After receiving a heavy dose of commentary from San Diego–area residents and conducting a spirited debate, the city council on Tuesday afternoon, March 17, passed a revised version of a resolution seeking change to a new proposed San Diego Gas & Electric rate structure that initial supporter David Alvarez lamented had turned into "clearly another giveaway to SDG&E."
At issue is a proposed rate change that would add an immediate $5 base charge (eventually doubling to $10) to the bill of each residential customer, with "baseline" rates for lower-tier users rising by 8 percent and higher tiers for households that consume more electricity falling by 30 percent. The rate change has already been submitted to the California Public Utilities Commission, and a decision on the rate hike/cut is pending.
For their part, SDG&E argues that rates for the lowest consumers of energy have effectively been frozen since the statewide energy crisis of 2001, subsidized by increased rates charged to households with higher energy demands. The utility also argued that it was too late in the rate proposal procedure, "in the bottom of the ninth with two outs remaining," to request changes. A representative from the city attorney's office, however, said SDG&E's refusal to consider amending their plan was due to an unwillingness, rather than an inability, to do so.
Roughly 30 comments apiece were heard from residents and other locals both in favor of and opposed to the resolution, which originally asked SDG&E to amend its rate proposal.
Many of those speaking against the measure argued that their residence's location farther inland caused their energy use to naturally rise, due to greater reliance on heating and cooling as compared to coastal residents. Some said that large family sizes contributed to their passing the lower-cost rate tiers, arguing families of seven or eight still used less energy than two or three separate households of the same population.
"The rate system is now hurting the people it was designed to protect," said Carlette Lewis, representing the Fix My Energy Bill Coalition, also chaired by former mayor and chamber of commerce head Jerry Sanders and former city councilman Jim Madaffer. "People who can't afford solar or energy efficiency upgrades have to pay way more than they should for electricity, including those who have to depend on medical devices and air conditioning."
Proponents of the resolution, speaking later, countered that inland households already receive an increased energy use allowance under the existing rate structure, and that the council recently favored tiered water rates in a move to encourage conservation, an effect similar to the escalating cost of electricity under the current structure.
Solar-industry representatives also weighed in on behalf of their own interests, noting that reduced rates for high energy consumers puts a dent in the solar market and moves the city away from its climate action plan goal that calls for 100 percent renewable energy generation in the city by 2035.
"We feel SDG&E's proposed rate structure is in direct conflict with our ambitious climate goals," said Kath Rogers with Climate Action Campaign. "We want to incentivize people putting solar on rooftops – we need to see them as assets. We want business owners to be able to make money off their roofs."
During council discussion, District 6’s Chris Cate suggested an amendment that, rather than requesting SDG&E amend its proposal, the council instead send a letter to the California Public Utilities Commission requesting they adopt a rate structure that preserves language supporting "Care Program" discounts to lower-income households, subsidized energy efficiency upgrades for those customers, and continued education and promotion of conservation efforts. His amendment was countered by Marti Emerald, who suggested a compromise including both the commission and SDG&E in the final resolution.
"For me, it comes down to the fact that the proposed change negatively impacts SDG&E customers who are most effective in conserving electricity, and it's rewarding those who do not conserve," argued Alvarez in support of his initial suggestion including SDG&E as a subject of the resolution, noting that while approximately 300,000 households would see lower monthly bills as a result of the proposed changes, 1 million or more would instead see their bills rise. "Incentivizing conservation is crucial to the success of our climate action plan and the goal of 100 percent renewable energy by 2035."
Todd Gloria noted that the city's own annual energy bills had risen $12 million under the existing structure in the past year, according to a report delivered to the council earlier in the year.
"While I'd rather use that money for other things, we can find a way to pay for it; I’m not sure how my constituents can afford an additional rate increase," Gloria said.
After Emerald's motion to request inclusion of both a request for SDG&E to revisit its proposal and for the commission to consider the additional conservation and cost-cutting measures failed 6-3 with Gloria and Alvarez in support, the proposal by Cate to relieve SDG&E of involvement by directing comments only to the commission passed 7-2, with both Alvarez and Gloria delivering brief opposition speeches before being voted down.