transmission lines from these far away solar farms in the desert. So they charge the rate payers to build the transmission line. They charge the rate payers for delivery of the energy on the transmission line. And then in the case of the delivery that’s happening within the city, the distribution, they’re also charging again if we want to own it ourselves. So they really get to charge for both the existing grid that’s been around for a long time and for new projects, they get to charge us several times over for the privilege to operate the electric grid.
Bill Powers: It’s a motivator.
John Farrell: Yeah, absolutely. This last question I have for you about who’s the opposition and what is their issue? I think we’ve probably nailed this down pretty well already, that the utility is not a fan. You also mentioned the IBEW and there is a long history of unions representing workers at utilities sometimes because they have to in their union contract and other times just because they see alignment in continuing their jobs, being in lockstep with utilities, private utilities, to oppose public power. Are there other folks that you’re finding maybe that are sort of surprising or not surprising, but big players in terms of opposition? And are there any particular ways that they’re going about it that is really complicating your work?
Bill Powers: I might start on one issue for us is, and this was much more transparently done than I would’ve anticipated, but San Diego Gas and Electric has formed a solely by them funded political action committee who has one role, which is to stop our ballot initiative. And I didn’t check, I was meant to check before this call because they keep pumping money into it. Last I checked, they put $560,000 into it. And what they’re doing is the same game plan that they have used. So in this case, they are the sole funder, the officers of the PAC are senior executives at the utility, they claim that they’re a big coalition that unions community groups, but they’re the only funder. But when you talk about surprises, there really aren’t too many surprises. And this is one of the advantages of all the reporting that the commission requires is every year they have to report their charitable contributions.

So we can just look down this voluminous list and say, well, this entity that represents lower income people of color gets $25 or $30k a year from utility, and now they’re writing about the nuances of income graduated fixed charges. And so what we focus on is just calling out that you see these op-eds from groups, one member of an earlier coalition that is earlier iteration of a coalition fighting for fixed charges was Meals on Wheels, for example. It’s like, well, how, one might ask, does Meals on Wheels have the chops to opine on how these fixed charges work? And they get quite a bit of money from the utility. And so what we’re doing is what we’ve done in past campaigns. I mean, this really should just be required that if you’re writing op-eds that at least acknowledge you can talk about your degrees and the good works that your entity does, and you probably do do good work, but also acknowledge that you’re a recipient of significant contributions from the electric utility to be fair to the reader. So the reader doesn’t assume that remarkably, you just got up one morning and felt compelled to write an op-ed about fixed charges even though it has nothing to do with your trajectory.

John Farrell: I’m really struck by that. There’s some excellent work out there by Energy and Policy Institute and the NAACP about that insidious connection between the charitable contributions that utilities make and then political support they get from what would otherwise be very unexpected quarters.
Bill Powers: Exactly. And one of the interesting things that we have learned in the course of this campaign is we have 501c3 foundations and funds that want to contribute to our ballot initiative, some of them operating through our biggest umbrella foundation in the city, but that biggest umbrella foundation in the city is the number one recipient of charitable donations from the electric utility. And so it becomes a gatekeeper in some ways for money that might otherwise flow to grassroots campaigns like this one but cannot due to that structure. And so I had mentioned earlier that it couldn’t have happened any other way and not to comment on our chances for success. I mean, this is an uphill battle, but it couldn’t have launched any other way because the utility has embedded itself so completely in our community that it had to be an outside grassroots issue.

And I must say that no matter how it shakes out, I think it’s just given the community of bigger vision of what’s possible. I mean, until this campaign launched, it was like, in fact, I got that from many people that, hey, good luck to you, but you just can’t take on the investor-owned utility. I mean, it’s just too big a fight. Like you said, your training wheels were earned in 2020, and now you’re ready for the real political combat which is trying to knock out the investor-owned utility, which is in part true because it’s remarkable to see these interlocking relationships and webs. And I must acknowledge many people in the community stepping up despite that, despite being caught to a degree in those webs and still showing the courage to support us. But I’m glad we’re doing this for our community.

In fact, can I read when we’re among the faithful, can I read you a statement we read at all of our presentations? Can you tell me who it came from?

