SDG&E and Climate Change

In an irony of ironies, we all live in a town with extremely expensive electricity. It is among the most expensive in the country. It used not to be this way. That way back machine shows a time when San Diego Gas and Electric was a public run utility. As a public run utility it did not have an obligation to stock holders. So the profit margin was not the chief concern of the Utility.

Then came the mean 90s when many public utilities in California were put into the private sector. These were natural monopolies to begin with, with full control of a slice of the market. SDG&E was not an exception. The privatization led to two things. The first was the raising of fees. This continues to this day.

The San Diego Reader revealed just how high our rates are recently:

SDG&E’s extraordinarily high rates contribute greatly to the profit and stock performance of its parent, Sempra Energy. San Diego Gas’s profits make up more than half of Sempra’s. In the annual report for 2012, Sempra chief executive Debra L. Reed boasts, “We were the top-performing stock in our sector and generated a total shareholder return [stock-price increase plus dividends] of 34 percent, compared with 1 percent for the [Standard & Poor’s] Utilities Index.… Over the past decade, our total return has been 305 percent, nearly double the total return of the [Standard & Poor’s] Utilities Index” and triple the return of the general market.

Nonetheless, SDG&E regularly goes to the California Public Utilities Commission and pleads poverty. And gets away with it. For example, in late March, a commission administrative law judge decided, after extensive hearings, to increase rates; if the full commission agrees, an all-electric SDG&E customer using 500 kilowatt-hours per month will see rates rise 7.7 percent, or $6.55 monthly.

But there is another trick the utility has achieved. It lives, by one motto, divide and conquer. While customers are not happy, and this is county wide, coastal residents do not want more peaker plants on their own areas due to pollution and rural residents do not want more anything, that goes through their particular area. I mean, Julian was very happy that the Southern Link of the Powerlink did not go through Julian. It is fine that it went through the Southern Part of the County.

There is a natural answer to some of the problems we have. That is rooftop solar. This is not going to happen as long as Sempra Energy and SDG&E can throw money (to the tune of millions of dollars) at the problem. The problem by the way, is pesky citizen organizing. Whether it is the citizens of Boulevard saying no to a solar plant, or the fine folks at 350.0rg. The worst case nightmare scenario is that these people will actually start talking to each other. Granted, on the surface their goals seem to be opposing each other, but a little education will go a long way.

They will also keep digging in the wedges between poor areas of the county (in both rural and urban areas), and the wealthier areas. The nightmare scenario would be that every citizen in the county demands from the political class that they mandate lets say rooftop solar on every roof, and vote accordingly. Their worst case scenario is that this same political class (there are inklings of this) starts to realize the peasants are restless and decide to form local publicly own energy collectives, that will put that monopoly at risk. Here is one example from the state of New York. This utility has changed the local landscape. Imagine cities, and the County of San Diego, getting together to form one like this? That would be a direct challenge to the natural monopoly that the utility has. It would also, in the mind of this writer, be a return to the public sphere.

As long as these companies depend on the stock holders, and feed on the public through, very little will change. Yes, climate change is very real, and yes, we do need green energy. But we are going about it the wrong way. We need to start not with giant energy projects, especially in the South West, but with rooftop solar and parking structures. In this sense we need to follow the Department of Defense that is already doing exactly this on every base in this town. But as long as there is a buck to be made, none of these companies will change a thing. So ironically, rate payers on the coast, and the inland areas, as well as rate payers in wealthy and poor areas need to put the pre conceptions to the side, and work together. Perhaps even a rate payer revolt should be considered. But even before that, we need to start thinking big and form energy collectives.

No, the government, for the most part will not lead the way. So we need to.



Categories: analysis, business, editorial, Energy Policy, Environment, Social Justice

3 replies

  1. I’m happy with our rooftop solar. Everybody should do it.

  2. Not only do I agree, all new structures in the County (and cities) should have it, by law. Of course they should lead by example. Every building that either the County, or the cities own, should have it.

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