By Tyson Siegele / SanDiego350
SDG&E and its parent company Sempra have been misleading customers about their stance on Community Choice Energy (CCE).
Sempra promotes itself as an upstanding community participant with only the best intentions for its customers, but in conjunction with SDG&E, it charges exorbitant rates and fights tooth and nail behind the scenes to maintain its monopoly. It does so at the expense of electricity consumers.
By reviewing Sempra marketing material and comparing Sempra’s statements to its actions, a clear pattern of misdirection and exploitation emerges.
In January 2017, KBPS reported on the SDG&E illegal lobbying scandal. In the article, KBPS highlighted a flier in which SDG&E’s parent company, Sempra Energy, claimed it endorsed a “cleaner energy future.” The flier describes SDG&E aspirations using broad generalizations and cherry-picked facts.
To set the record straight, here is a review of Sempra’s statements versus Sempra’s actions:
“Ultimately, we must begin developing collaborative solutions that support our overall shared goals: reduce emissions, minimize costs and empower choice…”
~ Sempra flier
Sempra claims interest in three laudable goals: empowering choice, reducing emissions, and minimizing costs.
Words are cheap.
Sempra’s actions reveal different priorities. The following information shows how poorly SDG&E’s track record aligns with Sempra’s rhetoric.
Sempra claims it prioritizes low costs. Its actions suggest two possibilities: either Sempra has failed, or cost minimization is just a talking point. According to the U.S. Energy Information Administration, California electricity costs 46% more than the national average.
However, since electricity pricing across the state is not uniform, that is not the end of the story. In 2014 the Southern California Public Power Authority reviewed electricity prices in California and found widely varying rates. Their survey revealed that SDG&E customers have the highest electricity rates in the state. In fact, SDG&E customers pay twice as much for electricity as customers of Sacramento’s municipal utility.
People unfamiliar with the cost savings delivered by municipal utilities often assume government-run electricity programs would be inefficient. The actual rates achieved by municipal utilities tell a different story. Municipal utilities as well as government-run Community Choice Energy programs deliver better rates throughout California than investor owned utilities do.
Unfortunately for San Diegans, in a state with expensive electricity, SDG&E charges more than any other utility.
Empowering choice is likely the exact opposite of what Sempra is trying to do. Sempra didn’t form its lobbying arm because it wanted to, as implied by the flier, or as it states, “to engage in a realistic conversation.”
Sempra formed its lobbying arm specifically to lobby against choice.
Prior to 2011, utilities had used ratepayer money to undermine the formation of Community Choice Energy programs in hopes of maintaining a monopoly over electrical power. In an attempt to force utilities to stop using customers’ money to lobby against consumer choice, California state lawmakers created SB-790. Thus, when Sempra Energy decided to fight Community Choice Energy, it was required by law to create a new lobbying division for that purpose.
As per SB-790:
“The code of conduct, associated rules, and enforcement procedures, shall…(1) Ensure that an electrical corporation does not market against a community choice aggregation program [another name for community choice energy], except through an independent marketing division that is funded exclusively by the electrical corporation’s shareholders and that is functionally and physically separate from the electrical corporation’s ratepayer-funded divisions.”
For further and unequivocal evidence, Sempra plainly states in their November 2015 Advice Letter (PDF page 3, paragraphs 3 and 4) to the California Public Utilities Commission that it plans to lobby against Community Choice Energy.
SDG&E is the only utility in the state to take this extreme action to stifle competition. Sempra’s actions show it has no intention of empowering choice.
To understand how well SDG&E has addressed emissions one needs to have a general understanding of the big picture. The state of California adopted a Renewable Portfolio Standard (RPS) stating that utilities need to provide at least 33 percent renewable energy by the year 2020. As of 2017, SDG&E has already surpassed that number achieving 40 percent renewable energy content in their electricity generation mix.
Without looking further, it would appear that SDG&E should get high marks for reducing emissions. However, nothing happens in a vacuum. Forty percent renewable electricity generation is only impressive if SDG&E’s renewable percentage is above its peers or equal to its peers at a lower cost.
