The region’s largest energy provider has been lobbying elected officials for months concerning an increasingly popular electricity program that would give residents and businesses an alternative to San Diego Gas & Electric — even though the company and its critics disagree on whether it has state approval to do so.
Officials with Sempra Energy said Thursday that they have been legally meeting with lawmakers to discuss community choice aggregation, or CCA, a state-sanctioned program that transfers the authority to buy and sell power from a utility to elected officials or their appointees for a particular jurisdiction — say a city, county or groupings of both. During a public meeting Wednesday, for example, they voiced concerns to the Board of Supervisors about a proposal to study whether the county should adopt a CCA program.
In California, a growing number of local governments have embraced or are exploring CCA as a way to limit use of fossil fuels in favor of renewable energy in the fight against climate change. These programs have routinely delivered more green power at prices equal to or lower than what utilities charge.
After a bitter fight between Marin County and Pacific Gas & Electric over establishing the state’s first CCA, the Legislature in 2011 barred utilities from using ratepayer dollars to lobby on such programs.
State law does allow investor-owned utilities to set up shareholder-funded marketing divisions for this purpose, and last year, SDG&E and its parent company, Sempra Energy, became the first in the state to officially pursue creation of such an entity. They named their new division Sempra Services Corp.
The marketing arm cleared a key hurdle in August, but is still seeking final approval from the California Public Utilities Commission. State regulators have rejected multiple blueprints drafted by SDG&E for how the marketing division would remain independent from the utility. The CPUC is considering a third revision to the company’s so-called compliance plan.
On Thursday, officials with the commission said Sempra Services has not received final clearance to lobby on CCA. They stopped short of making a judgment on whether the division’s activities in recent months have run afoul of state rules.
“The CPUC’s approved resolution (in August) on the creation of the marketing arm requires SDG&E to provide certain information to the CPUC for approval before marketing begins,” said Terrie Prosper, spokeswoman for the commission. “That approval is pending.”
She added: “We would need to look into the facts of the situation, but if Sempra is participating in activities that should only be covered by the marketing agent, they would be in violation of CPUC rules.”
Frank Urtasun, a top official with the marketing division, said Sempra Services has been lobbying elected officials on CCA since September, citing the commission’s resolution.
“We’ve not received any type of notification from the (CPUC) that overturns the decision that they made on August 18,” he said Wednesday after speaking at a public meeting where a majority of the San Diego County Board of Supervisors blocked a proposal to study CCA. “That’s why we’re here.”
Supervisors Kristin Gaspar, Greg Cox and Bill Horn — who opposed efforts by Supervisor Dianne Jacob to move forward with a feasibility analysis of CCA — on Thursday referred questions to the CPUC or declined to comment on whether they had met with Sempra officials to discuss the alternative electricity program.
San Diego Mayor Kevin Faulconer and several of the city’s council members said Thursday that they’ve had conversations with Sempra about CCA. The city is considering CCA as part of its broad plan to reduce greenhouse-gas emissions.
The fact that Urtasun, as well as an independent contractor for Sempra, Lani Lutar, spoke publicly about CCA this week set off a firestorm among supporters of such programs.
“We’re very concerned that they are basically defying the state,” said Nicole Capretz, executive director of Climate Action Campaign, which has advocated strongly for CCAs throughout the county. “I don’t know what’s going on. As of today, they don’t have authority to operate.”
A statewide coalition of existing CCAs, known as the California Community Choice Association, filed a challenge Thursday to SDG&E’s most recent compliance plan. It raised concerns that Sempra Services may be engaging in lobbying activities without the commission’s green light.
“We asked the commission to order them to cease all lobbying and marketing activities until they have a compliance plan that’s actually approved,” said Barbara Hale, one of the group’s top officials and the president of San Francisco’s CCA, CleanPowerSF.
“SDG&E is supposed to be showing the regulators how they have their accounting rules and they’ve trained their employees and all the systems are in place to make sure that Frank knows that when he’s testifying at that county board, he cannot charge his time to ratepayers,” she added. “None of that is in place.”
In response to questions about the legality of the lobbying in recent months, SDG&E spokeswoman Amber Albrecht said: “SDG&E has filed a compliance plan with the commission to demonstrate how it complies with the law. That plan is in effect. A few discrete issues under the plan are continuing to be evaluated by the commission.”
The commission hasn’t disclosed what fines or repercussions Sempra and SDG&E could face if they are found to be in violation of the state rules.
Sempra Unleashes Controversy with Lobbying on Rival Electricity Program, by Joshua Emerson Smith, San Diego Union-Tribune, February 17, 2017.