John Farrell: Yes, please do.
Bill Powers: I believe in municipal ownership of these electric monopolies because if you do not own them, they will in time own you. They will destroy your politics, corrupt your institutions, and finally destroy your liberties, quote from a book Power Struggle. Do you know who that was?
John Farrell: Oh, I’m going to guess Franklin Roosevelt, but I’m not sure.
Bill Powers: Close. Tom Johnson, mayor of Cleveland, Ohio 1901. And Tom could have said that yesterday and it would’ve been spot on. And so we’re trying to just frame this issue. What is this about? Fundamentally, it’s about kind of an insidious form of corruption of our whole social network here, and it happens to be electric power in this case, or gas and power, but it does, it impacts our politics. It impacts the legitimacy of our nonprofit institutions, everything.
John Farrell: It’s really striking too because as a student of U.S. political science, there was a huge effort in the progressive reform era about a hundred years ago to get money and patronage out of the bureaucracy. And so that it wasn’t the case that you would win a municipal election and then you would just hire all your friends in the government. I mean, there’s sort of famous examples like the Chicago political machine or in Boston or in New York City where the whole concept of government was basically a place where I reward my friends. And it’s funny that as you talk about this, I’m sort of thinking like, well, that’s funny, but we let our electric utility do that through charitable contributions and through all these other ways of just basically buying friendships as the incumbent, which does make this effort to unseat them as you would in a political campaign, all that more difficult. What gives you hope about being able to win, knowing that you’re in an uphill fight, or what advice would you have for other folks who are trying to think about maybe undertaking a similar challenging effort?
Dorrie Bruggemann: So I have to interject here before I answer your question with a personal comment here, because now it’s been a couple of times down this conversation that you guys have referenced my 2020 experience. I seem to be creating a pattern here because the campaign that I worked on in 2020 was a statewide proposition for undoing the property tax loophole of Prop 13. So I think I’m starting to create a little pattern here of myself, of taking on massive recessive propositions and initiatives for undoing mistakes of the past from a long time ago that some seriously money backed powers are extremely interested in maintaining. So that’s just a little insight I had just now thinking about this in this conversation.
Bill Powers: Very interesting.
John Farrell: Well, let me give Dorrie the chance to answer this question first. What gives you hope then, knowing that you have taken on some very challenging things and knowing how uphill this fight is? And then we’ll give Bill the last word.
Dorrie Bruggemann: Yeah. So I would say for me, in my heart of hearts, I’m really an activist and a people power person, and I’m all about the strength of the community. And what drives me in these jobs is seeing just the power of organizing. And I think this is an issue that, especially what we were just talking about here when it comes to public power with all that we’re facing, this is where the power of organizing really comes into play. And it’s been really amazing to see what’s happening here in San Diego. I mean, it started not with this campaign, but with past efforts to organize lots of people coming together, people are angry at SDG&E and when people are told that we can actually do something, there is a solution, we don’t have to just be angry and feel helpless, people are so excited, they are so excited, and they want to get involved.

And we’re doing signature gathering with volunteers. We have paid signature gatherers in the area. People who do this for their income or for a side hustle, they want to carry our petition for free because when they have, they’re able to put forward, oh, I’ve got the Power San Diego petition. People are coming to them and they are approaching them and they want to sign. So what gives me hope is knowing that there is so much potential for massive organizing in this region. What we have seen with this campaign and how the work that we’ve done, whether we get on the ballot or not, whether it passes or not in the primaries, the way that elected hopefuls were talking about public power and really having to talk about it in a way that they would not have if we did not have this organizing over the past few years over the issue. So that’s what gives me hope is that to me, it’s inevitable. We want to make it happen as fast as we can because it needs to, because people are hurting now. But I just feel that SDG&E’s time is nigh. So it’s exciting to see, and that’s what gives me hope.