California utilities and Community Choice Energy programs make up SDG&E’s peers. It has already been noted that SDG&E is the highest cost electricity provider in the state, so the only way for SDG&E to redeem itself would be to show customers that it has achieved a significantly higher renewable energy content in exchange for the premium prices it levies upon them.
Perhaps the best way to assess SDG&E’s success or failure would be to compare it to CCE programs throughout the state. Not only are these CCE programs pricing electricity lower than the incumbent utilities making CCEs the most logical comparison, a CCE is exactly the kind of program that SDG&E is determined to block in its own service area.
The graph below lists the six active CCE programs in PG&E territory compared to SDG&E pricing. Zero represents the baseline and is set equal PG&E’s standard rate. The green bars represent various CCE programs’ 100% renewable offerings. The grey bar represents SDG&E’s standard offering.
The graph reveals that every CCE 100 percent renewable offering costs less than SDG&E’s standard rate. Keep in mind, SDG&E’s standard rate includes only 40 percent renewable energy.
Sempra’s flier claims that SDG&E is a leader in renewable energy by comparing it to the standard offerings from other California utilities. It conveniently ignores the fact that Community Choice programs offer 100 percent renewable energy for less than SDG&E’s standard rates. The claims made in Sempra’s flier would be like the San Diego Padres bragging that they are beating their least successful competitors while desperately trying to avoid comparisons with any successful Major League teams.
Sempra announces its goals in its flier and its duplicity in its actions. Instead of empowering choice, Sempra formed a lobbying entity to stifle it. Instead of minimizing costs, it charges the highest electricity rates in the state. Instead of reducing emissions, it opts for misdirection by trumpeting favorable comparisons and omitting reasonable ones.
The first paragraph of the flier states, “Our goal is to provide a balanced and fact-based perspective regarding California’s changing energy landscape.” Perhaps Sempra started with facts, but they certainly got lost somewhere along the way.
Call to Action
If you would like affordable electricity, an alternative to SDG&E, and more local clean energy, it is time to let your city council know that you want Community Choice Energy. City councilmembers make the decision whether or not to adopt CCE programs.
The City of San Diego is aiming for an end of the year vote on CCE and it would benefit from your input. If you live in the City of San Diego, I urge you to contact your councilmember and ask them to support CCE. You can find the name of your representative here. Make sure to address and send your email to both Mayor Faulconer and your city councilmember so that each of them know where you stand.
City of San Diego Contact Information:
Kevin Faulconer, Mayor email@example.com
Myrtle Cole, Council President firstname.lastname@example.org
Mark Kersey, Council President Pro Tem email@example.com
Barbara Bry, Councilmember firstname.lastname@example.org
Lorie Zapf, Councilmember email@example.com
Christopher Ward, Councilmember firstname.lastname@example.org
Chris Cate, Councilmember email@example.com
Scott Sherman, Councilmember firstname.lastname@example.org
David Alvarez, Councilmember email@example.com
Georgette Gomez, Councilmember firstname.lastname@example.org
Tyson Siegele, a SanDiego350 member, is an architect who works to promote sustainable design and clean energy. Recently he created ButItJustMightWork.com, a residential clean energy handbook, to chronicle things to do as well as things to avoid on one’s path to zero emissions.
Mark Hughes says
Excellently written, well researched article. SDG&E/Sempra’s balance and fact-based perspective is from their point of view – and their point of view is loyalty to the corporation. There’s nothing wrong with that, as they should support the company they work for, the shareholders they serve. But we shouldn’t fall into the trap of serving their narrow purpose, when ours is entirely different.
Karl Aldinger says
This is awesome, Tyson. One point of clarity, please, if you’re reading this: Re: figure 3, how does SDG&E Standard rate represent the zero mark (thus the greens for 100% renewable are a small percentage above it) and then also the 25% mark (standard offering) at the end of the graph. I’m not clear about the difference between standard rate and standard offering on this graph. Thanks.
