The following is a proposal to amend the City of San Diego Electric Franchise ordinance, adding one percent to the annual franchise fee paid by San Diego Gas & Electric Company to the City of San Diego for each SDG&E executive who has been a state power regulator at California's Public Utilities Commission in the previous ten years before being hired by SDG&E [proposed section 4(g)].

The purpose of the grantee fee increase on violation is to allow the City of San Diego to provide for an ethical separation between CPUC hearing officers and the local power utility under franchise that is regulated by those state regulators. During any related but still undecided legal action, an individual increase has no effect until the action has seen final judgment, and then if decided against SDG&E, the fee increase is cumulative from the time of violation.

Authority for a vote of San Diego citizens to alter the Electric Franchise ordinance is found in section 17 of that 1970 ordinance, where the defeat of Proposition 16 in the 2010 primary election left that existing franchise ordinance voter right intact.

A significant rationale for this proposal is the inability of the City Council to address the ethical considerations of unregulated SDG&E hiring of those who once made regulatory decisions over that public utility. It appears to be outside the scope of the Electric Franchise to regulate the hiring practices of SDG&E's holding company Sempra Energy. Previously, Sempra Energy did hire the local retiring chief FBI agent as its corporate head of security, while SDG&E was under indictment in a federal criminal matter investigated by local FBI and other federal agents that resulted in a jury's guilty verdicts in 2007.

Proposed City of San Diego Initiative Text for Electric Franchise Executive Hiring and Retention


Ordinance 10466 of December 17, 1970 [Electric Franchise], as amended on January 28, 2002 by Ordinance 19030, is hereby amended by deleting any existing Section 4(g) and by inserting Section 4(g) to provide as follows:

Section 4(g). Electric Franchise Grantee shall not hire nor retain any executive who has been a commissioner, administrative law judge, or other hearing officer of the California Public Utilities Commission in the previous ten years. Each individual violation of this section shall cause the annual franchise fee to be increased by one percent of gross receipts at the time payment is made to City of San Diego. An increase subsequent to a specific individual violation shall not take effect during a related action without final judgment by the attorney for the Commission pursuant to the California Public Utilities Code, nor during any related action without final judgment by the Attorney General or District Attorney, but shall be accessed cumulatively from the time of violation on final judgment against Grantee.


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