Bill Powers: I don’t know if I have a lot more to add to that other than to say that part of this for me was, it’s so easy to be disillusioned. It’s so easy to say you can’t fight the boss, or you can’t fight this monolithic thing. But that just the fact of taking the fight to them and making it a fight, making it a debate in the city that this isn’t a done deal. This isn’t forever, that if we want to make a change, we got to start somewhere. And it just makes what I’m doing seem more vital. I’m not just in yet another proceeding at the PUC trying to change the bow of the boat a half a degree. This is changing a lot more than that, and you even see it in that PAC to throw a half a million dollars or more at us because we actually wrote a very good ballot initiative. It will pass muster if the citizens vote us vote this in and it will work, and they know it, and so they’re trying to stop it.
John Farrell: Sometimes I like calling what they do the cash cannon based on how much those utilities spend on these efforts in other places. Well, Bill and Dorrie, thanks so much for joining me to talk about your work in San Diego and frankly, the inspiration of going for something that is meaningful change. I mean, I think, Bill, the way that you put it is so important. It’s not just about little incremental degrees, but trying to ask for what you actually want and what might actually accomplish something meaningful in the world. And so I’m glad that you’re providing that inspiration for others.
Bill Powers: Oh, thank you for giving us a chance to talk about it, John.
Dorrie Bruggemann: Yeah, thank you, John.
John Farrell: Thank you so much for listening to this episode of Local Energy Rules with Bill Powers and Dorrie Bruggemann with the Power San Diego ballot initiative. On the show page, look for links to the campaign website and the short video I mentioned, as well as a TV news segment covering a protest organized by the campaign against utilities high profits. Also on the show page, we’ll have links to related podcasts, including ILSR’s six-part Public Power podcast series, the interview about inclusive utility investment, and the work by NAACP and the Energy and Policy Institute showing how utilities buy political support with charitable contributions. Local Energy Rules is produced by myself and Maria McCoy with editing provided by audio engineer Drew Birschbach. Tune back into Local Energy Rules every two weeks to hear how we can take on concentrated power to transform the energy system. Until next time, keep your energy local and thanks for listening.

The Power San Diego Ballot Initiative

Residents of San Diego pay some of the highest electric rates in the country. Meanwhile, the investor-owned utility charging these rates profits over a million dollars a day from San Diego alone. The Power San Diego ballot initiative is a campaign to fire San Diego Gas and Electric, take the distribution grid public, and serve San Diego affordable electricity through a publicly-owned utility.

As Bruggemann and Powers explain, a public utility could reduce rates by supporting solar generation within the city and cutting out costly power transmission charges. San Diego Gas and Electric opposes local solar because distributed generation cuts into its revenue base and utilities do not profit off of customer-owned generation facilities. The public utility would also support on-bill financing, adds Powers, which can help customers go solar with no upfront cost.

We have to have public power because we need to have a utility that prioritizes sensible, logical solutions and doesn’t prioritize their profits and their shareholder values… switching to public power, we’re getting the lower rates, we’re investing in local clean energy, and we’re reducing the influence of a massive for-profit monopoly that has control over our city.

— Dorrie Bruggemann

Campaign staff and volunteers are in the middle of a push to gather signatures and put public power on the ballot.

Why Community Choice Energy Wasn’t Enough

California is one of the nine states that allow community choice energy. Through community choice, local governments can aggregate together and form a community choice entity. The entity then assumes responsibility for electricity procurement, while the incumbent utility still owns the distribution system and bills customers on behalf of the entity.

Powers was once an advocate for community choice energy, but feels the concept has become too limited. While community choice entities are getting power at slightly lower rates than for-profit utilities, they are often procuring distant generation and driving transmission expansions. It’s also a matter of renting the grid versus owning it, explains Bruggemann.

Ownership, paying a mortgage, is it something that still costs some money? Yes. But it’s something that allows you to invest in the community, to invest in what we need here in San Diego, versus paying rent to an owner who’s just here to make money off of us.

— Dorrie Bruggemann

As Support Grows, So Does Utility Opposition

Although the city already has two recent municipalization feasibility studies, another one is underway — Powers describes this effort as “analysis paralysis” that is delaying what must necessarily be a “hostile takeover.” The utility’s ties to local electeds and community leaders increases the challenge of a municipalization campaign. San Diego Gas and Electric has also poured half a million dollars into a political action committee to stop the ballot initiative.

No matter how it shakes out, I think it’s just given the community a bigger vision of what’s possible… it’s remarkable to see these interlocking relationships and webs. And I must acknowledge many people in the community stepping up despite that, despite being caught to a degree in those webs, and still showing the courage to support us.

— Bill Powers

Episode Notes

See these resources for more behind the story:

For concrete examples of how towns and cities can take action toward gaining more control over their clean energy future, explore ILSR’s Community Power Toolkit.

Explore local and state policies and programs that help advance clean energy goals across the country using ILSR’s interactive Community Power Map.

This is the 206th episode of Local Energy Rules, an ILSR podcast with Energy Democracy Director John Farrell, which shares stories of communities taking on concentrated power to transform the energy system.

Local Energy Rules is Produced by ILSR’s John Farrell and Maria McCoy. Audio engineering by Drew Birschbach.

This article originally posted at ilsr.org. For timely updates, follow John Farrell on Twitter, our energy work on Facebook, or sign up to get the Energy Democracy weekly update

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Maria McCoy

Maria McCoy is a Researcher with the Energy Democracy Initiative. In this role, she contributes to blog posts, podcasts, video content, and interactive features.