Karl, I think the zero mark is PG&E, not SDG&E.
Tyson Siegele says
Thank you for the kind words.
In figure 3, zero is set to PG&E’s standard rate. I used “standard rate” and “standard offering” interchangeably to refer to the least expensive offering from the IOUs available to typical residential customers.
Jon Conway says
In addition, although SDG&E has the highest percentage of renewables in their power mix out of three big CA IOUs they have the highest carbon emission factors in the state (>650 lbs CO2e/MWh vs. SCE’s 500 or PG&E’s 430) due to their heavy reliance on natural gas. So even though they have a few percent more renewables than PG&E or SCE, SDG&E has the highest GHG emissions by a wide margin. Sempra is a major supplier of natural gas, so naturally they prioritize gas as a fuel source over other low-carbon fuel sources.
Lori Saldana says
Here’s how SDGE/Sempra disrupts this process: This week I attended a meeting of the Clairemont Community Planning Group (CCPG) near my home, to listen to a presentation about Community Choice Energy (CCE) by a young woman from the Climate Action Campaign.
She had arranged with the Community Group ahead of time to have an action item on the agenda, to request that the board submit a letter of support for CCE to the City Council. However, SDG&E sent a paid a consultant- Herman Collins- to attend the meeting and seek to delay action.
Before the meeting began he asked for the action to be continued. When the Chair refused to pull it from the agenda, he waited until the presentation concluded, then told the attendees “SDG&E doesn’t have a formal position on this matter” but asked the Board to delay action until SDG&E had a chance to make their own presentation.
I spoke and commented on this tactic. I pointed out that everyone in that room was paying for this consultant to waste our time, and that San Diegans already pay the highest utility rates in California. Also, it was clear that SDG&E does have a position on this matter: OPPOSE.
Finally, I noted that if SDGE/Sempra had wanted us to hear their side of CCE, they had every opportunity to arrange to do so BEFORE tonight’s meeting. Why not have their paid consultant make their points?
This is a pattern: Climate Action sends people to Community meetings, and SDG&E sends paid lobbyists to tell them they really need to hear BOTH sides before taking action- then doesn’t provide their side.
Fine, SDG&E: if this is such an important discussion, please arrange to send someone to the meetings to present your side during the presentation, and stop blocking the action.
Daniel Smiechowski says
Miss Saldana, It would have been decent of you to mention my Motion on CCPG as you certainly understood I knew what was going on and swam against the tide. How the hell can I get elected when folks like you don’t give an ounce of credit to a 50 year resident of Claremont and better qualified for SD Council than all the other candidates combined? I give up!!!
patricia borchmann says
It seems like this article is a gamechanger, or it should be !!
Compliments to author for this important contribution to green energy literacy, and actual facts. I learned alot, and am impressed.
David Gangsei says
An excellent article. Tyson. And thanks for highlighting the role of the City Council in approving the CCE option. Our citizen advocacy to our council members and the mayor is of highest importance now.
John Stump, City Heights says
Excellent article and fine presentation. Every time you turn a rock over you find that San Diego is so unaffordable because they rich are bleeding the poor in some scheme. The SDG&E monopoly is the only game in town and they will make you pay
Laurel Kaskurs says
I am all for putting an end to the rape of the ratepayer. However, one of the main issues is that cities are being told that they have to fork over several tens of thousands for a study to determine if Community Choice Energy is the right way to go. It is the right way to go and I am certain that convincing at least half of my City Councilmembers would not be any problem at all. It’s the expensive study that causes some people to question this. Can anyone who understands how city politics works please explain this to me so that I can present this in an informed way? Thank you.
Roger Davenport says
I understand that the cost of the study in other areas has been repaid by income from the CCE provider once it is set up and operating. So, the net cost to the cities can be zero (not taking into account the savings from lower rates available once CCE is implemented).
Ry Rivard did a great informative article over at VOSD about how SDG&E/Sempra is putting a big monetary crimp in the whole idea of CCA.