Sempra Services Video Leaves out Key Facts on Community Choice

The San Diego City Council faces a crucial vote in January on whether to move forward with community choice aggregation, or CCA. This kind of program allows local governments, rather than private utility companies, to decide where their residents’ electricity comes from. San Diego sees it as one way to reach its goal of 100 percent renewable energy by 2035.

The council’s Environment Committee is scheduled on Friday to hear the results of a community choice feasibility study commissioned by the city.

San Diego Gas & Electric has sought a statewide halt on all new community choice programs. Locally, it is barred from using ratepayer dollars to lobby against community choice. But its parent company, Sempra Energy, did form a separate company, not funded by ratepayers, called Sempra Services earlier this year.

Sempra Services is allowed to lobby on community choice. However, the company was under investigation by state regulators earlier this year for lobbying before they got explicit permission.

In its mission statement, Sempra Services says its goal is “to provide a balanced and factual perspective regarding California’s changing energy landscape.”

The company created a website and produced a video on community choice. While the video does not contain blatantly false information, it does leave out some important facts. Below are three quotes from the video, followed by an explanation of their context.

“Many CCAs simply swap contracts with existing out-of-state renewable facilities that are already running and already reducing emissions. This means that we pay a premium for clean energy, but fail to achieve real and additional emissions reductions.”

This describes what are commonly referred to as “unbundled RECs.” REC stands for renewable energy certificate — essentially a piece of paper proving you have paid for a certain amount of renewable energy. Unbundled RECs are bought, sold and traded on the open market, sometimes across state lines.

Some CCAs do pay for renewable energy generated outside California. But so do utilities, including SDG&E.

According to the Energy Policy Initiatives Center, SDG&E got between 4 and 8 percent of its renewable energy from unbundled RECs between 2010 and 2014. The utility itself said that in 2015 and 2016, unbundled RECs made up less than 1 percent of its renewable portfolio.

The California Community Choice Association says CCAs across the state get an average of 1 percent of their renewable portfolio from unbundled RECs — about the same as SDG&E.

A screenshot from a video produced by Sempra Services shows the text: “Not trading schemes that give only the appearance of clean energy.”

“To be effective, CCAs need to create new clean energy sources by investing in renewable energy products that create jobs and achieve real additional emissions reductions, and bring environmental benefits to our region. Not trading schemes that give only the appearance of clean energy.”

SDG&E makes use of these “trading schemes” about as much as CCAs do. But there is another point about unbundled RECs that is critical to San Diego: The city does not plan on using them.

San Diego’s community choice feasibility study assumed the city would not use any out-of-state energy credits toward its renewable goals.

As for investing in renewable energy products, CCAs are already doing that. MCE Clean Energy, the state’s oldest community choice program, has 19 megawatts of local renewable energy projects in the works or already operating.

A community choice program in San Diego could theoretically do the same — both within city limits and across Southern California. The feasibility study also discusses ways the city could incentivize more rooftop solar panels and electric vehicles. It estimates the local community choice program could result in hundreds of jobs and millions in economic output — in part because of extra pocket money residents might have if they are paying lower electricity rates than what SDG&E charges.

A screenshot of a video produced by Sempra Services shows people boarding a trolley with the text: “We need to address the issue of emissions not just energy.”

“The vast majority of local emissions come from cars and other forms of transportation. Cities must focus on the whole problem, not just electricity.”

About 55 percent of San Diego’s greenhouse gas emissions came from transportation in 2010, according to city estimates. And the city’s Climate Action Plan does take a comprehensive look at emissions reductions beyond electricity.

By the target years of 2020 and 2030, the Climate Action Plan actually aims to reduce more emissions from transportation than from electricity. Only by 2035, when the city is expected to run on 100 percent renewable energy, does electricity account for the greatest share of local emissions reductions.

There is, however, a problem with San Diego’s plans for cleaner transportation: The goals are extremely ambitious, and the city is not sure how it will meet them.

Hundreds of thousands of San Diegans will have to switch from driving cars to biking, walking and riding public transit. The city will likely have to build much better bike lanes — something it has shied away from because those facilities sometimes require eliminating on-street parking.

San Diego will also likely need more bus and trolley services, and denser housing and employment development near mass transit hubs. Both those things can be expensive and controversial.

The community choice feasibility study attempts to quantify the financial risks the program could pose. Almost all scenarios found a community choice program would be solvent by 2026. The worst-case scenario found a cumulative $2.77 billion risk spread out over the study period of 2020 to 2035.

What the study makes no attempt to quantify are the risks of the city not reaching 100 percent renewable energy. The greenhouse gas reductions in the city’s Climate Action Plan are legally enforceable. That means if the city fails to achieve them, it could be forced by a court to spend big money on efforts to make up for its shortcomings.

Sempra Services Video Leaves out Key Facts on Community Choice, by Andrew Bowen, KPBS, September 28, 2017.

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